Power Play: Tigrai Beating Eritrea
In PIA fan club members’, mistakenly referred to as higdefawiyans, anxiety to show the “open relationship” between PIA and the Eritrean people in a town hall meeting in mid-October 2012 in Zoba Debub, we are given the opportunity to learn if PIA has any concrete growth and investment plans for Eritrea.
This is a major contrast between the government of Ethiopia and PIA. One can find a great deal of information about Ethiopia’s current and future socio-economic and political progresses and plans by browsing Ethiopian websites, including websites maintained by its government ministries. Moreover, one can watch the Ethiopian parliament to obtain detailed information about its progresses.
In contrast, we, Eritreans, are reduced to fishing information from PIA’s interviews and “town hall” meetings to ascertain where we are and where we are headed. ERI-TV and Shabait.com provide vague information about social-economic progresses that are long on propaganda but severely short on details. In this article, this writer will throw some light as to how fast Eritrea is falling behind even compared to our neighbors.
Ethiopia is busy investing in multi-billion dollar projects, while we are peppered with miniscule projects in Eritrea that have no impact on short and long term well-being and prosperity of Eritrea. Most of the Eritrean projects advertised on ERITV are designed to deceive Eritreans into thinking that there is economic progress in Eritrea, while in reality most are band-aid projects that don’t have usage life longer than one or two years. For instance, those micro-dams that we are repeatedly told about fill quickly with sediments within two years that they no longer hold significant amount of water. These are NOT one of those build once and use forever with little maintenance projects, but are high maintenance projects that become neglected as quickly as they come into use. Good luck finding these types of neglected projects on ERITV.
The main issue PIA raised during the mid-October 2012 town meeting in “Zoba Debub” was about electric supply. After peeling off the circular reasoning and fallacious arguments that PIA normally engages in, one is left with unmistaken understanding that PIA has no plans to expand this critical infrastructure.
In addressing this issue, PIA pointed out that Eritrea doesn’t have the capacity to generate more than 120MW of electricity. After stating how critical infrastructure electricity is, PIA continued saying that Eritrea’s electric power capacity should be raised to 500 MW or 200 MW (in reverse order), and that even if 50 MW was added yearly that it would be sufficient. Even the 50MW per year he mentioned were raised as hypothetical rather than as project under consideration. There is a big difference between 200 MW and 500 MW. If there was a concrete plan (5-year or 10-year), it would be natural to throw numbers that closely reflect what is in a plan or study. The fact that PIA was throwing wild numbers reflects that PIA has no intention to expand Eritrea’s electric generating capacity.
If Eritrea was not an authoritarian and totalitarian (fits both descriptions) dictatorship state, we would have been told in concrete terms through published feasibility studies and economic plans what Eritrea intended to do, as the Ethiopian government is doing. Instead, we are left wondering what “our government” is doing, as if the progress and health of a nation is a matter of concern for one man.
Eritrea’s electrical power capacity is as follows:
- Hirgigo Power Plant (1998) – 88 MW (now being expanded by another 2 x 22 = 44 MW, its maximum capacity in its current design)
- Beleza (1995) – 17 MW
- Stand-alone generators in Assab and other towns – approx. 10MW total.
- Wind farm near Assab – 750 KW
The Hirgigo and Beleza power generators have been suffering significant voltage fluctuations and loses 18% of its transmitted power due to technical losses, if which, hasn’t been addressed would cause damage to the generators and lose their capacity.
In determining whether 120MW, 200 MW, or 500 MW is needed, additional data is needed:
- Eritrea has the second lowest electricity consumption per capita in the world at 54 KWh per person per year (lowest being Haiti)
- In 2009, Eritrea produced approx. 260 GWh and consumed nearly as much 240 GWh. In 2012, this electrical output may be significantly less due to fuel shortages resulting in continuous electrical outages.
- Most developing countries, mostly in Africa, consume above 500 KWh per person per year. Rich countries consume above 5,000 KWh per capita and super consumers (esp. in very cold & very hot areas) use over 10,000 KWh per capita
- Eritrea’s domestic population is estimated at around 4.5 Million.
