UNIT 4: MINERALS

Contents
4.0 Aims and Objectives
4.1 Introduction
4.2 Minerals (Known types and estimated amounts)
4.3 Data on Mineralization
4.4 Mineral Potential of Ethiopia
4.5 Problems or Factors Affecting Exploitation of Minerals
4.6 Review of the Mining Law and its Applications
4.7 Domestic Water Supply
4.8 Policies and Strategies
4.9 Coverage of Urban Water Supply
4.10 Water Tariff
4.11 Government Capital Expenditure on Water Supply
4.12 Electricity Energy Supply
4.13 Generation
4.14 Transmission
4.15 Distribution
4.16 Summary
4.17 Answers to Check Your Progress Exercises
4.18 References

4.0 AIMS AND OBJECTIVES

The objectives of this unit is to acquire student with the knowledge of mineral resources
available in the country as well as the development of water and electricity.

After completing this unit students will be able to know:

 the political mineral resources and its current level of utilization,
 the potential water resources available and its level of utilization, and
 the potential hydroelectric power and its current level of utilization.

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4.1 INTRODUCTION

Minining, water supply and electricity are part of the industrial sector.

Ethiopia is believed to be endowed with large amount of potential in all of the above
three; however, their actual utilizations are at very low levels. The exploration and search
for mineral deposits in Ethiopia has long history, nevertheless, the mineral resources of
Ethiopia are not fully surveyed and identified. The same is true with regards + water and
electricity; the potentials are by far larger than what is actually being used.

4.2 MINERAL (KNOWN TYPES AND ESTIMATED AMOUNTS)

Gold, platinum, salt and tantalum are few of the minerals, which are being exploited in
the country. There is a promising discovery of natural gas in the Somali regional state.
The soda ash of Lake Abijatat in the Rift Valley is capable of producing 20,000 tons per
annum. Soda ash is used for the manufacturing of caustic soda, textiles, tires, detergents
and soaps.

Mining employees about 9000 people; out of these, 55 % are involved in the production
of non-metallic minerals

There are variety minerals in Ethiopia. The major minerals are grouped into three
Metallic Minerals
Non metallic minerals
Mineral fuels

4.2.1 Metallic Minerals

The most promising region for base metal mineral prospector is in the north, west and
south of the country. Exploration during the late sixties and early seventies has defined
several prospects in Ethiopia particularly in Wollega, Sidamo, Tigray and Bale regions
some of the newly defined prospects include;

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4.2.1.1 Base Metals
 Tsehafi Amba sulfide deposit and Aksum's for massive supplied copper deposit
 Base metal sowing in the west, particularly in Wollega where base metals are
found associated with magnetite, in a copper- gold prospect.
 Iron ore occurrences in the Gullies-Yubdo and Bikilal areas, in Wollega region
and at Bikilal and Meka Arba are still under inverstigaions , preliminary estimates
of the Bikini iron ore has indicated that there is a resave of over 20.000.000 tons
of ore .

4.2.1.2 Precious Metals

Geologically, the most promising regions for gold and other metallic mineral are those
terrenes underlain by pre Cambrian rock.

Presently known gold deposits, mostly placer, are largely found around the Adole gold
field in Sidamo region where mining has been conducted for over forty years. The
primary deposit has bead discovered at leg Dembi and nearby sacker, Wollega and
korkoro and the potential for discovery of additional economic primary deposits is high.
Places gold has been mined for centuries in Woolen and Keffa regions by the local
people primarily deposits have also been identified in Wollega.

There are encouraging indications of finding other economically exploitable precious

metals deposits in other preset of the country yet not investigated in detail.

4.2.2 Non metallic- minerals

Considerable potential also exists for industrial mineral mining development in Ethiopia.
Soda ash is found in sonic lake brines of lakes Abiyata and Shala, in the central main
Ethiopian Rift (Shewa region). Resources of soda ash in these two lakes are sufficiently
enough to support a major mining operation

Potash deposits in Danakil Depression near Dallol have been known since the turn of the
century. A total reserve of 172,897,000 tons of potash has been estimated.

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Other major industrial minerals, which could offer a possibility for development for local
consumption, are Bentonite and diatomite. Sufficient tonnage of quality material for the
filler industry as well as for use in filters and for other specialized industrial requirements
(binders, bricks, insulating materials) is available.

Ceramic raw materials like the Bomba Woha kaolin deposit has been discovered North of
Kibre Mengist in Sidamo region with a proven reserve estimated to be estimated to be
estimated 250,000 tons. Pegmatite's at kenticha have been examined as possible source of
feldspar for use in the ceramic and glass industry. Suitable raw materials for sheet glass
industry such as silca sand, dolomite, feldspar, limestone and soda ash are also in apple
supply.

Parts of the sedimentary basin of ogaden in eastern Ethiopia and some magnetic rock
units in central Wollega, (Bikilal), Balae (Melka Arba): and sidamo regions have been
investigated as a source for a phosphate fertilizer. Sulfur deposits have been mined in the
past between 1955 and 1953 in the Dona areas at Dallol and 20 km north of Dallol.
Deposits of sulfur from fumaroles and solfataras are common in the Danakil Depression.
Reserves of 12.000 m3 of sulfur rich rock materials have been reported for the sulfur field
near the young kbrit Ale nolcano. Semi precious stones peridote and garnet are found in
the pegmatite/ ultramatic complexes of Sidam region. The latter could possibly support
cottage scale industry.

