Seven Days Update, Vol. 19 No. 30

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Conflicting reports about the actual dearth of the foreign currency shortage in Ethiopia continues to roar in the financial sector. And, the IMF became the latest organization to speak out on the matter estimating the official forex reserve held at the central bank to be equivalent to imports over a two-month period. During the successive weeks, commercial banks in Ethiopia, including the state-owned giant Commercial Bank of Ethiopia (CBE), were seen unable to entertain any letter of credit services from their customers. As the problem started to persist in the weeks following, pundits and members of the trading community started to express fears that the official forex reserve accounts of the country might have been depleted severely. Nevertheless, others argued that this was unlikely, citing the excess reserve accumulation that was announced just a year earlier (The Reporter, Sep.15).

The African Development Bank has approved a $348m loan for Ethiopia and Kenya to finance a cross-border power line, the second phase of a $1.26bio project to help improve power supply. Ethiopia is poised to generate revenue exporting power from its hydropower resources to Kenya, which is facing constant power blackouts, Kenya, east Africa's biggest economy, has been investing in its infrastructure, including expanding power supplies to meet growing demand amid robust economic activity. The electricity will originate from a number of existing and future power plants in Ethiopia. AfDB said Ethiopia would receive $232m of the funding, while Kenya would take $116m. The World Bank approved the first phase of the funding in July, totaling $684m. The project, a 1,068 km high-voltage transmission line, is co-funded by the World Bank, the French Development Agency and the Ethiopian and Kenyan governments (Reuters, Sep. 20).

The Ethiopian Electric Power Corporation (EEPCo) has announced that it earns 2.1m USD per month from the export of electricity to Djibouti. EEPCo's head of Public Relations, Misikir Negash, told reporters that EEPCo exports 35-40 MW of power to neighboring Djibouti regularly. According to Misikir, power is supplied between 5:00 p.m. and 1:00 a.m. without any impact on local customers. He indicated that the corporation has also fulfilled preconditions to export electricity to Sudan in the near future (ENA, Sep. 21).

(NYSE: BA) has delivered the first 777 Freighter to Ethiopian Airlines marking the first 777F to be operated by an African carrier. Today's 777F is being leased to Ethiopian Airlines from GECAS. "As the largest African cargo carrier operating in some of the fastest growing trade lanes of the world - between Africa and Europe, Middle East, and Asia - the new 777 Freighter fleet will significantly enhance our tonnage and range capabilities," said Tewolde GebreMariam, CEO of Ethiopian Airlines.

Announcing its operational and financial results for the fiscal year which ended on 30 June 2012, Ethio-Telecom indicated that the number of mobile subscribers in Ethiopia has reached 17 million. In a press briefing, Ethio-Telecom's operator, CEO Bruno Duthoit, confirmed that the total mobile subscriber base reached 17.26 million users at the end of June, with net additions running at an average of 450,000 per month over the past year. Taken overall, Ethio-Telecom reported 18.28 million subscribers, up by 59% year-on-year, including 805,000 fixed lines in service and 221,000 internet/data connections (WIC, Sep. 21).

The Ashegoda Wind Power project launched in Tigray State with a capacity of 120 MW at a cost of 210 € will become fully operational in March 2013. Project Mechanical Engineer Solomon Yisema told that government is undertaking a wind power project in the state and in Adama localities. He said currently the project can generate some 90 MW while the remaining capacity will be completed in March. Solomon said the single turbine can generate 1.67 MW. The project is situated 28 km away from Mekele town. It is financed by the French bank BNP Paribas through a soft loan amounting to 210m € facilitated by the Agence France de Development (ENA, Sep. 18).