Ethiopian Electric Power (EEP) is currently in negotiations with Italian financial institutions to secure a €400 million commercial loan aimed at addressing critical financing gaps in the construction of the Koysha Hydroelectric Dam. The move follows a special dispensation granted by the International Monetary Fund (IMF), which exceptionally authorized Ethiopia to access commercial borrowing specifically designated for the flagship infrastructure endeavor.
According to updates shared by EEP leadership regarding the 2018 budget year performance and targets for 2019, construction of the Koysha Hydroelectric Dam has reached 77 percent completion. Chief Executive Officer Engineer Ashebir Balcha highlighted that despite severe financial bottlenecks, the project has continued to make headway through state interventions and EEP’s internal revenues. For the upcoming fiscal period, the enterprise plans to elevate physical progress to 87 percent, raising the dam’s height to 201 meters and completing the civil dam structure itself, even though turbine power generation capabilities will require further timeline adjustments.
Financing remains the single largest obstacle facing the development, with total project expenditure projected to approach €3 billion before any electrical output is realized. “We still face a budget deficit at Koysha,” Eng. Ashebir acknowledged during the briefing, emphasizing the capital-intensive nature of the installation. The upcoming funding agreement is calculated to resolve substantial operational constraints, ensuring that essential heavy civil works and procurement processes proceed without complete standstill.
The recent negotiations with Italian lenders have yielded positive preliminary commitments, with institutions indicating a willingness to extend nearly €400 million out of the required €500-plus million operational gap. EEP intends to cover the remaining balance through internal resources to drive the project across its key upcoming milestones. Originally scheduled for completion within seven years under its initial contract, the project timeline has been extended by two to three years due to compounding financial constraints.
Once fully operational, Koysha is set to become one of the nation’s primary renewable energy assets, generating substantial output to meet domestic demand and expand regional power exports. The strategic combination of IMF flexibility, direct external commercial credit, and local budget reallocation reflects Ethiopia’s determination to finalize major energy infrastructure despite broader macroeconomic challenges.
#Ethiopia #Energy #KoyshaDam #Finance #Economy #Infrastructure #EEP #IMF