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Government Communication Affairs Office

Government Communication Affairs Office

The Growth and Transformation Plan and Its Success


Booklet No.2
Introduction.......... 3 1. Electricity....................... 5 1.1. Achievements during PASDEP Period......5 1.2. Electric Power Development during GTP Period.... 8 1.3. Ongoing Power Generating Plants......11 2. Sugar Industry and Related Products Development.......... 21 2.1. Sugar and Related Products Industry Development in the GTP Period ...... 24 2.2. Expansion Projects in Existing Sugar Factories...... 26 2.3. Ongoing Sugar Development Projects..30 2.4. New Sugar Development Projects 34 3. Summary...... 37 3.1. Electric Power Development and Its Achievements37 3.2. Sugar Industry Development and Its Achievements38 4. Conclusion................40

Addis Ababa November, 2011

Government Communication Affairs Office

Government Comunication Affairs Office, Information Service Directorate, Press, Event Creation and Promotion Department

Tel- 011 554 56 61 011 554 04 71 011 554 04 74 011 554 04 79 E-mail gcao@ethionet.et

Government Communication Affairs Office

Introduction
Ethiopia has become one of the fastest economies in the world in the last five years. According to the 2010-2015 economic growth prediction made by International Monetary Fund (IMF), Ethiopia will also be the third fastest economies in the world after China and India during the years under reference. The country has managed to attain a double digit economic growth amounting to 11 per cent on average annually in the last seven years consecutively thanks to the sound economic policy and strategic plan that was put in place by the government. The strategic development plans and policies designed by the government with the primary objective of guiding and managing the overall development of the country had helped the nation to achieve success in all economic sectors. The Plan on Accelerated and Sustained Development to End Poverty (PASDEP) which had been implemented during 2002/3-2004/5 EC had enabled the nation to attain high and sustained economic growth. The faster and sustainable development in which the country has achieved could be attributed partly to the development of infrastructure and industry sectors. The government has also incorporated infrastructure and industry in Growth and Transformation Plan (GTP) to be implemented in the next
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five years (2003-2007EC) as key priorities of the countrys economic development. By taking into consideration the significance of infrastructure and industry in speeding up national economic development, the government has been investing a substantial amount of resources in these sectors. The huge investments the government had spent on electric power and sugar industry development sub-sectors in particular had helped the country to attain a very fast progress. (PASDEP): Access to electricity has increased at accelerated rate in the country reaching 41 percent by the end of the PASDEP period (2009/10) due to the undertaking of giant hydroelectric power generating projects in different corners of the country. Similarly, encouraging achievements had been registered in the development of sugar industry and related products during the PASDEP period. A number of new sugar factories were built while large-scale expansion projects were undertaken in the countrys old sugar factories which had helped boost sugar production. Alongside with the sugar industry development, the government had also given due attention to the production of ethanol, which is manufactured by the by-products of the sugar factories. GTP: By taking the achievement gained from the enhancement of access to electric power during the PASDEP period as baseline, the government has continued
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to give emphasis to energy development sector since the beginning of the implementation of the five-year GTP in 2003 EC. Accordingly, it is planned to increase electricity coverage in the country from the current 41 percent to 75 percent by the end of the GTP period (2007 EC). Also during the GTP period, the development of the sugar industry and related products including ethanol will get priority, among others. About 10 new sugar factories will be built in the country while a total area covering over half a million hectares of sugar cane farms will be developed during the plan period. This issue will discuss the achievements so far gained in electric power and sugar industry development with particular emphasis on the going giant power plants and sugar development projects and their prospects during the GTP period.

1. Electricity
1.1. Achievements during PASDEP Period
By taking into account the vital role infrastructure play in national economic development, the government has been investing a substantial amount of resources in the energy development sector. Because of the fast economic growth the country has attained in the last seven years, the demand for electric power has been growing at faster rate from time to time.
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In order to fill in the gap between demand and supply, the government has been injecting billions of Birr in investment in the energy sector. It had undertaken giant hydroelectric power projects during the PASDEP period. The construction of new hydropower plants, including Tekeze, Gilgel Gibe II and Tana Beles plants, has enhanced Ethiopias hydropower generating capacity. The countrys total hydropower capacity had increased from only 714 mega watt in 2004/05 to 2,000 mega watt at the end of 2009/10. This accounts for 62 percent of the target set during the PASDEP period. It was also planned to increase the number of towns and rural villages with access to electric power from 648 to 6,000 during the reported period. Accordingly, 5,163 towns and rural villages had got access to electricity by 2009/10. The total number of registered customers of electricity was also raised from 952,000 in 2004/05 to two million in 2009/10. It was also planned to increase the total length of power transmission lines from only 3,380 kms in 2004/05 to 14,792 kms in 2009/10. The total length of power transmission lines constructed in the country during the stated period had reached to 12,147 kms during the PASDEP period. It was also planned to increase the total length of power substation lines from 25,000 kms in 2004/05 to 136,320 kms in 2009/10. By the end of year of the PASDEP period, the total length of power substation lines constructed in the country had reached 126,038 kms constituting 93 per cent of the target set for the plan period.
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Fincha- Amertinesh Power Plant Project Site

It was also planned during the PASDEP period to distribute three million improved energy saving biomass ovens. They were all distributed as planned. As a result, an estimated 26,176 hectares of forest had been conserved from deforestation while carbon dioxide emissions estimated at 36,500 tons had been mitigated. About 10,081 rural families had also benefited from distribution of home solar systems while 238 rural health stations and first cycle schools have got access to solar electric power. During the PASDEP period, the nations petroleum reserve storage capacity increased from 279,800 cubic meters to 369,800 cubic meters.
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1.2 Electric Power Development during GTP Period