Theoretically, 120 MW power can generate (x 24 hours/day, 365 days/year) about 1,051 GWh per year. But in reality, because of maintenance downtime, losses, peak-hour demands and other factors limit output to less than 50% (although well maintained systems can operate up to 85% of time).
If Eritrea is to reach consumption level equivalent to most other African countries (say, 700 KWh per capita), Eritrea needs to increase its electric output to 3,150 GWh per year (from its current 260 GWh per year). At 50% efficiency, Eritrea needs about 700 MW of electrical generating capacity.
However, if PIA wants to deliver electricity to every household in Eritrea under his ‘equalization of services to all Eritreans’ political ideology, and including anticipated population growth for the next 20 years, a minimum of 1,500 MW of electrical generating capacity is needed. This is based on extrapolation of current demand which is 240 GWh by less than 10% of the population using electricity for the most minimum purposes.
Where are we? Daydreaming as Eritrea or busy building infrastructures as Ethiopia?
OTHER IMPORTANT FACTORS:
MWh count is not the only important factor in addressing electric production issues. Other factors to consider are as follows:
- Peak-hour demand could be significantly higher than average or low demand periods. For instance, day time hours, and even specific time spans within daytime, may require more power than night time.
- In case of Eritrea, 99% of its electrical power is generated from fossil fuel (Heavy Fuel Oil) which must be bought in hard currency. Increasing capacity would be meaningless if Eritrea doesn’t have sufficient hard currency reserve to import fuel. It was only two years ago that the KUWAIT PETROLEUM CORPORATION brought suit against Eritrea for failing to pay $60 Million in oil purchases, which Eritrea subsequently paid. The latest news has Independent Petroleum Corporation suing Eritrea for unpaid KD 19 Million (Kuwaiti Dinar)
Another of PIA’s fallacious argument for delaying the installation of additional capacity is that the electrical transmission lines must reach across Eritrea before adding power. After all, he says, the outlining areas must receive the same treatment as the main towns, esp. Asmara. This statement is loaded with false arguments.
1 This argument is constructed to allude the recent electrical outages in Asmara and other major towns and that it shouldn’t be a concern because these major areas shouldn’t get any preferential treatment than outlying parts of Eritrea. In reality, outlying areas do not benefit from electrical outages in major towns. This insinuation indicates more the mind of failure than satisfying its listener.
2. PIA’s argument that transmission lines should be put in place before installing additional capacity raises even more questions.
- More electricity consumption means more hard currency demands. Unlike Ethiopia, PIA has no plans to build renewal energy in Eritrea, thus must rely on import fuel to generate electricity. As long as Eritrea is unable to earn hard currency through prudent economic policies, adding transmission lines and electrical capacity won’t translate into increased electrical output. Of course, the insinuation is that Eritrea’s economy will pick up once the transmission lines are in place.
- Electricity consumers need sufficient income to pay for electricity. The cost of producing electricity is about $100 USD per MWh (many factors but is a good estimate). This translates about 0.10 cents US per KWh. At official exchange rate of Nfa 15/USD, electric production costs about Nfa 1.50 per KWh. At black market, which is a better reflector of cost, electric production costs about Nfa 40/USD, which translates to Nfa 4 per KWh. The Eritrean Electric Authority (EEA) charges about Nfa 2.50 per KWh, which doesn’t even cover cost.
- Based on the above calculation, a household with 2 bulbs of 60W operating 4 hours a night will pay 36 Nfa/month (120W*4 hrs*30 days = 14,400 Wh = 14.4 KWh). If price per KWh goes up to Nfa 4, electric bill will be Nfa 57.60. If one adds fridge, cookers, etc…, the cost of electricity increases tremendously.
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The question is, can 80% of the population that gets by on subsistence living or condemned to idleness of national service afford an extra 36 Nfa/month ($1 USD).
MOST CRITICAL FACTOR
The most critical factor is that electric supply be provided without interruption. At least a 99% uptime, equivalent to 15 minutes outage per day and which is still too high, should be maintained. Frequent disruptions render the electronic world useless (including banking), commercial fridges and freezers can’t maintain food at safe levels and many other consequences. In today’s Eritrea where the economy has slowed down to a crawl, interruptions may not be a major concern other than public frustration. Without 99% or higher uptime, Eritrea can’t attract investments.
