Could you present EEPCO and talk about its history?
The company was established 45 years ago as the Electric Authority and it was in charge of power supply in integrated utility sales with full authority in electric power. It passed through different stages of development but in 1997, with the change in the Ethiopian economic and political policy, it was established as the Electric Power Corporation. The idea of passing from an Authority to a Corporation is in line with the change of the economic policy, the power sector policy development of the energy policy. The Ethiopian economy is highly dependent on agriculture first and then on the industrial and commercial sectors. Following the changes in the economic policy of Ethiopia, there is an economic reform which focuses on reforming the power sector in general from complete public ownership. It gives a way to introduce private capital in order to enhance the development of the country and to support public expenditure by involving private financing to bring additional capital, efficiency and competition. In this respect generally, the economic development program has a major focus on the infrastructure development, in particular road, information communication technology, aviation, air transport and power are major focused areas of the infrastructure sector. Our Corporation is under the Ministry of Infrastructure, which holds these infrastructure components including railway and which is in charge as well of the regulatory aspect. So concerning the reform of the economic sector in general, the energy policy is also designed in such a way as to ensure a reliable supply of energy at the right time and at affordable prices, enhancing and expanding development in the utilization of hydro-power and measures in power sub sector to build national capacity in engineering, construction, occupation, maintenance, as well manufacturing, and to gradually build up the local manufacturing capability in the power sector appliance as well. So the power sector reform as part of this energy sector reform policy was focused only on an hydro-power development scheme because the country has very huge hydro-power potential more than 30,000 megawatts, so it allows for renewable energy development, geothermal development and coal based power development scheme. This is one major change in the sector reform and the other major step is to separate regulation and operation. Now there are key players, the operators we are and the consumers. The regulator is in charge of price regulation, licensing and standard sitting and it allows the limit of private investment for local and foreign investment. So the power corporation program planning is also designed in the best way to adopt this reform. The present status of the Power Corporation regarding generation, transmission, distribution sales capability compared with the economic development impact on the demand growth in the industrial commercial sector and the agricultural sector is very really limited in capacity : the per capita energy consumption is about 21-24 kw/hour which is by far below any standard. So the program is designed in such a way to meet this growth requirement to increase the per capita energy need starting from about 660 megawatts and about 7000 km high voltage network and about 10, 000 km distribution high voltage lines as well about 9,000 km low voltage lines with 8,000 transformers is the one supplying in the system now. Taking care of all these issues, like macro economic issues, social, environmental and democratic factors, the power sector for the first time has developped its power sector master plan. This master plan is a 25 year master plan, it is classified into short, medium and long term power sector development plan. As part of this power sector master plan, we have a 5 year investment program which is a committed program, it is covered roughly between 2001-2005, it is classified to 5 sub programs, power generation, transmission, distribution, electrification of rural areas which is one major shift in the sector then institutional which is capacity development aspects. So from this point of view, there are some targets set to meet within the 5 year program that includes doubling the present capacity and increasing the transmission density from 20 km per 1000 km by about more than 50% in the 5 year period, including the number of electrified towns to about 800 from the present figure 530 and the number of customers proportionally 900,000 even above. We are also looking at improving the customer service quality like reducing the billing time from 65 to 30 days, the performance indicators, customer service quality indicators, average length of waiting time for new comers to the network to about 30 days and reducing the loss significantly to 15% and increasing the percentage of population accessed to electricity to 20%. So this is enormous compared with 3% GDP growth per annum in the 70 million population now, this is a big commitment.

Could you explain what you plan to do to achieve these objectives?