Background: Ethiopia has a potential to generate 45,000 mega watt of hydroelectric power. However, its current total power production capacity stands at only 2000 mega watt. Hence, the government has incorporated the energy sub-sector of infrastructural development in its five-year GTP plan, which is being implemented since 2003 E.C. So it is planned to increase the countrys existing power capacity by five times by the end year of the GTP (2007EC). Improving a mix of energy sources by developing renewable wind and geothermal resources, preventing power loss and promoting proper utilization of energy, and providing electricity at affordable prices are some of the implementing strategies of the plan. Targets: It is planned to raise the countrys electric power capacity from existing 2000 mega watt to 10,000 mega watt by the end of GTP period. Per capita consumption of electricity of households will also be increased during the plan period. The electric power supply coverage in the country will also be raised through the ongoing rural electrification access program. The gap between the demand and supply of electricity will be minimized. Reducing power losses is the other target set during the plan period. Moreover, it is planned to produce sufficient electricity for export to the neighboring countries and generate foreign exchange earning during the GTP period. Electricity transmission lines construction: To ensure a reliable electricity supply and transmit the electric power efficiently and economically
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to consumers, construction of a reliable distribution and transmission networks is essential. To this end, due emphasis will be given in the Universal Electrification Access Program to construct new transmission lines & connect them to the national grid as economically as possible.

The Power Distribution and Expansion Program: the Program will adopt
implementation strategies to modernize the power distribution system with the aim of increasing service delivery efficiency, cost saving & reduction of power loss in the distribution system. Action will be taken to ensure availability of efficient, reliable, high quality and economical electricity services to consumers, improve power supply service quality, provide outreach facilities to new customers, and to reduce power interruptions and losses by expanding the network & maintaining distribution lines. Strategic Directions: the strategic directions during the GTP period are development of renewal energy, expansion of energy infrastructure, and creation of an institutional capacity that can effectively and efficiently manage such energy sources and infrastructure. Green Development Strategy: In order to promote and realize the countrys Green Development Strategy, ongoing initiatives to generate electricity from hydropower and other renewable energy sources like bio fuels, solar and wind will remain the directions during the GTP period. In addition, new technological innovations will be utilized to ensure that the energy sub-sectors doesnt emit additional carbon dioxide. To promote and sustain rural alternative energy development activities,
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efforts will be made to enhance the capacity and knowledge of regions, producers and consumers. The distribution of fuel saving stoves and related technologies throughout the country will be given due attention. Objectives: The major objectives for the energy sub-sector are to meet the demand for energy in the country by providing sufficient and reliable power supply that meets international standards at all times. This objective will be achieved by accelerating and completing the construction of new hydropower electric generation projects, and strengthening the existing transmission lines to provide improved access to rural villages all over the country. Modernizing the distribution system will also be considered, so as to reduce power losses to international benchmark levels. During the plan period, an objective is set to transform the national capacity in developing and managing energy by radically reforming the national power company so that the electric power supply services reach at an international standard. Accordingly, the Ethiopian Electric Power Corporation (EEPCO), which is mandated to undertake the GTP in the energy sector, has launched an extensive activity geared towards raising the energy capacity of the nation in accordance with the GTP plan.

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1.3. Ongoing Power Generating Plants:


1.3.1 The Grand Ethiopian Renaissance Dam
Background: The Grand Ethiopian Renaissance Dam, a hydroelectric power generating project, is an under construction gravity dam on the Abay River at a locality called Buamza in Metekel Zone of BenishangulGumuz Region about 750 kms from Addis Ababa and some 40 kms east of Sudan. At 5250 mega watt, the Dam will be the largest hydroelectric power plant in Africa when completed. The foundation stone of the Dam was laid on April 2,2011 by Ethiopian Prime Minister, Meles Zenawi. Structure of the Dam: The Grand Ethiopian Renaissance Dam will be 145 meters tall with 1780 meters length. Its reservoir at 63.5 billion cubic meter capacity, which will occupy an area of 1,680 square kilometers, will be one of the largest in the continent of Africa. The size of the reservoir is estimated to be twice the size of Ethiopias largest natural lake, Tana, which holds 32 billion cubic meters of water at its peak. A saddle dam, supporting the reservoir, will be 5 kms long and 50 meter tall. The Dam will have two outdoor powerhouses with 1,750 mega watt installed capacity with each powerhouse having a capacity of 350 mega watt containing 10 and 5 generating units respectively. The Dams Cost Estimate and Financing: The total cost is estimated at
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3.35 billion Euros or 4.8 billion US dollars. The construction cost is to be covered with domestic financial sources. The government is engaged now in raising funds through the sell of treasury bonds to be purchased by domestic banks and individuals, and public donations. Donations of a months salary by civil servants have been converted into bonds, as per the decision of the Grand Ethiopia Renaissance Dam Public Mobilization Council last July. Millions of Ethiopians, including members of the business community and Ethiopians in-Diaspora, civil servants and other sections of the society have started to buy the bonds with determination so as to realize the Grand Ethiopian Renaissance Dam. Power Generating Capacity: the project is designed to have an installed capacity of 15,128 giga watt hour power a year or 15.1 billion kilo watt hour energy annually. This is equivalent to giving 8 hours per capita light to 86 million Ethiopians. The plant is estimated to have power generating capacity equal to six middle-size nuclear reactors. The Grand Ethiopian Renaissance Dam is expected to triple the countrys power up on going fully operational. Environmental Impact: the environmental impact of the dam is minimal and was taken into consideration by the Ethiopian government. The Dam will greatly reduce the problems of silt and sediment that consistently affect dams in Egypt and Sudan. This has been a particularly acute problem to Sudans Fosseiries dam, which experiences a reduction in output.
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The Grand Renaissance Dam-a Gateway to prosperity

