Plans to restructure the overstretched and inefficient Ethiopian Electric Power Corporation (EEPCo) have been set in motion after Ethiopian authorities contracted Indian company Power Grid Corporation to take over the management of the State-run company.
Power Grid Corporation MD RK Nayak says that the management contract, with a $16.7-million, will be for a period of two years.
“EEPco is an integrated firm with generation and distribution. Power Grid will take up the key positions and manage the company for two years to make it more efficient and to expand it,” he says.
Power Grid, which is wholly owned by the Indian government, was selected from a list of several global companies that had vied for the contract.
The Indian company, which has distinguished itself in the power sector, particularly in transmission, will be expected to oversee the restructuring of EEPCo at a time when Ethiopia is investing heavily in power generation, transmission and distribution.
Currently, EEPCo is the sole utility responsible for generating, transmitting and distri- buting electricity in the Horn of Africa country.
Power Grid will, besides other things, be required to oversee the unbundling of EEPCo into three separate entities that focus on generation, transmission and distribution.
The unbundling will enable Ethiopia to effectively undertake investments in the power sector, which it has identified as critical in pushing economic development.
The Horn of Africa nation has unveiled an ambitious energy master plan that requires a staggering $10.4-billion to be invested in the power sector over the next four years.
According to the master plan, some $7-billion will go towards the construction of dams and harnessing other power generation sources, such as geothermal, wind and solar; $1.8-billion will be required for investment in trans- mission facilities and $1.6-billion in distri-bution systems.
Over this period, the country hopes to quintuple its production capacity from 2 000 MW to 10 000 MW, construct 17 000 km of transmission lines and expand and rehabilitate the distribution system.
EEPCo becomes the second Ethiopian State- owned entity to have its management out- sourced to a foreign company. Two years ago, management of the country’s sole telecom provider, Ethiopian Telecommunications Cor- poration, was outsourced to France Telecom.