About 100 tankers of Ethio-Djibouti Share company stay unused for their primary purpose for years as construction to connect Awash depot with the Addis Ababa-Djibouti railway remains far from completion owing to lack of finance.
“We have about 100 tankers with a capacity handling of around 70,000 liters, while a single fuel tanker can manage the capacity of two fuel trucks,” stated Ethio-Djibouti Railway General Director Tilahun Sarka as he explained how the tankers have not been used for their primary purpose of transporting oil due to lack of connection with the oil depots including Awash depot.
The project which was started at the beginning of 2021 was expected to be completed in one year to which China Civil Engineering Construction Corporation CCECC was awarded by Ethiopian Railways Corporation for the design and construction of Awash Oil Depot Link Rail Connection and Unloading Facilities.
“The lack of finance has halted the project on its tracks,” said Tilahun adding, “Even though Awash depot has been operational for years, the line connecting the railway with Awash depot is yet to be completed. We brought the tankers targeting Awash depot, so we have to patiently wait for its connection.”
The project which is located in Afar regional state at Awash Sebat has a total cost of close to 55 million dollars which is to be covered by the Government of Ethiopia.
Currently, the two ports in Djibouti that serve the multipurpose and containerized cargo have already been connected to the main railway line, while Horizon, which is about 2 km from the main line is not connected. As Tilahun explains, the Djibouti government has shown willingness to connect the railway with the port as soon as Ethiopia completes connecting Awash Depot with the Railway.
“Sometimes we use these tankers to transport water for employees in the railway,” he said showing the secondary use for the tankers. For the single tanker the company had to part ways with USD 100,000 to acquire them.
Awash petroleum depot is a hub for the national fuel import,and despite it being close to the Ethio- Djibouti railway line it still uses trucks to store the product imported from Djibouti. “If we connect the line with Awash we could easily transport fuel to the country from the fuel port in Djibouti,” Tilahun emphasized.
The project which includes the construction of a new Awash Oil Depot link rail connection and unloading facilities is set to establish a connection between the oil depot and Addis Ababa–Djibouti railway.
The contract was awarded to China Civil Engineering Construction Corporation (CCECC), while China International Engineering Consulting Corporation was brought on board as the consulting firm.
If completed the project is said to reduce traffic congestion along the Ethio-Djibouti road by creating an additional option to Ethiopia to use rail transport besides trucks to carry fuel from the port of Djibouti.
Ethiopia uses the port of Djibouti as a gateway for its 95% of fuel import. The project when complete will also help the country to smoothly transport fuel from Awash depot to the central parts of the country.
Finance proves crucial as oil tankers go unused
Safaricom-Ethiopia preps for M-Pesa
Safaricom Ethiopia announces that it has started to purchase equipment to operate M-pesa in Ethiopia projecting to get a license in May. The consortium led by Safaricom secured its license which does not entail mobile financial services but the firm remains hopeful that it will get the nod sooner rather than later.
“As far as our preparedness, the equipment for the M-pesa platform has been ordered,” said Pedro Rabacal, Chief Technology Officer of Safaricom. He explained that the consortium is waiting on the rent and that it’s a matter of getting the right documentation in place from the right authorities to be able to import the equipment.
As per the law, the national bank of Ethiopia restricts foreigners to get into the financial services space. However, government is said to be finalizing on legal changes to allow the central bank to issue Safaricom with a license for mobile financial services.
“To operate M-pesa we would need a similar license to that of Ethio telecom for Telebirr, from the national bank,” said Matthew Harrison-Harvey, Chief External Affairs and Regulatory Officer of Safaricom, adding, “we are diligently preparing with the assumption that we will be launching the service since the Prime Minister said on May 2021 that in 12 months’ time the foreign owned telecommunications operators will receive a license.”
Authorities said that the Safaricom license will be upgraded to include mobile financial service so as to introduce its popular M-Pesa to the market of 110 million people. This came after the decision to include the mobile phone-based financial services in tele’s license offered in May.
A couple of weeks ago Eyob Tekalgn /Ph.D./, State Minister of Finance, in his interview with Kenya medias said government will keep its promise to Safaricom by giving it the M-Pesa license by May.
“We are waiting for the government and the national bank’s communication with regards to the change in directives as we prep for the application of the license,” said Matthew.
As per its agreements with the Ethiopian government, Safaricom- Ethiopia gears towards its commercial launch which will come to fruition, early April, as it plans to provide 4G and 5G internet service. It is also said that by 2023 a low orbit satellite will be put in place to provide nationwide 4G coverage by the firm.
Safaricom plans to switch on its network on April 2022 and lots of testing are ongoing. According to Pedro Rabacal, the firm plans to gain 25 percent coverage of the population by March 2023.
The private telecommunications entrant is working with the global telecom giant Nokia and with the Chinese global telecom giants Huawei for its infrastructure development for its operation in Ethiopia. In addition, Safaricom will use satellite services to cover the country with areas that cannot be reached using fiber networks. The telecommunications firm will also be using rooftops in addition to building their own towers for their networks.
Safaricom Ethiopia which was formed by the amalgamation of Safaricom, Sumitomo Corporation, CDC Group and Vodacom secured operational license from the government to officially do business in Ethiopia as a second telecom company after the state owned Ethio Telecom. To get the license it had to pay USD 850 million to the government and promised to invest up to USD 8.5 billion in the coming decade.
Gov’t in talks with prospect railway investors
The government has been holding talks with European companies over the privatization of Addis Ababa-Djibouti Railway as part of its plan to privatize state-owned enterprises so as to reform the economy and expand the role of the private sector.
According to the Ministry of Transport and Logistics, the railway needs an additional investment of 800 million dollars in order to be fully operational and efficient.