To meet these objectives, first part of the expansion program is to introduce new power plants, to rehabilitate or upgrade the technology of the existing plants and also to involve private companies in the construction process, which is a big support because when we had this ambitious plan, we have had a self assessment of the company's strengths and weaknesses and the external environment in order to see what complementary role could be played by the private companies. So to achieve this goal, some of the committed projects now are a 300 megawatt hydro-power plant, which is under construction, a 190 megawatt power plant to be commissioned by next October and a 150 megawatt plant to be started soon. There is also the possibility of starting another big plant recently to meet the fast growing demand the country is facing. The emergency power project, because now we are highly dependent on hydro scheme and we are subject to hydrological effects like drought. So for the first time now we have two projects of thermal-based generation, one to be commissioned in the beginning of June and the other by the end of October. We have also projects under feasibility scheme, projects under pre-feasibility scheme, projects under reconnaissance scheme. So now we have a number of feasibility studies, which shall be completed after one year, which includes 'Ametti' plant which is expected up to 100 megawatts, the 'Gilgel Gibe 2' of about 450 megawatts, the construction shall be started soon, 'Beles' is about 200 megawatts and the others 186-440 and 374 megawatts. So a total of about 1700 megawatt plants are under feasibility study. So we have system at occupational phase, system under construction and feasibility, per feasibility and reconnaissance. The pre-feasibility level projects have also a number hydro projects. Out of these under feasibility studies, for some of them the construction shall be started soon. The feasibility and decision-making according the market plan, which looks for the supply and demand balance in the country, which forecasts in short-term, medium-term and long-term. So based on that, the optimum plants enter the construction phase, this is the process.

When do you expect most of them to be finished?

Two shall be finished in 2007-2008, another plant shall be commissioned this coming October, three plants shall be commissioned up to October. So within 5 years hopefully about 3 big hydro projects can be additionally commissioned. These are the 4 big hydro plants in the South and South-West area, it is to the Omo basin towards South Kenya and the Southern grid of the continent. Recently 'Geba 1' and 'Geba 2' are entering into the feasibility phase.

Where are these plants based, are they around Addis Ababa?

'Tekeze' is in the North, 'Gilgel Gibe' is in the West and 'Gojeb' is in the South, as well as 'Gilgel Gibe 2' and 'Geba', 'Belese' is for instance in the North-West. Because of network optimisation and fair distribution of generation plant in the country, there is a planning aspect which takes care of the resource optimisation aspect on the one hand, and, on the other hand, the fair distribution of the plants for the network balance as well as the regional equitable power network development.

What about the Eastern part of the country?

There is the first gas field of the country, the Calub gas field, but one of the immergency projects to be commissioned in October is in the Eastern part of the country. It is a termal based and close to the port, so it is already focused on the East.And we also have medium and long-term targets of transmission expansion, proportional to generation and the high voltage transmission capability within the country and within the neighbourhood countries, it is also part of this 5 year program. We have started with Sudan and Djibouti and we are negotiating with Kenya.

Your aim is, within 5 years, to supply all Ethiopia with electricity and as well export to different countries?

Yes, because the regional interconnection is a matter of optimisation. Whenever we have shortage we can buy, but dominantly thanks to our resource, there is the English-British grid connection through the channel, this is the same in the North Africa grid, Mediterranean grid, the European grid, the concept is mutual.

Do you have large foreign companies working with you?

In this company we have 177 contacts and 59 projects on going now. Most of them have of international nature. So we have companies from all over the world: Asia, Europe dominantly, North America, Latin America and African companies. There are some companies in engineering service like consultancy, supervision, some in construction, some in key projects, and some sub-contracting of projects and some manufacturing companies, one of the well known manufacturing companies in the industry. Because this is one of the most promising growing power market in Africa, so compared with the power network saturation in Europe the market is here. So it is a big attraction for European and Asian companies especially which have a big stake here. We have about 300 kms high voltage transmission network and about 750 km regional connection project. Also we have a number of new technology introduction projects like optic fiber ground wire which allows the use of the transmission system for telephone communication, for information highway. So for the first time, our transmission system includes using the network for communication, even international communication network. The other is the national control center project. For the first time we are going to establish a national control center project, it is already started, it is a 3 year program so all the network in the 10,000 or more kms, which involves 70 towns connected network, the major towns I mean, shall be operated from the city. This is a high-tech project which involves ICT application, software and hardware development, manpower development as well, developing engineers and technicians with high technology. The other is upgrading the city distribution system such as introducing underground cable partially, the overhead line of the town shall be underground, and introducing isolated wires to overcome wind effect, trees and some accidents which allow short circuit. Because our financing rule and the market concept is based on competition, so in this high- tech program mostly European companies are competing. It is under the national competitive tender. Some are under tender, some are coming every year, our fiscal year starts July 7th, so from July 7th onwards we issue a new fiscal year and new projects. The other major product is the rural electrification program that involves electrifiying about 70 towns per annum, in the past we used to electrify about 10 towns per annum, now we are going to electrify 70 rural towns per annum. So this is part of the universal electrification scheme, since one of the company's missions is the fair electrification to all regions.

