ICBC provides $420.75 million buyer’s credit loan for 1870MW Gilgel Gibe III Hydropower Project

In May 2010, DongFang Electric Company (DEC) and Ethiopian Electric Power Co (EEPCo) signed a $495 million commercial contract for the electro-mechanical and hydraulic steel structure works component of the 1870MW Gilgel Gibe III Hydropower Project. ICBC and EEPCo subsequently signed a buyer’s credit loan agreement to finance approximately 85% of the cost of the commercial contract ($420,750,000). The borrowing terms of the loan were are as follows: 14.5 year maturity, 3 year grace period, and 3.067% interest rate. The Government of Ethiopia’s Ministry of Finance issued a sovereign guarantee in support of the loan. The borrower also purchased buyer’s credit insurance from Sinosure. The purpose of the project was to supply and install electrical and mechanical equipment (turbines) for the construction of the Gibe III dam. The Gilgel Gibe III Dam is 610 m-long (2,000 ft) and 243 m (797 ft) high roller-compacted concrete dam. It withholds a reservoir with a capacity of 14.7 km3 (3.5 cu mi) and a surface area of 210 km2 (81 sq mi), collecting with a catchment area of 34,150 km2 (13,190 sq mi). The reservoir's live (active or 'useful') storage is 11.75 km3 (2.82 cu mi) and dead storage 2.95 km3 (0.71 cu mi). The normal operating level of the reservoir is 892 m (2,927 ft) above sea level with a maximum of 893 m (2,930 ft) and minimum of 800 m (2,600 ft). The dam's spillway is 108 m (354 ft) long and floodgate-controlled with a maximum discharge capacity of 18,000 m3/s (640,000 cu ft/s). Water above 873 m (2,864 ft) above sea level can be discharged through its gates. Feeding the dam's power house are two penstocks that each branch into five separate tunnels for each individual turbine. The power house contains ten 187 MW generators supported by Francis turbines for a total installed capacity of 1,870 MW. Construction works of Gibe III began in July 2006 along the Omo River and it provoked backlash from environmental activists. The African Development Bank and the European Investment Bank were originally supposed to fund the electro-mechanical costs for the project, but they eventually backed out due to the project's perceived negative environmental and social impacts.In August 2015, Ethiopia commissioned the first phase of electricity generation at the Gibe III plant from three turbines with an output of 561MW. Then, on December 17, 2016, the Gibe III dam was officially inaugurated (see '驻埃塞俄比亚大使腊翊凡出席吉贝Ⅲ水电站投运发电仪式'). The plant has 10 turbines each with a capacity of 187MW equaling a total capacity of 1,870MW, and will increase Ethiopia's total electricity output to 4,238 megawatts.

Additional details

1. Some sources identify China Eximbank as the lender (funding agency), but this is incorrect. China Eximbank financed the Gibe III-Addis Ababa Power Transmission Lines and Substations Project (as captured via Project ID#59363 and #59365), which may be the source of the confusion. 2. Some sources identify the project as a commercial loan, but based on OECD standards, the grant element of the loan exceeds 25%, so AidData has coded it as a concessional loan. 3. This project is also known as the Gibe III 10 X 187MW Hydropower Station Construction Project. The Chinese project title is 吉贝Ⅲ水电站 or 吉布3水电站. 4. Some sources suggest that the face value of the loan was $470 million and it was co-financed with Standard Bank. This issue requires further investigation. 5. The total cost of the project was $1.75 billion. However, ICBC only financed 85% of the total cost of one component of the project (the electro-mechanical and hydraulic steel structure works component).

Number of official sources

7

Number of unofficial sources

27