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Project Financing
The construction cost of Gibe III Hydroelectric Project is 1,470 million Euro. Ethiopian government is the sole financer with the local currency amounting to 448 million Euro payable in Birr, and in addition to the local payments,it has paid so far 164 million Euros in foreign currency to the contractor.
A contractual agreement of 35 million Euro has already been signed between Ethiopian Electric Power Corporation(EEPCo) and TBEA Limited company of China for the installation of power transmission lines from Gibe III to Wolayta Sodo substation. Of which, 85 percent is to be covered by the EXIM Bank of Chinese government.
The electro-mechanical (EM) cost, about 250 million, of the projects is expected to be covered by the African Development Bank (AfDB), and the European Investment Bank (EIB) is as well expected to finance nearly 100 million Euros for the equipment supply & installation of the hydro- mechanical (HM) part of the project.
The detailed financial status is indicated Below:
The Government of Ethiopia (GoE)
Ethiopian government is the main source of finance to the project through EEPCo as equity. The GoE will finance the local currency portion of the Project's cost, which is equivalent to 448 million Euros. It is also expected to finance the foreign currency balance.
African Development Bank
(Public Window)
Ethiopian government has requested the African Development Bank about 250 million Euro to cover the electro-mechanical cost of the project.
The Bank's several missions had been here in Ethiopia to hold various meetings with the Ministry of Mines and Energy (MoME), EEPCo`s various offices and institutions including the Ethiopian Environmental Protection Authority, key NGOs, the Bank`s Country Office. During the occasion, EEPCo signed an Aide memoire with the respective missions.
All the final environmental and social impact assessment (ESIA) and resetlment action plan (RAP) reports are submitted to AfDB and then the Bank has posted the executive summaries of the reports on it's web site, but no comments had been received until its deadline.
During the 44th African Development Bank Annual Meeting, the issue of Gibe III has been raised and discussed among donors and NGOs. The detail information was given on a separate report.
In addition, a consultative meeting with Kenyan government delegations has been conducted on June 3, 2009, in which EEPCo and its consultants presented about ESIA issues of the project to the delegation. The meeting was organized by the Ministry of Foreign Affairs (MoFA), Ministry of Water Resources (MoWR) and EEPCo.
The high level delegation led by John Rao Nyaoro, Kenyan director of water resource, also visited the Gilgel.Gibe I, II and III project sites from June 4-6, 2009.
On March 17, 2009, the Board of Directors paid a visit to the project site and the Project Concept Note has been presented to the Bank's senior management for approval. To this end, EEPCo has provided the necessary information.
Although the project Concept Note is planned to be presented to the Bank's Board of Directors in September 2009, the Bank seems to wait the Economic, Financial and Technical assessment ( EFTA) of the independent consultant results, and hence currently mediation is on progress with the Friends of Lake Turkana (FoLT).
African Development Bank
(Private Window)
 The Bank's Private Window has shown interest to finance up to 100 million Euro for the Project. An Aide Memoire has been signed with the general agreement of establishing a Special Purpose Vehicle (SPV).
Recruitment of Financial Advisor and negotiation have been progressing since June 10, 2009.
European Investment Bank (EIB)
The Ethiopian Government has requested the European Investment Bank about 100 Million Euros to finance the hydro-mechanical part of the project.
The Bank's several missions had been here in Ethiopia; in due time, they visited Gibe II and Gibe III Projects followed by thorough discussions with EEPCo's management staff.
The hydro-mechanical steel structures tender document was given to the Bank for approval. The tender evaluation report has also been submitted to the Bank for endorsement. According to the evaluation report, the bidders are found to be technically acceptable and the economical advantageous offer has been selected. EIB's "No Objection" on the HSS Bid Evaluation Report has been received on 9 January 2009. EIB has advised to conduct contract negotiation.
EIB's mission came to Addis Ababa and discussed about the additional studies required to fill the gap on the Gibe III ESIA studies.
Italian Government
 A formal request for financing of Gibe III Project has been sent to the Italian government by the Prime Minister's Office. Hence, the government of Italy is anticipated to finance about 250 Million Euro so as to cover part of the civil work costs of the project.
A high level delegation paid a visit to the project site on September 2008. Following presentations by EEPCo about the project, there were discussions with H.E, Minister of Mines and Energy. Upon the request of the high level mission,all the Environmental and Social Impact Assessment (ESIA) reports were submitted to the Italian government through the Ministry of Foreign Affairs.
On April 22, 2009, another high level delegation visited the project site . As per the remarks made by the delegation, additional and updated documents were sent to the Italian government through the Ministry of Foreign Affairs.
In addition, the high level government delegation had been to Ethiopia in mid June 2009 to visit the Gilgel Gibe II Project. During the visit, the delegation has confirmed its government's commitment to finance Gibe III Project. Additional documents required for project appraisal were sent to the government of Italy (Director General for Development cooperation).
Chinese Government
The Chinese government is the main financier for the installation of power transmission line from Gibe III main station to the new Wolaita substation. The Ethiopian Electric Power Corporation (EEPCo) and TBEA, a Chinese company, singed a contractual agreement on July 24, 2009, amounting to USD 34,007,472.41. Of which, 85 percent will be covered by Chinese government through EXIM Bank.
The installation of the power grid comprises LINE 1 & LINE 2 covering 50.3km and 51km, respectively. The first line has 400kv, 3-phases, double circuit conductor on a double circuit transmission line while the second one, having identical features to Line 1, consists of single circuit conductor with the same transmission line and kilo volts.
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