When the Grand Dam becomes operational, communities all along the riverbanks and surrounding areas, particularly in Sudan, will be permanently relieved off centuries of flooding. The Dam will also increase the amount of water resources available by reducing the wastage from evaporation, which has been a serious problem in the aforementioned countries. It will in fact ensure a steady year-round flow of the Nile. Egypt and Sudan will also have the opportunity to obtain increased power supplies from the Grand Dam at competitive prices. Preliminary studies also confirm that by storing more water in narrow gorges, more than 7.5 billion cubic meters of water could be saved from
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evaporation through the Dam. It would thus increase the useful lifetime of dams in Sudan and Egypt. Inspite of the fact that downstream countries would enjoy more benefit than incurring a loss by the construction of the Grand Dam, Egyptian leaders have been exerting their influences on foreign creditors not to finance the construction of dams on Nile River in Ethiopia claiming the building of the dams would affect Egyptian interest. However, the refusal of loans by foreign financial institutions did not stop the Ethiopian government from building the Dam. Ethiopia was able to complete the Tekeze and Tana Beles Power plants with domestic finance. As the effort so far made to solicit fund from foreign creditors has been fruitless, the government is committed to fund the entire cost of the dam by local financial sources. The people and government of Ethiopian are united and determined more than ever before to cover the entire cost of the construction of the project. The Grand Ethiopian Renaissance Dam is scheduled to start delivering electricity after 44 months (in September 2014) when its two turbine units with 350 mega watt power capacity each become operational. The construction of the dam is expected to be finalized fully in a period of six years. The Grand Ethiopian Renaissance Dam is expected to play a leading role in accelerating the nations power supply capacity. It is expected to boost the countrys power capacity by three-fold when its construction is finalized after 72 months.
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1.3.2. The Gilgeil Gibe Power Plant III

Background: The Gilgel Gibe Power Plant III is a hydroelectric generating project, which is under construction currently on the Omo River. The power plant is part of the Gibe cascade, a series of dams including existing Gibe I and Gibe II as well as the planned Gibe IV (1472 mega watt) and Gibe V (560 mega watt) dams. Until February 2011, 41.5 per cent of the construction of the Gilgel Gibe Power Plant III dam has been completed. The digging of the dams left and right wing foundation has been fully completed while 87 per cent of the construction of the power house has been finalized according to EEPCo. Some 77 and 82 percent of the digging of the dams power intake and power tunnels have also been completed. The Gilgel Gibe Power Plant III is scheduled to be finalized fully and is expected to start service in 2013. Structure of the Dam: The Gilgel Gibe Power Plant III Dam will be 243 meter high roller compacted concrete dam with an associated hydroelectric power plant on the Omo river. The dam will hold a reservoir with a capacity of 14 cubic kilometer of water and surface area of 210 square kilometer, collecting with a catchment area of 34,150 square kilometer of water. The reservoirs active storage will be 11.75 cubic kilometer while its dead storage will be 2.95 cubic kilometer.
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Power Generating Capacity: The Gilgel Gibe Power Plant III Dam will have a 1,870 mega watt electric power generating capacity. The power plant is one of the largest power generating plants in the country. Feeding the dams powerhouse will contain 10X187 mega watt generators supported by Francis turbines for a total installed capacity of 1,870 mega watt. The Projects Cost Estimate : The Gilgel Gibe Power Plant III Dams estimated to cost is 100 million US dollars. Benefits: The Gilgel Gibe Power Plant III Dams main benefits will be electricity generation. It is expected to enhance Ethiopias power supply capacity and benefit neighboring countries consisting of Kenya, Sudan and Djibouti.

1.3.3. The Ashegoda Wind Power Project

Background: The Ashegoda Wind Power Project was launched in Ashegoda locality in Tigray Region. The construction of the Ashegoda Wind Power Project is in progress currently. Some 50 percent of the construction of the project has been completed so far. The construction of the project scheduled to be finalized fully in July 2012. Power Generating Capacity: the wind project will have a 120-mega watt electric power generating capacity up on completion. The Projects Cost Estimate: the project is estimated to cost 210 million Euros.
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Ethiopia has also been able to complete wind power projects it generating undertook

around Adama, Aysha, and Debreberhan. The wind farms, which have already started supplying electricity in the respective areas, have a combined capacity of 70 meg watt. Thus, the wind energy farms add color to a number of multi-billion dollar hydropower projects as part of the countrys plan to reach a power generating capacity of 10,000 mega watt in the next five years. During the GTP period, several other hydropower generating plants will be undertaken. Initiation stage is under process to launch other hydropower projects around Geba, Halele-worebesa, Chemoga and Genale areas. It is also planned to carry out a number of new wind and one geothermal energy projects during the GTP period while those under construction will be completed.