The first factor that is causing the current interruption is that PIA doesn’t have the hard currency reserve (while whatever hard currency that flows in is skimmed into Fubon Bank) to sustain oil purchases needed to fuel Eritrea’s electrical demand. PIA doesn’t feel electricity as critical and thus is willing to divert hard currency into “other areas”.
How much hard currency is needed to generate electricity? Various factors determine cost per electricity per MWh. Fossil fuel based power generators cost on the average $100 per MWh over their expected life, of which some $66 per MWh is for fuel and other ongoing maintenance. If correct, it would cost USD $16.9 Million per year to generate the 260 GWh electricity Eritrea produces on the average in the last five years, i.e. this is in addition to the hard currency cost of setting up the power plant. This is pocket change in today’s world where it wouldn’t even buy one a 400 m2 penthouse in central Manhattan, but significant for hard currency starved Eritrea.
The second factor is that the Hirgigo and Beleza power plants are not receiving proper maintenance because Eritrea Electric Authority doesn’t have access to sufficient hard currency to care out its responsibilities, and instead choosing to pursue band-aid solutions that is destroying the power generators, thus reducing efficiency and increasing downtime.
CONTRAST THIS WITH TIGRAI AND ETHIOPIA
Unlike Eritrea, Ethiopia and Tigrai have concrete plans to address their infrastructure and economic issues:
Tigrai: Tekazze Hydroelectric Dam 300 MW (2009) $365 Million USD
Ashogoda Wind Electric Farm 120 MW (2013) Euro 210 Million
Tekazze II (planned) 450 MW
Tigrai is part of the overall Ethiopia electric grid system. In 1991, Ethiopia had a capacity of 420 MW. Since EPRDF took over under the most capable leadership of the late PM Meles Zenawi, the following projects are being added (in addition to the above projects in Tigrai).
- Gibe I (2004) 180 MW $ 331 Million
- Gibe II (2010) 410 MW Euro 370 Million
- Gibe III (2013) 1,870 MW Euro 1.5 BILLION
- Gibe IV (2015) 2,000 MW $ 1.9 BILLION
- Beles (2010) 460 MW For irrigation of 140,000 ha
- Fincha Amerti (2012) 100 MW $ 276 Million
- Halele Worabese 440 MW Euro 470 Million (2014)
- Chemoga Yeda 278 MW $ 555 Million (2013)
- Genale Dawa 256 MW $408 Million
- Genale Dawa IV 256 MW (Part of Master Plan)
- Grand Ethiopian Renaissance Dam 5,250 MW Euro 4.5 BILLION
- Border 800 1,200 MW (Part of Master Plan)
- Mendaia 2400 2,800 MW (Part of Master Plan)
- Bedo Abo 2,100 MW (Part of Master Plan)
- Kara Dodi 1,600 MW (Part of Master Plan)
At the end of its 25 year economic plan, Ethiopia will have over 20,000 MW of electric power. Contrast this with Eritrea which has no plans to expand its electric power, and may not have more than 200 MW within this time frame. For comparison purposes, Ethiopia with a population of about 15 times Eritrea will have over 100 times the electric capacity.
IMPORTANTLY, ALL THESE PROJECTS ARE HYDROPOWER PLANTS (except one). Most of the projects are either operational or approaching completion (except the ones noted with being part of master plan). Ethiopia is embarking on over $10 BILLION USD projects. This is in contrast to Eritrea which is only spending less than $60 Million on additional 44 MW generators in the last ten years and has no plans to add capacity in the near future.
Hydropower plants are more expensive to build than fossil fuel based power plants. However, operational cost will be much lower and, equally important, will minimize foreign currency demands, unlike Eritrea which must continue using its limited hard currency for fuel purchases.
ADVANTAGES OF ELECTRIFICATION
Ethiopia’s aggressive investments in electric generation will alleviate most of the issues relating to the following:
- Increased capacity with interconnected systems will mean that Ethiopia’s power disruptions will be significantly less than 1% which will encourage the modernization through electric sensitive technologies (i.e. banking system computers, and other systems that require ‘real time’ access to information, etc…)
- TRANSPORTATION SYSTEMS can be electrified. For instance, the Addis Ababa Light Rail Transport system is based on electric power, which will reduce by that much the dependence on fossil fuel. Intercity rail can benefit from this electrification. Ethiopia will be able to operate its transportation systems with little hard currency requirements. In contrast, Eritrea will continue to import fossil fuel using its limited hard currency.