Regarding our financing scheme could more. Our investment coverage for this country is a big commitment and big in size, it is in the range of 2 billion investment program. So it is classified as foreign currency component and local currency component and the generation has a big percentage of investment need, about 71%. There is also the power transmission and distribution, then the institutional capacity building including human resource development, management development with high-tech skill. Proportional to these projects, we have a human resource development program to which about 5000 employees shall take part in the 5 year human resource training scheme. So our financing scheme holds loan and credit financing, because the grant component is very minimum now for the company, equity contribution and self financing. We finance about 30% of our annual investment from occupational income. So we have a positive cash flow which goes to investment. Financially it is a sustainable company and some of our financing partners are the World Bank, the Ethiopian Investment Bank, the African Development Bank, the Nordic Development Fund, the Ethiopian government and the company itself. And we give service to the communities which have their financial resources and which want to be electrified, like NGOs, we sell our service.

Regarding the sector program, there is a visionery approach based on master plan establishment and proceeded with short, medium and long-term investment program. The company has got its vision, its goal, its objective and its strategy which is based on environmental analysis and identifing key startegic issues. Of course the company is facing challenges and in continuous dynamic process. Our planning is based on continuous review because of the dynamic sector and the external environment. We are working with partners with private capital, public-private partnership is encouraging and developing, we are working with community ownership, private financing and following the technology growth dynamism. In addition to this there are 5 independent power producers who have signed a memorandum of understanding with company, they are international companies and local partners. So they are negotiating about 5 projects within the range of 801 billion investment. This allows joint-venture partnership or independent production and send to our grid. We have allowed private local companies for the first time to manufacture and compete with international product and I think some countable companies have become successful to compete and manufacture electrical appliances like insulators, steel poles and transmission, and power transformers as candidate products. Just to achieve this goal, one of the strategies is human resource development, management development, introduction of ICT application for our regional districts and central office facilities. The first phase of the project is in place to connect 8 regional towns with ICT application, the regions are connected. We are working also with another 100 districts to be connected for material resource management, data base management, information management, financial management, human resource managment and customer service, and to link also our customer service with banks, post offices so the customers can get services like billing and other services through private and public banks and post offices. And we are also working together with municipalities like linking water, billing of water and power is achieved for the first time so the customer has now easy access to pay at one center to services and also with street lighting in town, infrastructural development like sewerage, water communication we have intergrated our master plan to work together. For isolated areas, private funds are allowed so we protect private developer in isolated areas not to compete with their market, this is a new policy, to encourage them to come to the business and we have now a new tariff structure under study to be finalised which takes care of subsidy element for the poor and long run marginal cost approach, because the tariff should be capable to return investment such as to encourage investors to come to the sector.

What is the demand compared with what you are providing today?

In the last 10 years, despite supression of limitation the generation and network capacity because of the fast growth and the change in policy and the change in the economic environment, especially the private sector and some public sector, up to now we are experienced about 15% growth annualy but this is despite surplus demand because of limitation. Now our plan this year is within the range of 60,000 new customers who will connect to the network but there is a big expectation that this could be doubled or trippled in the coming year, every year there are some policy changes to attract new comers, to encourage them to connect with the grid, so we should be so efficient to take care of such demand. Surprisingly, there is also a certain capacity for people to pay for it even in rural towns, and the willingness of the people to pay is encouraging.

Can you give us an idea of your export plans?

Now the detailed study of regional demand is under way, but definitely it is within the range of 100 megawatts. When the regional connection is developed in the North and in the South, this demand definitely will be very high because of the green energy, the resource is very high in this country when compared to other countries, except Congo, the biggest potential in Africa is in Ethiopia.