A majority of countries in the Nile basin region have low electrification rates. With the mandate to increase access to electricity, and develop a strategy for the optimum use of energy and financial resources in the region by stimulating cross-border collaboration. An Intergovernmental Memorandum of Understanding (IGMOU) was signed by ten countries that lie along the Nile River, to form the East African Power Pool. (EAPP)
East African Power Pool countries include Rwanda, Djibouti, Tanzania, Kenya, Burundi, Uganda, Sudan, Ethiopia, Egypt, and Libya. South Sudan was part of the EAPP when united with Sudan and is expected to re-join the group.
Egypt resigned from the EAPP in 2016 due to its opposition to the construction by Ethiopia of the Grand Ethiopian Renaissance Dam (GERD) – an upstream dam and hydro plants along the Nile River. Egypt accounted for 66% of the energy production and almost 75% of the total demand for electricity.
The five smaller member countries (including Burundi and Rwanda) together account for less than 2% of the total demand. While several interconnections existed before the establishment of the EAPP, the latter is developing several new interconnections, linking Ethiopia to Sudan and Djibouti; and Kenya to the Democratic Republic of the Congo to the Republic of the Congo. There are interconnections currently underway in the East African Power Pool. A 500KV line between Ethiopia and Kenya is set to come online this year, which will enable a 400MW power purchase agreement between the two countries.
Once also the interconnection between Ethiopia and the Democratic Republic of Congo will enable Kenya to sell its surplus geothermal power to its neighbors, which does not fluctuate with the rains as it is with hydropower. It will be at a lower cost as opposed to putting up thermal power generators.
A further interconnection between Kenya and Tanzania is planned, which would enable it to purchase electricity from Ethiopia through a “wheeling agreement” with Kenya for transporting power over the Kenyan grid into Tanzania.
According to the recently enacted Kenya’s Energy Bill 2019, the Kenya Electricity Transmission Company that is fully government-owned is in the ongoing process of procuring a new national control system which will have the capabilities of system monitoring, planning, training, and load dispatch functionalities. The control center will take control of the entire grid. This will be helpful for regional power trade.
Tanzania is particularly interesting from a regional perspective since the country can provide a bridge between the East African Power Pool and the South African Power Pool. Currently, Tanzania has an approximate deficit of 485MW and is expected to increase in the coming years.
The World Bank is also supporting interconnection between Zambia and Tanzania, which is set to come online this year and will enable Tanzania to engage in short-term energy trade with southern neighbors in the Southern Africa Power Pool.
The East African Power Pool plans to have a regional trading regime between 2020 and 2025. The prospect of Ethiopia becoming a major hydro-power exporter can already be seen by some of the projects that it is undertaking and are nearing completion. Ethiopia and Kenya signed a 20 year Power Purchasing Agreement for 400MW of electricity while Ethiopia and Tanzania are negotiating another agreement for the same amount.
East Africa currently has a surplus of electricity supply and is expected to grow as more projects come online in the coming years.
Ethiopia dominates the East African Power Pool
Ethiopia dominates the East African Power Pool and uses it as a means to pursue the countries broader strategic interests. The country has invested heavily in exploiting its vast hydropower potential through the Grand Ethiopian Renaissance Dam (GERD) on the Blue Nile.
This is part of the country’s long-term strategy in the region, to tie the region to Ethiopia through energy trade and to also tilt the regional balance of power away from Kenya, Sudan and Egypt towards them.
Ethiopia persuaded the EAPP to build a new Regional Head Office and Regional Market Operations and Control Centre in Addis Ababa. The main aim is to gain control over the transmission prices of power traded in Eastern Africa.
Ethiopia even refused and deterred attempts to decentralize East African Power Pool Institutions to Kenya and Egypt.
A lot of interests are at play when it comes to Energy dominance in the region, which is to have the ability to sell electricity surplus, thus generating additional income, increasing power leverage vis-à-vis energy importing countries and creating more jobs and improve their economic outlook.