- COOKING FUEL – electrification will eliminate the need for gas (butane) which is supplied in gas cylinders. For those in countryside, there will be no need for burning wood or kerosene, unlike Eritrea.
- EXPORTS – Energy is the single most important source of growth and symbol of prosperity. Ethiopia will earn significant hard-currency (or at least bartering leverage) with its neighbors which purchase power from it. The following arrangements have already been made with neighboring countries to supply electricity,
- Sudan – 200 MW. This may allow Ethiopia to buy fuel oil from Sudan in exchange
- Djibouti – 200 MW. This may allow Ethiopia to pay for port usage. It is worth noting that with a population one-fifth of Eritrea (1 million population), Djibouti is adding to its existing 85 MW another 100 MW through energy recovery, 100 MW (solar) and 50 MW (wind). As important, Djibouti’s 85 MW produces nearly the same amount of electricity at 235 GWh as Eritrea’s 260 GWh (based on 2009 output which is probably significantly less in 2012).
- Kenya – 500 MW. This may allow Ethiopia to pay for its port usage at Mombassa.
ERITREA’S ILLUSIONARY PROJECTS
PIA gives us the impression that he is busy developing Eritrea and not concerned about other country’s developments as benchmarks. During his answers at the Zoba Debub Town Hall Meeting, he said that he isn’t concerned about flashy building towers in major cities.
But what are PIA’s projects that are keeping so busy? We were told that Eritrea is too busy building its infrastructures.
- Port – Asseb Port is wasted through non-use over the last ten years. Massawa Port had one of its berth expanded over 12 years ago but remains neglected. In contrast, Ethiopia is building a new port at Tadjourah in Djibouti, which will serve northern Ethiopia while the Port of Djibouti will serve Addis Ababa and Southern Ethiopia.
- Airline – Eritrean Airline is an orphan and mismanaged into irrelevance – and it is not due to lack of demand but a deliberate policy. In contrast, Ethiopian Airlines has grown in leaps and bounds in the last 20 years, becoming one of the premier airlines in Africa and a major player in world airline business. Ethiopian is the second airline (after Japan Airlines) to receive Boeing 787 Dreamliner. The CEO of Ethiopian Airlines was just awarded, and deservedly, the African CEO of the Year.
- Railway – PIA propaganda machine told us that the Asmara-Massawa railroad project costing millions of dollars is the renaissance of Eritrea. In reality, this was reconstruction of an antiquated railroad system that is not serving any socio-economic purpose. The track gauge of 90 cm is too small in today’s world. In contrast, Ethiopia has already awarded railway projects to build over 5,000 Km of railway. Ethiopia plans to build 23,000 km of railway in the next 25 years. Among the major railway constructions is the $3.2 BILLION USD railway connecting the City of Mekele to Port of Tadjourah. Addis Ababa’s Light Rail Transit, which will be able to carry 80,000 passengers per hours, and costing around $400 Million USD is currently under construction. http://www.erc.gov.et/index.php/projects/national-railway-network-of-ethiopianrne.html http://www.erc.gov.et/
- Road construction – Most of the road constructions in Eritrea were undertaken during the 1991 to 2001 period when the G15 were still in charge of projects. No new project has been undertaken since 2001 other than some within urban areas and minimal maintenance work on existing rural roads. Since 2009, most construction works have come to full halt due to lack of hard currency (where the small amount hard currency that trickle into Eritrea are duly deposited into Fubon Bank).
- Marine Resources – are largely neglected in Eritrea. Various international fish processing companies were turned down by PIA. There are no plans on how to exploit this renewal resource for the benefit of Eritreans. Marine resources include fishing, offshore gas, bunkering, tourism and free port. However, it is also important to know that PIA has awarded some limited fishing rights (under licensing agreements) to South Korean and other major fishing companies. The payments for these fishing licences amounting to millions of dollars are quietly deposited into Fubon Bank. Another renewal natural resource that has been totally neglected – SALT.