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1.3.4. Construction of power transmission lines


The construction of power transmission lines connecting the newly built larger power plants with the national grid is well in progress currently. So far, the installation of electric transmission lines connecting Tana Beles Hydroelectric Power Station with the network of electric supply in the country, has been finalized. This consists of the installation of Beles-Bahr Dar-Debremarkos-Sululta electricity transmission lines with a capacity of 400-kilo volt power and construction of power distribution sub-stations as well as the SulutaGefersa electricity transmission lines, which have the power capacity of 230-kilo volt. The completion of this work has enabled the nation to enhance access to electricity to some degree. EEPCO, along with foreign contractors, is also engaged in installation of power transmission lines with 230 and 132-kilo volt power capacity covering a total length of 2,424 kms. The Neshi-Fincha-Gedo-Gefersa and Tekeze-Shre-endasillasie-Humera power transmission lines with the capacity of 230-kilo volt power are among the lines to be installed. The Alamata-Kombolcha-Kotebe-Kaliti power transmission lines also included in this work. The installation of Harar-Fikand Nekemt-Gidaya power transmission lines and other new lines with 132-kilo volt power capacity are also being undertaken currently. The total length of high power distribution lines has reached now 10,884
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kms while that total length of medium and lower level power transmission lines stood at 126,308 kms. In general, the massive effort launched by the government under a motto Electricity for All has enabled both rural and urban communities to get fair access to electric power supply. In the first year of the GTP (2003 EC) alone, some 678 small towns and villages in the country got access to electricity. Thus, looking into the past shining achievements gained in the energy sector and the fast progress in which ongoing power plants show, there is no doubt for Ethiopia not only to attain GTPs targets but also to be the power house of East Africa.

1.3.5. Electric Power Export


Ethiopia has also planned to export electric power to abroad during the GTP period. It has envisaged providing power to seven neighboring countries after the completion of the ongoing power plants, including the Grand Ethiopian Renaissance Dam. Djibouti, Sudan, Kenya, Uganda, Somalia, South Sudan, and Egypt are the countries in which Ethiopia intends to export electric power. According to the EEPCo, neighboring countries are keen to import renewable energy from Ethiopia because it is cheap and most of them are utilizing energy sources that do not compound the problems of climate change. Ethiopia has already begun supplying electricity to Djibouti since May 2003 EC. By doing so, it has become the first East African country to export power to abroad.
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The 283-km long Ethio-Djibouti Electric Power Transmission Project was inaugurated in October 2011 in the presence of Ethiopian Prime Minister Meles Zenawi and Djibouti President Ismael Omar Guelleh in Djibouti. The 230-kilo volt power transmission line would enable Djibouti to receive 35 mega watt of electricity. Ethiopia in return will get foreign exchange earning amounting 1.5 million US dollars per month. In his speech at the augural ceremony, President Ismael said working together by giving due attention to regional economy ties is not an option but a must. The current economic trend and challenges we are facing compel as not only to work together but also to utilizes our resources in common, he added. Besides the contribution of Ethiopias power export to neighboring countries in further consolidating ties between Ethiopia and its neighbors, it will enable all countries to enjoy the common utilization of scarce resources of the sub-region as President Ismael said. The Ethio-Djibouti Power Transmission Line stretches from Dire Dawa Power Distribution III Station up to the boarder area called Gelile with in the Ethiopian territory, and runs from Gelile to an area known as Pk12 with in the territory of Djibouti. The construction of the double-circuit line, which was launched in September 2007, was completed in mid 2011, according to EEPCO. In addition the service it gives to Djibouti, the line will enable to provide electricity to 12 border towns of Ethiopia following the installation of a transformer with 25 MVA power capacity, an information obtained from EEPCo indicates.
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A memorandum of understanding providing for the supply of electric power to Kenya has also been signed between the governments of the two countries earlier. According to EEPCo, the installation of an electric power line stretching form Ethiopia to Kenya has been launched and is currently in progress. Ethiopia is expected to generate enough power in the next five years to enable it to honor electric power to demand from its neighbors, according to EEPCo. The country has signed initial agreements to supply 500 mega watt to Kenya 200 mega watt to Sudan.

2. Sugar Industry and Related Products Development Background: The history of sugar production dates back early 1950s.
The first sugar factory was established in Wonji, a small town about 20 kilometers away from Adama, capital of Oromia State. The factory was established under a joint venture owned by the Ethiopian government and Dutch private investors. It was named as Wonji Sugar Factory.

Tendaho Sugar Factory Project Plan

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It was from the modern sugar plantation developed through irrigation that the factory uses the raw material for its sugar production. In addition to the supply of raw material (sugar cane) to the Wonji Sugar Factory. the sugar plantation had opened a new chapter in introducing modern irrigation farm in the country. The Wonji sugar factory, which started operation in 1954 EC, had a production capacity of 1,462 tons of sugar per day at the time. The second sugar factory was established in 1962 EC under a name Shoa Sugar Factory. The factory had a 1,630 tons production capacity per day, during the early days of its commencement of production. Later, theWonji and Shoa sugar factories were merged. The countrys third sugar manufacturing plant was established in Metehara town, some 190 kilometers northeast of Addis Ababa, in 1965 EC. The Metehara sugar factory began production by using sugar cane from the modern plantation developed in 1966 EC within its vicinity. In 1974 EC following the change in government all sugar factories were nationalized by the government and started operating under the then Ethiopian Sugar Corporation. The corporation had also been entrusted to administer the Addis Ketema and Asmara Candy Factories together with the above three sugar factories. Inspite of the early introduction of the sugar industry in the country, the sugar industry was unable to show growth as expected due to the negligence of the countrys past consecutive regimes. Hence, the total production of sugar in which the above sugar factories used to produce was not sufficient to meet the growing local demand. After the incumbent government assumed power (since 1991), various measures were taken to boost sugar production and expand sugar cane
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plantation in the country. Accordingly, The capacity of the existing factories have also been expanded and upgraded since then. In 1992 EC when the law dissolved the then Ethiopian Sugar Corporation, all sugar factories were reestablished as public enterprises. And, to render common support to the factories, the Ethiopian Sugar Industry Support Center came into existence in 1998 EC as a share company of the three sugar factories on the one hand, the Development Bank of Ethiopia and Ethiopian Insurance Company on the other hand. A new sugar factory, namely, the Fincha Sugar Factory was also built in 1989 EC to meet the growing demand of sugar in the country. The factory was established with a loan secured from African Development Bank (ADB). In 2006 EC, the Tendaho Sugar Development Project was established in the country. The same year, the Ethiopian Sugar Development Agency was established replacing the then Ethiopian Sugar Industry Support Center so as to assist the sugar factories in project development, research, training and marketing vis--vis its regulating role. The present Ethiopian Sugar Corporation with a vision of developing sugar development activities in a large scale and structure came into existence on October 2010 in a regulation issued by the Council of Ministers replacing the former Ethiopian Sugar Development Agency.

