|SUBJECT||Korea Eximbank Helps Light Up the Night in Ethiopia|
The Export-Import Bank of Korea announced on June 5 that it signed an EDCF Loan Agreement with the Ministry of Finance and Economic Development of Ethiopia to provide USD 78.4 million in financing support for the Sululta-Gebre Guracha Power Transmission Project.
The financing support is the largest EDCF loan approved to Africa.
* EDCF is an economic assistance fund for developing countries offering long-term, low-interest rate loans to support their industrial development and economic stabilization. EDCF was established by the Korean government in 1987 to increase cooperation with developing countries. As of May 2012, EDCF has supported 278 projects in 49 countries, with approved support totaling KRW 8.2674 trillion.
The Sululta–Gebre Guracha Power Transmission Project* will alleviate the shortage of electricity and stabilize power supplies in the state capital Addis Ababa and the Oromia region by installing substations and transmission lines. Oromia is the site of a new industrial complex in Northern Ethiopia.
* The project encompasses installation of 400kV and 230kV transmission lines and two new substations in Oromia as well as installation of a 230kV ring system around Addis Ababa.
Timely completion of the project will provide additional power to more than 10,000 residents of the area and double the power supply in the region.
This project is the result of a USD 100 million EDCF loan MOU concluded between the Bank and the Ministry of Finance and Economic Development during President Lee Myung-bak’s state visit to Ethiopia last July.
South Korean companies have a comparative advantage in terms of technology in high-voltage transmission lines and substation construction industries.
Korean companies will take on the engineering and construction processes of the project and as such, the project is anticipated to serve as a bridgehead for entry by Korean companies into Africa’s power infrastructure market.
A representative of the Bank commented, “We hope this first case of EDCF support to Ethiopia, an ally during the Korean War, will contribute to sustainable economic growth of one of the poorest nations in the world and improve the quality of life through increased access to electricity. It will also show the international society how much Korea has changed much since the 1950's.”
* Ethiopia in Northeast Africa has a population of 76 million and a per capita GDP of USD 408, rendering it one of the poorest nations in the world.