- Drinking (Potable) Water – most of the rural potable water projects were financed through European Union and implemented between 1996 to 2006 period. The only major dam was built around 1997 near Asmara (Tokor Dam).
- Housing – PIA has NOT built a SINGLE affordable housing in Eritrea in the last twenty-one years. Discussing the implications on socio-economic and the future of Eritrea would take a whole volume to address. It is suffice to say that over 100,000 affordable housing are needed to make up for lost years, and if the Eritrean socio-economic system had been allowed to function over the last twenty-one years, most of these issues would have been addressed on gradual basis. In fact, many of the houses under construction by Diaspora Eritrea were frozen in 2009 and are crumbling in their unfinished state.
- Mining – much can be said but interesting to know how much PIA is pocketing from this project. Eritrea, or is it PIA, earned over $400 Million from gold productions (comprised of royalties, income taxes and share of profit). http://www.nevsun.com/docs/financials/Q32012-NSU-FS.pdf
The nagging question is, Eritrea was able to meet most of its import needs during the 1991 to 2005 period without gold production. When hard currency source had doubled from gold production (i.e. most of the sources of hard currency used to be remittances amounting to over $600 Million USD), Eritrea is now defaulting on foreign oil purchases, suffering food shortages and other symptoms of chronic hard currency shortages. One may speculate that PIA is hoarding hard currency, a war chest, in anticipation of increased world isolation and possible further financial embargo on the regime.
In stating that he is interested more in the outlying areas, PIA is alluding to the Gerset Project (and its Ali Gidir Water Diversion Scheme), which is the only active project in Eritrea today.
Once fully functional, some 20,000 ha of land is anticipated to be in full production mode. Twenty one years after independence, we now rely on Animal Farm’s Windmill to keep our hopes alive. But what does 20,000 ha of land produce?
From the outset it is worth mentioning that Gerset Project is still at experimental stage because it is used to grow a whole variety of products – cotton, sugar cane, crops, tomatoes and you name it and everything is being tested there. For illustration purpose, it is suffice to ask how much cereal crops can be produced from 20,000 ha (i.e. no other product is produced.
- 1 hectare of land produces between 1,500 kg of cereals in developing countries to 3,500 kg in developed countries.
- Based on 1,500kg (1.5 ton), Gerset project would produce 30,000 tonne of cereals in a year. In fact, actual Eritrean data show only 1 tonne per hectare.
Actual data for Eritrea (when Eritrea’s Ministry of Agriculture used to publish data)
ha tonnes ha tonnes
Cereal 375,000 99,100 477,000 458,000
Pulses 5,800 1,200 7,000 3,300
Oil Crops 13,400 2,600 16,200 11,100
With a population of nearly 4 Million, Eritrea needs over 620,000 tonne of cereals. Thus the Gerset project would produce about 5% of the country’s demand. With about 30% of the country’s need being produced by subsistence farmers, Eritrea will remain short by still 65% of its need, which doesn’t nearly meet its ‘self-sufficiency’ slogan.
Calculating food requirements:
Human beings need at least 1,200 calories per day, and recommended amount is that intake should not be less than 2,000 calories (with some variations by age, gender and level of activity). Wealthy nations consume on the average about 2,800 calories per day.
Energy density for various food components
- Fat 9 cal/g
- Proteins 7 cal/g
- Carbohydrates 4 cal/g
- Organic acids 3 cal/g
- Polyols 10cal/g (sugar alcohols, sweeteners)
- Fiber 2 cal/g
- Ethanol 7 cal/g (drinking alcohol)
o For simplification purposes, and my readers can do their own calculations, heavy cereal diet, which is mostly carbohydrates, would mean
- Domestic Eritrean population is estimated at around 4.5 Million
- Say, 1,500 calories per day (and not the 900 calories per day PIA is prescribing for the Eritrean population, which isn’t even enough to maintain basic body functions)
- Each Eritrean, on average, needs to consume 375 gram of carbohydrates to generate 1,500 calories of energy per day (1,500 cal/day divided by 4 cal/g)
- 375 grams per person per day multiplied by 4,500,000 Eritreans yields 615,938 tonnes of food needed. It should be noted that various combinations of food groups yielding different food components will yield slightly varying food requirements in weight.