Purposes of the establishment of the Corporation include:


To undertake feasibility studies and researches which are instrumental to enhance sugar industry and related products development
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To establish new sugar industries and expand existing ones To cooperate with pertinent government organizations so as to be able to produce machinaries and spare parts necessary for the building of sugar industries To expand the market horizons of the sugar industrial products to abroad

2.1. Sugar and Related Products Industry Development in the GTP Period.
Targets: It is planned to raise annual sugar production from existing (2003 EC) 300,000 tons to 2.225 million tons by the end of the plan period (2007 EC). Developing sugar cane plantation on 200,000 hectares of is also part of the GTP plan. It is also envisaged to raise sugar cane productivity to 155 tons per hectare by the end of the plan period. Moreover, it is also planned to generate 661.7 million US dollars in foreign exchange earning from the export of sugar during the plan period. The stated sum will be generated from the export of over 1.24 million tons of sugar to abroad. Thus, 623,000 tons of raw sugar and 623,000 tons of white sugar will be exported to the global market during the plan period. Generating 607 mega watt of electric power through the production of ethanol by using the huge volume of byproducts of the sugar factories in the country produce is also part of the plan. Strategic Directions: For the effective implementation of the industrys objectives, human resource development institutional capacity building and relevant research and technological capacity will be enhanced.

To attain these targets, expansion projects will be undertaken within the


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existing sugar factories along side with the construction of the new ones in order to raise their production capacity. The sugar factories, besides playing a prominent role in boosting production, will have a significant contribution in building the capacity of the ethanol co-generation facilities planted with in the existing sugar factories. Emphasis will also be given to enhance the production capacity of the project in the years ahead. The contribution of the sugar industry to overall economic development as well as to job creation will be increased during the GTP period. The sugar factories to be built and related development activities to be undertaken during the GTP period, besides playing a prominent role in boosting production, will have a significant contribution in changing small villages into urban areas. Accordingly, tens of thousands of residential houses and service facilities will be built with in the new sugar development sites during the plan period. The residential and non-residential houses of the new sugar factories will be constructed fully using local agro stone construction materials to be able minimize construction costs. In order to accomplish this very ambitious target in the sector, the Ethiopian Sugar Corporation is working hand-in-glove with the federal and regional governmental institutions responsible for constructing roads, electric power generation, water supply, and telephone networking and housing facilities with in the sites.
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Objectives: A key objective for the development of the sugar industry

during the GTP period is to produce sufficient sugar to meet the growing local demand for sugar. Sugar and related products production will also be expanded so as to support the supply of energy/power and other key economic activities. Accordingly, the Ethiopian Sugar Corporation has been working in collaboration with the Ministry of Urban Development and Construction and its consulting agency so as to come up with appropriate design of the houses of new sugar factories, which will be done at minimum costs and time. For the effective implementation of the industrys objectives, human resource development institutional capacity building and relevant research and technological capacity will also be enhanced. Thus, the government has planned to spend a 75 billion Birr budget for undertaking sugar and sugar related products development activities, including on the enhancement of ethanol production, during the GTP period.

2.2 Expansion Projects in Existing Sugar Factories 2.2.1 The Fincha Sugar Factory
Factory Development: The Fincha Sugar Factory was established in 1989EC. The construction of the factory was started in 1998 EC and was completed in 1999 EC, the year it commenced production. The average
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production capacity of the Fincha Sugar Factory has reached now 110,000 tons of sugar per year. The expansion project being undertaken by Fincha Sugar Factory will increase the factorys production capacity by almost three-fold. The factory, through its expansion project, will have a 270,000-ton of sugar cane crushing capacity per year by the end of the GTP period. Some 47 per cent of the construction the expansion project in which the Fincha Sugar Factory has been undertaking has so far been finalized. The expansion project is scheduled to be completed fully in November 2011. Plantation Development: The factory currently has 14,312 hectares of sugarcane plantation. It is also carrying out sugar cane plantation expansion project in areas known as East Bank and Neshe located in the eastern side of Fincha River and the idle areas existing in the western side of Fincha river. The factory will develop 4,400 hectares of land along its nearby river bank through irrigation soon. A 25-km irrigation canal has already been constructed around this site by the Ethiopian Water Works Construction Firm. Work on the construction of the remaining 23-km canal will be finalized this year (2004 EC). A contract agreement providing for construction of irrigation infrastructure for the farm has already been signed between the Fincha Sugar Factory and Oromia Construction Enterprises. The factory will also cultivate sugar cane plantation on 9,000 hectares of land along the stated riverbank and in an area called Neshe. The cultivation of the plantation will be completed in 2005 EC. Thus, the factorys expansion project will bring its total sugarcane plantation close to 21,000 hectares.
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Ethanol Production: Until December 2011, the Fincha Sugar Factory was the only factory in the country that produces ethanol. The factory currently produces 8.1 million of the countrys 20 million liters total annual ethanol production. The factory is also engaged in the construction of an expanded ethanol co-generation facility aimed at enhancing its ethanol production capacity. So far, some 25 per cent of the construction of the expansion project has been completed. The construction the factorys ethanol co-generation facility is scheduled to be completed fully in November 2011. When the project is finalized, the facilitys annual production capacity will increase from existing 8.1 million liters of ethanol to 20 million liters.

