This dam, the Grand Renaissance Dam, as it is now called, will change the electricity available in Ethiopia many fold. It is scheduled to begin production by 2014 - with three of the 375 MW turbines - and then will be fully operational sometime after 2017. I believe that things are on schedule, from what I saw at the dam site and what I understand from interviews with the officials in Addis. This dam will collectively produce 6,000 MW of power. This power will be used to boost the national grid, but also will be sold to neighboring countries to improve the regional grid, and generate revenue for further development projects. Agreements have been brokered already with Sudan, South Sudan, Djibouti, and Kenya. This dam project is the biggest, but not the only, power project planned for the next 5 years. This construction is inspiring the neighboring countries to also expand their energy networks. The supply has reduced Djibouti's reliance on burning diesel generators. East African governments should probably start thinking about establishing a Regional Power Agreement. Plans are in the works to expand the network out to Uganda and beyond. Ethiopia hopes to be at the center of this East Africa Green Energy effort.
Currently Ethiopia has something around 2,000 MW of power online. Less than 20 years ago there was only about 300 MW online. Currently, less than half of the country is connected to the grid. The power plan, which also includes wind and geothermal additions, has a simultaneous expansion of the grid to more than 75% of the country. The reliance on burning biomass here is at about 90%. People burn wood and manure to cook, heat the home, and for light after dark. The stated hope in Ethiopia is that as electricity becomes more available, people will move away from biomass burning. This would be good for the environment for a cascade of reasons - more trees, better air quality, better soil erosion prevention, healthier ecosystems to include many endemic species, more stable weather/climate systems, less evaporation issues from rivers and streams, less sediment problems in rivers and streams, better water quality (as a result), and the list goes on. But, there are always setbacks. I read in the paper this weekend that some jerk stole a bunch of 220 KV line equipment from the power company resulting in 20 something million birr loss. This is the equivalent of about $1 million USD. I hope that they find the equipment if it hasn't already skipped the country.
I started to explore some literature when I was at Oregon State about the correlations between energy availability and GDP. I found only loose correlations. But, perhaps there is a more direct correlation between energy availability and economic development in under-developed places. The argument that investors will feel more confident to set up factories, businesses, and industry in places where there is a reliable energy source is hard to deny. Establishment of such things allows for more employment. More employment generates more tax revenue. More tax revenue allows for more investment into general infrastructure, like roads and energy lines. It also allows for investment in hospitals, schools, public transportation, libraries, museums, etc.
Finally though, and no less important, I find that the Grand Renaissance Dam is something important for the psychology of the Ethiopian people. This country has been reliant on foreign donors for so long. Ethiopian people are very conscious of this fact. The people I have spoken to feel that this is an answer away from being a donor country. That Ethiopians are standing up and to do something for themselves. Ethiopians are self-financing the project. The money is coming from the pockets of the citizens themselves, regardless of their political affiliation, their economic level, their ethnic identity. You can buy bonds at the bank. You can have the money directly out of your paycheck through your payroll office. Most of the lead staff and workers on the project are Ethiopian, with a few exceptions. This is a project for Ethiopians, by Ethiopians, and it is an effort to do something about the rampant poverty and all the horrors that come with poverty. This dam is one big solid step, but it is not the only step. And people feel this, they feel personally motivated by the project, and confident that it will help change something in their day-to-day lives.
So, in my estimation, the dam is more than just a mechanism for more electricity, or to solidify regional diplomatic ties, or to be an example to the rest of Africa. It is a symbol of Ethiopian national pride, something that is unifying the people across ethnic divides. The dam indeed symbolizes the country's renaissance.