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Africa Development Bank (AfDB) will approve a loan of US$100mn in December 2012 to finance the construction of Geba Dam in Ethiopia's Oromia state
The project, which is estimated to cost US$732mn, will have two hydro power plants, Geba I and Geba II, that will have different power generation capacities. The cost of Geba I is estimated to be US$1.4mn while Geba II is US$1.9mn.
According to an official at Ethiopian Electric Power Corporation, the construction cost increased manifolds since the project was delayed for more than five years as the corporation was running other more profitable projects.
He said that the project cost of the dam was US$535mn when the feasibility study was first conducted in 2005, but the cost increased by 38 per cent when it was later revised for financial purposes.
The ministry of water and energy has submitted the Environmental Impact Assessment and other necessary documents to AfDB in the beginning of 2012.
Lamin G Barrow, resident representative of AfDB, said, “With AfDB only providing a loan of US$100mn, the difference will have to be covered by the Ethiopian government and other financers.”
The bank said that this would be the last finance that Ethiopia would receive from the AfDB as the country has already utilised its allocation of US$600mn allocated for three years since 2009.