2.2.2. The Wonji/Shoa Sugar Factory


Industry Development: The Wonji/Shoa Sugar Factory, which is the oldest in the country, produces 75,000 tons of sugar per year currently. The factory will be replaced in the course of the GTP period for it is outdated serving for more than half a century. Accordingly, the construction of a new sugar-crushing plant replacing the old one has been launched already. It will have a 173,946-ton sugar cane-crushing capacity per annum. So far, 40 percent of the construction of the new plant has been completed. The remaining construction work is expected to be finalized and start production in March 2012. The factory, when it reaches to its full production capacity, can crush 190,000 tons of sugar cane per year.
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Plantation Development: The Wonji/Shoa Sugar Factory has 8,129 hectares of sugar cane plantation currently. It will be undertaking the expansion of sugar cane plantation project in three sites, namely, Wake Tiyo, Welenchiti and Semen Dodota areas, to expand its sugar plantation. The first one will be developed on 600 hectares of land in an area known as locally Wake Tiyo. As the land is owned by local farmers, an agreement was reached between the factory and the farmers to cover the farms with sugar plantation. Irrigation infrastructure has already been installed on the 600 hectares of the farm. Semen Dodota is the second sugar cane plantation development site in which the factory will have. The cultivation of sugar cane was launched in this site (also owned by farmers) covering an area of 2,300 hectares after the necessary irrigation infrastructure was built following an agreement between the factory and the farmers. The development of the plantation is expected to be completed this year. The third sugar cane cultivation will be launched in an area called Wollenchiti (25 kms northeast of Adama Town) after making similar agreements with farmers who own the land. This site covers 6,640 hectares of land. The three sugar cane plantations will raise the total area in which the Wonji-Shoa Sugar Factory will own to 16,500 hectares by the end of the GTP period. Ethanol Production: It is planned for the Wonji/Shoa Sugar Factory to erect an ethanol co-generation facility soon. The factory is excepted to generate and contribute 17 mega watt to the national grid by the end of the plan period through the production of ethanol.
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2.2.3. The Metehara Sugar Factory


Industry Development: The Metehara Sugar Factory is the countrys largest sugar manufacturing plant with a capacity of producing 136,692 tons of sugar per year. The factory is currently working vigorously on the factorys plant expansion project. Through its expansion project, the factory will be able to increase its production capacity to 270,000 tons of sugar a year. Plantation Development: the factory has 10,000 hectares of sugarcane plantation presently. It has envisaged to increase its plantation size to 30,000 hectares. It will develop 13,000 hectares and 7,000 hectares in the first and second phases respectively. Ethanol Production: The ethanol manufacturing plant built with in the Metehara Sugar Factory has begun producing 12.5 million liters of ethanol since 2003 EC. It was planned to further enhance the ethanol co-generation facility of the factory in the years ahead.

2.3 Ongoing Sugar Development Projects 2.3.1 The Tendaho Sugar Development Project
Industry Development: The construction of the Tendaho Sugar Development Project has already been launched. It will be the largest sugar and related products manufacturing plant in the country, which is expected to start producing sugar in January 2004 EC. The factorys construction is carried out in two phases. The main packages of the first phase of the construction of the factory involves activities such as designing, fabricating and transportation together with the civil and non-civil works. These works were partially accomplished.
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Some 24 percent of the first phase of the construction of the factory has so far been finalized. It will have 13,000 tons of sugar cane-crushing capacity per day when its first phase of construction is completed. The first phase of the construction is expected to be finalized in January 2005 EC. The Project is expected to produce the lions share of the countrys total sugar production. Up on going fully operational, the Tendaho Sugar Factory will have a 619,000 ton-sugar cane crushing capacity per year. Plantation Development: the Tendaho Sugar Development Project currently has a 3,300-hectare sugar cane farm. It was planned to cultivate sugar cane plant on 50,000 hectares of land for the Project in the course of the GTP period. An irrigation dam with a capacity of 2.8 billion cubic meter of water has already been built around the Projects site. Activities consisting of land leveling, pre-seed cane, seed cane and commercial cane plantation are partially carried out. So far irrigation infrastructure was built with in its sugar cane farm covering an area of 7,222 hectares. In addition, irrigation facilities will be built on the factorys plantation sites, which will cover 42,773 hectares, soon. The construction of irrigation infrastructure is expected to be completed in 2006 EC. Ethanol Production: The Tendaho Sugar Development Project will also play a prominent role in enhancing the countrys energy supply potential. Following the completion of the construction of the Projects Ethanol Co-generation Plant, its annual ethanol output is expected to reach 55.4 million liters. Hence, this plant is expected to generate and contribute 73 Mega Watt electric power to the national grid through its ethanol production by the end of the GTP period.
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Housing Development: The Tindaho Housing Development Project was established as an entity of the Tindaho Sugar Development Project by the Ministry of Urban Development and Construction. The Housing Project was set up with the objective of facilitating urban development in the areas where new sugar factories will be built and sugar cane plantation will be developed. Accordingly, the Tindaho Housing Development Project is currently engaged in construction of 17,233 houses to house the Projects employees. It is also constructing 308 various social service facilities with in the stated number of residential houses presently. Already (in its first phase program), the Project had finalized the construction of 3,500 residential houses and social service facilities in five sites which were inaugurated in 2002 EC. The Project is also speeding up the construction of 5,610 additional residential houses and 85 social service facilities in seven other sites as part of its second phase program. Moreover, the Project is carrying out the construction of 8,997 residential and 146 non-residential quarters in other sites. It had already finalized 75 per cent of the construction of 3,448 of the stated number of residential houses and non-residential quarters. Employment Opportunity: the Tendaho Sugar Development Project will also play a significant role in reducing unemployment. The construction of the houses and social service facilities have created new jobs to dozens of people. The project has currently 745 permanent and 183 temporary employees as well as 4,579 daily laborers.
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In 2004 EC, the Project will have 2,840 additional permanent and 6,897 temporary employees. The Project, by the end of the plan period, is expected to create job opportunity to 42,000 citizens.

