The European Investment Bank confirmed it has stopped funding environmental and social impact studies for the Gibe III hydroelectric power project in Ethiopia, as the Ethiopian government has found alternative sources of finance.
The bank, however, reaffirms its strong interest and commitment to supporting the East African energy sector, according to a press release.
“The European Investment Bank is committed to supporting the energy sector across East Africa where technical, environmental and social standards are in place and financing terms are agreed with individual project promoters,” said Plutarchos Sakellaris, European Investment Bank vice president responsible for Africa.
In the past, the bank has funded preliminary studies designed to help a group of donors determine whether to finance dam building, the lender said.
Italy’s Salini Costruttori S.p.A is working on the Gibe III dam with financing from the Ethiopian government. Once completed, the 243-meter-high (797 feet-high) dam and hydro project will generate 1,870 megawatts of electricity, more than doubling Ethiopia’s current power capacity, according to the Ethiopian Electric Power Corp.
Previously, it was reported that Ethiopia and China signed a $459 million agreement for work on the Gibe III hydro project, with the Chinese government providing a loan for construction costs. The Gibe III hydroelectric project is being built on Ethiopia's Omo River.
In the agreement for the Gibe III hydroelectric project, Salini Costruttori S.p.A will continue handling the project construction, media reports indicate. The Chinese Dongfang Electric Corporation (DEC) will carry out the hydro-mechanical and electro-mechanical part of the project, the chief executive of the Ethiopian Electric Power Corporation said.
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