- In reality, the 20,000 ha may be used for sugar cane and cotton, which are both cash crops and thus Gerset will satisfy significantly less than 4% of the cereal needs of Eritrea, say 1% of Eritrea’s food need.
- It is also worth noting that food production isn’t just about tomatoes and barley. There are no projects to increase dairy products, such as milk needed for developing strong and healthy children. There are also no projects, public or private, to develop the meet market.
- Moreover, there are no efforts to encourage subsistence farmers to develop farmers’ cooperatives to market their products. If it is about helping the outlying areas, the well-being of farmers, cattle and other animal growers is critical.
In contrast, Ethiopia is developing its agricultural industry through joint ventures with Indian and Saudi agro-business ventures.
It is worth noting that Gerset project employs about 2,000 people, of whom about half are residents from the surrounding area. With over 200,000 national servicemen locked up in “national development projects”, one wonders where these national slaves are spending their time when it is clear that all infrastructure projects have been frozen for the last 6 years due to “hard currency” shortages.
Tigrai is implementing over USD $ 5 BILLION projects while Eritrea is investing less than $250 Million. After paying its import needs, and after PIA’s siphoning into Fubon Bank, Eritrea has little hard currency to undertake infrastructure projects. Ethiopia is aggressively increasing its exports, and borrowing the rest in the full knowledge that these loans will be forgiven in few years, and ploughing its hard currency reserves into infrastructure projects. Ethiopia is already committed to spending over $25 BILLION USD in various projects. In ten years, Eritrea will still have experimental Gerset project whereas Ethiopia will have leap forged, per its 2025 Plan, to become middle income earning country.
The fact that Eritrea’s limited wealth is being siphoned into Fubon Bank is the worst kept secret. The Central Bank of Eritrea (CBE), which has legal responsibility over Eritrea’s hard currency reserve, is regularly forced to transfer all its hard currency without any records into a black-hole called Fubon Bank. No accountability!
To put these numbers in simple terms, Ethiopia is growing 100 times faster than Eritrea (in dollar amounts invested).
Ethiopia’s growth isn’t only measured in dollar terms. Under the capable leadership of the late PM Meles Zenawi and the exciting new leadership under PM Hailemariam Desalegn, Ethiopia is healthily progressing towards fully sustainable democratic system. Of course, challenges are fact of life and dynamic in nature, but prudence, pragmatism and sound political judgment are being used in Ethiopia to address them to-date.
Our fellow countrymen who try to sell us that Ethiopia is busy planning to invade Eritrea seem to hide the fact that Ethiopia is progressing at brisk pace to join the world economic order. One can’t hide one’s own failure by wishing ill-will on others or wishing for disaster. The success of Ethiopia is Eritrea’s success in the long run.
Just as pointer, the border issue is dead. Ethiopia won’t give agree to demarcation on the ground except through negotiation, and Eritrea can’t invade and take disputed land by force. That is what Min. Haile Woldetensae (Drue) said in 2000 and that remains true to today and for the next 25 years. It will only be our socio-economic prosperity and political skills that will allow us to resolve this issue amicably, and without diverging from the 2002 border ruling.
Lastly, during the last US election, the Democrat’s key argument against the Republican platform was that the Republican’s promises didn’t add up, i.e. their ‘arithmetic’ didn’t add up (very well articulated by President Clinton at the Democratic Party Convention). The same can be said about PIA’s propaganda – nothing adds up. This writer hopes to raise the understanding of the various national issues among my fellow compatriots by raising these types of ‘real’ issues that seem to fall between cracks in our passionate cyber discussions of Eritrean politics - which generate a lot of heat but shed no light. As most of the topics discussed here are outside the field of knowledge of this writer, any errors can be corrected in the future. This article is designed more to allow the younger generation and aspiring future leaders to understand the key numbers generated in a country, esp. such as Eritrea where socio-economic data aren’t provided in order to hide utter failures.
For those drowning in hatred politics …
November 24, 2012