2.3.2. The Kessem Sugar Development Project


Industry Development: The Kessem Sugar Development Project was an expansion project of the Metehara Sugar Factory. It was after the establishment of the Ethiopian Sugar Corporation that the Project was established as an independent entity. A new sugar factory is being constructed for the Project in a locality called Kessem Addis by the Ethiopian Metal and Engineering Corporation. The construction of the sugar factory is scheduled to be finalized by 2013. It is expected start production in 2014. Initially, the factory will have a capacity of crushing 6,000-10,000 tons of sugar cane per day. Eventually, when the plant reaches its full capacity, its sugar cane-crushing capacity will reach 25,000 tons per day. Plantation Development: The Project has currently 943 hectares of land covered with sugar cane plantation stretching up to an area called Bolhomon. The construction of an irrigation dam which will be used for the cultivation of the sugar cane plantation in Kessem locality has begun recently. The construction of the dam with a capacity of holding 500 million cubic meter of water will be completed by the end of 2004 EC. By the end of the five-year plan, the Kessem Sugar Development Projects irrigation canal and road development will stretch up to 19,900 hectares of land.
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Ethanol Production: The factory will also have co-generation facility, which can produce ethanol. The facility will have a capacity of producing 30,000 million liters of ethanol per annum.

2.4 New Sugar Development Projects


Background: According to the survey conducted at a national level regarding the water resource and canal development opportunities, it is proved that the country has the potential of over 500,000 hectares of land suitable for developing sugarcane plantation. The areas suitable for sugarcane development are the upper and lower areas of Beles River, South-West areas of Lake Tana called Upper Dinder, areas along Tekeze River and its tributaries around Welkayit and Humera, valleys of Anger RiverNegesso, central Genallie River and Barro-Gillo rivers of Gambella. Seizing this huge potential for sugar development, the Ethiopian Sugar Corporation will undertake the construction of new sugar factories and development of sugar cane farms in different parts of the country as part of the GTP plan, in addition to the expansion projects it will be carrying out. In order to realize the plan, it is planned to build nine sugar factories in the next five years, excluding the Tendaho Sugar Development Project, during the GTP period to meet the ever increasing local demand and export to the global market. During the plan period, it is also envisaged to raise the countrys 300,000 tons existing sugar production to 2.25 million tons per year by the end year of the GTP period (2007EC).
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The construction of all of the sugar factories is scheduled to be completed by the end of the GTP period. The new sugar factories will be constructed in Amhara, Oromia, South Ethiopia Peoples, and Tigray regions while sugar cane plantations will be developed simultaneously in these regions during the GTP period. Tens of thousands of residential quarters and social service facilities will also be built in the sites where the sugar factories will be built and sugar cane farms will be developed. The Metallurgic and Engineering Corporation, which was established in 2002 EC through a decree issued by the Council of Ministers, will begin to produce machinaries necessary for the building of sugar factories locally during the GTP period.

2.4.1 The Tana-Beles Sugar Development Project


Industry Development: the Tana-Beles Sugar Development Project will have two sugar factories during the GTP period. The factories will have each a sugar cane-crushing capacity of 10,000 tons per day. Plantation Development: the Tana-Beles Sugar Development Project will have 50,000 hectares of sugar cane plantation to be developed using the Tana Beles Hydroelectric Power Station and a river called Zarema. An irrigation dam is being constructed presently around this river for the development of the sugar cane plantation. The dams construction is expected to be completed in 2004 EC. Harnessing of water from Tana Beles Hydroelectric Power Station is nearing completion. A 50-km irrigation canal will also be built for the plantation.
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Housing Development: the Tana-Beles Sugar Development Project will build some 17,500 residential houses including various social service facilities for its workers.

2.4.2. The Omo-Kuraz Sugar Development Project


Industry Development: The Omo-Kuraz Sugar Development Project will have six sugar factories. Each of the six sugar factories to be built by the Project will have 10,000 tons of sugar cane-crushing capacity per day. Plantation Development: The Omo-Kuraz Sugar Development Project will develop sugar cane plantation on 150,000 hectares of land around Omo River during the plan period. This plantation will be one of the largest sugar cane farms to be developed in the country. Headwork on harnessing the Omo River and construction of a 160km irrigation canal will also be carried out for the development of the plantation in the above mentioned area. Housing Development: The Omo-Kuraz Sugar Development Project will build 52,000 residential houses to house employees of the factories and plantations during the plan period. It will also construct several service facilities with in the sites where the new factories will be built and the plantation will be developed.