“We and the government have been encouraging the Chinese companies to have some amount of share on the railway but the companies are undecided on the matter,” said Tilahun Sarka Director-General of Ethio-Djibouti Railway.
“The question arises on the financial capacity that is required in acquiring the rail,” said the director as he explained that the value is about 4 billion dollars, since 4 billion is the amount that went into the construction costs of the project. “A detailed valuation assessment is of course needed to know the exact value when privatizing the line,” Tilahun underlined.
Ethiopian Railways Corporation is among the major state-owned enterprises that have been announced as slated for partial or full privatization. Specific details on the privatization process of the Ethiopian Rails Corporation are yet to be announced.
“The government will reform the railway infrastructure to enable the private sector to enter the country, which will support the country’s economy by increasing the efficiency, modernization, revenue generation and viability of the sector,” said Dagmawit Moges, Minister of Transport and Logistics, on Monday, February 21, 2022 whilst attending the official launching of a new scheme called ‘commuter train’ that the Railway started which is said to offer convenient and cheap transportation services for the residents near the station and along the line.
“We launched it considering the many resident settlements along the line to which we have not yet set up a railway station. Thus we did so in order to allow them to enjoy the convenience of the railway transportation in addition to the existing 14 stations the railway has. Thus we have added 5 additional stations,” explained Tilahun with regards to the realization of the new commuter train scheme.
The Minister of Transport and Logistics, Semerita Sewasew, State Minister of Finance, and Zhao Zhiyuan, China’s ambassador to Ethiopia, were among the attendees at the commencement of the Addis Ababa – Djibouti commuter train service.
As indicated at the launching ceremony, Akaki, Awash, Mulu, Afdem, and Erer are the new 5 stations which now tally the number of stations to 19.
“Residents along the railway can take the commuter train from the 19 stations. Moreover, the railway will bring development in the areas along the rail line,” stated Tilahun.
“The 752-km transnational railway, as a flagship project in the Belt and Road cooperation, demonstrates the aspirations of African countries to spur continental free trade by augmenting intra-Africa infrastructure connectivity,” remarked Dagmawit.
The 760km electrified line which runs from Addis Ababa to the port in Djibouti City, was opened in October 2016. 70 percent of the 4 billion dollar project was financed by China’s Exim Bank. The Addis Ababa-Djibouti electrified railway, also known as the Ethiopia-Djibouti railway, was then contracted for build to the China Rail Engineering Corporation (CREC) and China Civil Engineering Construction Corporation (CCECC).
With regards to its impact the railway has cut the transportation time for freight goods from more than three days to less than 20 hours and has also reduced the cost by at least one-thirds.
Ethio-Djibouti Standard Gauge Railway has been transporting fertilizer, cement, and metal products for the past four years. In 2021 the railway recorded 86.13 million dollars in revenue, a 37.5 percent increase in 2020. The line was used by 449 passenger trains and 1469 freight trains over the year, transporting 77,357 TEUs. The railway has also created numerous job opportunities for locals, with more than 4,000 locals employed so far, which accounts for over 90 percent of the total staff.
As Dagmawit suggested, the railway needs an additional investment of 800 million dollars to be fully operational.
Ethiopia has 75 percent share on the railway line that is 760km of which 100km is in the Djibouti border. Currently, the Chinese company is managing the Railway; the government pays about 60 million dollars per year to the managing company with the agreement set to stay for the next two years. The management which started in 2016 has gone on to train local employees who will take over when the time is due.
The government plans to expand the Addis Ababa-Djibouti railway line to 4,000 km as per the ten-year development plan by expanding the railway line and connecting it to other neighboring countries’ ports.
Aysha Wind Farm to enter the national grid
Ethiopian Electric Power (EEP), which officially launched the first power generation from the national flagship project of the Grand Ethiopian Renaissance Dam (GERD), is under preparation to inaugurate Aysha Wind Farm II, located at the Ethio-Djibouti border.
Moges Mekonnen, Public Relation Head of EEP, said that the project which is located at Shenelle Woreda of Sitti Zone of Somali region has a capacity to generate 120 MW of power.
“New technologies and design that have never been seen in the first three wind farm projects in the country have been implemented. For instance each windmill and generator has a capacity to generate 2.5 MW at maximum which is higher than that of 1.5 MW at the other existing three farms,” he explained.
The wind speed per second at Aysha is very high compared with the other developed areas, due to that the design has been revised from the initial plan of installing 80 windmills to 48 windmills, whilst maintaining similar generation capacity.
“The project has 8 energy clusters that manage six windmills each. So far 32 of the 48 turbines have been fully completed, while the erection work only remains for 16 turbines,” the Public Relation Head revealed to Capital.
He said that by now the generation capacity for 80 MW is almost concluded and now the 16 turbines with a conbined generating capacity of 40 MW will go operational.
The EPC project is managed by the Chinese Dongfang Electricity and 85 percent of the USD 257.3 million worth project is covered by Exim Bank of China while the remainder is covered from the national coffer. Aysha is located about 700 km east of Addis Ababa and 173 km from the Dire Dawa.
The other operational wind farms are Ashegoda, Adama I and II, with a total installed capacity of 324 MW.
A week ago at the big event held at Guba, the first two turbines of GERD, which was being constructed on Abay River officially started the production of 375 MW of energy.
In related developments EEP is said that the compensation claim on the ongoing projects is affecting its activities.
Moges said that the compensation claim which is being requested by the community on some project areas is becoming very high and against the reality on ground.
“Sometimes compensation request are higher than the total project costs, which is totally unacceptable to be settled,” he said adding that such kind of issues have forced EEP to pause some projects.
He called on the public to understand the motive of the projects which primarily benefit the community who reside at the project areas.