2.4.3 The Welkayit Sugar Development Project


Industry Development: the Welkayit Sugar Development Project will have one sugar factory with a capacity of 10,000 tons of sugar canecrushing capacity. Plantation Development: The Welkayit Sugar Development Project will have 25,000 hectares of sugarcane plantation. An irrigation dam is being constructed on a river called Zarema for the development of the sugar cane plantation for the factory. Its construction is expected to be completed in 2004 EC.
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Housing Development: Some 8,700 houses and other different service facilities will be built for the workers and executives of the Project..

2.4.4. The Arjo-Dedesa Sugar Development Project


Industry Development: The Arjo Dedesa Sugar Project will be undertaken around Dedesa River. The Project will have one sugar factory during the plan period. Plantation Development: The Arjo-Dedesa Sugar Development Project will develop sugar cane plantation around the Dedesa River. The construction of an irrigation dam which will be used for developing the plantation has already been launched Dedesa River. Irrigation infrastructure will be constructed. The construction of the dam is scheduled to be finalized after two years. An area covering 37,000 hectares where the dam and irrigation infrastructure will be built will also be made available for development by private investors during the GTP period.

3. Summary 3.1 Electric Power Development and Its Achievements


Power Capacity and Coverage: the massive effort launched by the government under a motto Electricity for All had enabled the country to increase its total hydropower capacity from only 714 mega watt in 2004/05 to 2,000 mega watt at the end of 2009/10. This in return had helped both rural and urban communities to get fair access to electric power supply. The number of small towns and villages which have access to electricity which was only 648 in 2004/2005 reached over 5,500. The countrys power coverage has also reached to 41 percent during the reported period.
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During the GTP period, access to electricity is predicted to reach from existing 41 percent to 75 per cent while the number of registered electric power customers is planned to jump from existing two million to four million by the end of the plan period. The countrys electric power capacity is also expected to increase by 5-times (10,000 mega watt) by the end of the plan period compared from the current 2,000 mega watt. Power Distribution Lines: the total length of electric power distribution lines in the country has reached to 126,000 kms presently. New power distribution lines with a total length of 132,000 kms will be installed across the country to expand power coverage in the next five years. This will increase the total length of power distribution lines to 258,000 kms by the end of the plan period. Some 8,130 kms of existing power transmission lines will also be rehabilitated during the period in reference. Moreover, it is planned to reduce power loss from the current 11.5 per cent to 5.6 per cent by the end of the GTP period.

3.2. Sugar Industry Development and Its Achievements Ethanol Production Development The production of ethanol was
started in the country since 2003 EC in two existing factories. About 20 million liters of ethanol is being produced currently per year. Ethanol is mixed with benzene and is supplied to local market in Addis Ababa City only. It is the inadequate volume of the production that limited the sale of the product to the capital city only. For this reason, it was not possible to distribute ethanol and benzene mix in regions, inspite
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of the high demand there. During the GTP period, emphasis will be given to the development of ethanol production as a sideline development activity of the sugar industry. The by-products of the sugar factories will be used extensively for production of ethanol as part of the development of the energy sector. The production of ethanol in an adequate volume will help boost the countrys energy capacity while it will have a significant economic value in term of saving the badly needed foreign exchange earnings in which the nation is spending on import of fuel. Thus, a total of 607 mega megawatt electric power is expected to be generated through co-generation plants erected with in the existing sugar factories and those to be installed in new sugar manufacturing plants. Sugar Production Development: When all the sugar factories to be built and expansion projects to be undertaken during the GTP period are expected to boost sugar production from existing (2003 EC) 300,000 tons to 2.225 million tons by the end of the plan period (2007 EC). Sugar Cane Plantation Development: the total area in which sugar cane plantations will cover during the GTP period is expected to reach 556,5000 hectares. Employment Opportunity: Besides their economic importance, the new sugar factories to be constructed and several sugar projects to be undertaken in old sugar factories plus the sugar cane development projects to be carried out during the plan period are also expected to play vital role in reducing unemployment in the country. The above mentioned projects are expected to create about 400,000 new jobs during the plan period. An estimated 150,000 of the stated number of people will get access to job until the completion of the projects alone. Up going fully operational, the projects are anticipated to create job opportunity to about 250,000 citizens.
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Housing Development: the Sugar Industry and Related Products Development will also play key role in development of urban areas in places where the new sugar factories will be built and sugar cane plantation will be cultivated. An estimated 35,000 houses will be constructed around the sites where the sugar factories and sugar cane plantations will be established during the GTP period. Several service facilities will also be built with in these residential quarters that will house employees of the sugar factories and sugar cane plantations.

4. Conclusion
As discussed in the above, the development plans and their implementing strategies designed by the government plus the huge amount of resources it has been spending on energy and sugar industry development have enabled Ethiopia to achieve more than success in the two sectors. There is no more success for the country, which started from the scratch, than being able to triple its electric power capacity in less than a decade. There is no success than being able to export power to abroad at a time when most countries in the world are being rocked by power shortage. Success is also inevitable both in the energy and sugar industry sectors since many visible indicators are already being seen even four years ahead of the plan period, as discussed earlier. In general, the massive activities in which the country has been undertaking towards the development of the energy and sugar industry would indeed make Ethiopia the leading power and sugar exporting nation in the continent of Africa by the end of the plan period.

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