4.2.3 Building (Construction) material

There is no shortage or rock of various types suitable as dimension stones or crushed
aggregate within Ethiopian. Construction materials such as limestone's, gypsum and clays
for cement, basalt and other volcanic rocks and limestone for crushed stone are in ample
supply. Deposits of pure white as well as variegated rose, green and gray marble near
Mend. Wollega, and rose, black and pale colored gramote need Harar are being
developed for use as decorative stones for export and local consumption.

1. Mineral fuels (These are non- Metallic minerals but they serve as energy resources,
coal, petroleum and natural gas etc.

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4.2.4 Hydrocarbons

Lignite, coal and oil shale deposits, 50 km east Jima at places called Delbi and Moye in
Illubabore region, are under investigations. Other occurrences of lignite with in the
intertrappean sediments of the Ethiopian plateau, near Chilga ( Gondar ) Debre Berhan
( Shewa) and Wuchale ( Wello) have been investigated for their calorific value and the
feasibility economic recovery.

Petroleum exploration in the Ogden area induce that there are premising respects for
discovery of hydrocarbons. The Caleb gas field discovered in the Ogden area has 76
billion metric ton. The feasibility of the development of the Caleb gas field is also under
investigations.

4.3 DATA ON MINERALIZATION

Over the past 25 years, the Ethiopian Astute of Geological Surveys has carried our
exploration for metallic and industrial mineral. The results of these studies are available
to investors. Quarter of the surface area of Ethiopia has been geologically mapped, of
which 20% has been geochemically surveyed at 1:250,000 scale. Some of the more
important deposits are:

According to the degree of expatiation, mineral resources of Ethiopia are grouped in to

four. These are:
 Utilized and well studied minerals; this grope includes gold, platinum. Magnates,
common salt, limestone, gypsum, clay feldspars, san, quartz marble, pumice etc.
 Likely available. As supported by geological evidences but inadequately
evaluated mineral resources: such include iron, nickel, sulfur, gemstone, Zinc
barite, graphite, radioactive mineral and asbestos.etc.
 Discovered mineral deposits: These are major reserves that may attain important
roles in mineral production in the near future. These minerals include potash, salt
soda ash, copper and tantalum and natural gas.

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The following data shows the known reserve minerals and under study minerals.

4.4 MINIRAL POTENTIAL OF ETHIOPIA

Metallic mineral Known Reserves

1. Bikila Iron Ore 58,000,000 ton

2. Lege Dembi primary Gold 200 ton
3. Yubdo platinum 12.5 ton
4. Serkole Alluvial Gold 0.1 - 0.7 ton
5. Degero Alluvial Gold 0.7 ton
6. Adola Nickel 17,000,000 ton
7. Kenticha Rare ,metals 25,000 ton

Under Study
8. Melka Arba Iron Ore
9. Tigray primary Gold
10. Tigray alluvial Gold
11. Tsehafi - emba Copper
12. Dull primary Gold and Base metals
1. Abetselo base metal
2. Adole primary Gold (15A,
15B, 15C)
3. A-Ababa primary Gold
B- Melka Rara Metal
4. Moyale Primary Gold
5. Fakusho Molybdenite
6. Chercher Malachite
7. Megado Serdo Primary gold
8. Dawa Dragati primary Gold
9. Godare placer Gold
10. Chamo primary Gold
11. Kobo placer Gold
12. Gordona ( korre) iron ore
13. Ghagu iron ore
14. Adola placer Gold

Non metallic mineral

28. Bwambwa - waka kaolin 300,000 ton
29. Kenticha Feldspar 300,000 ton
30. Abiyata Soda Ash 400,000,000 ton
31. Muger Silica Sand & Gypsum 3,400,000,ton

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 32. Lakes Region diatomite 4.000,000 ton
33. Daleti Marble 50,000,000,ton
34. Muger Limestone & Gypsum 100,000 ton
35. Dire Dawa lime stone 46,000,00 ton
36. Hulakuni Marble 1,434,000 ton
37. Dallol potash and salt 170,000,000 ton

Under study
38. Danakil salt and potash
39. Gewane - Mile Bentonite
40. Hakim - Gar Marble
41. Chembi Kipnito, Talc and crystal
42 shnele limestone and marble
43. Mega Olivine and peridote
44. kombolcah (Harar)kaolin
45. MEkele limestone
B- kenticha quarta and lepidoite
46. MElka Granite
47. Mora Marble
48. Ulaulo Ano talc
49. Dofon Sulpher
50. Baruda Marble
51. Tigray Granite
52. Jema Limestone, Gypsum and silica sand
53. Nazret pumic
54. Soka Asbestos and Gypsum
55. Shebele Graphite
56. Moyal Mica
57. Hagere Selam Granite
19. B. Charcher Marble
Energy Minerals
Known Reserves

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 58 Caluab Gas 76 Billion Metric Cube
59. Langano ( Aluto) Geothermal 30 Mega watt
60. Tendaho Geothermal 30 mega wat
61. Hilal Gas - 35 Billion Mertic Cube

Under study
61A. Dilibi Coal
61B. Moye coal
61C. Dilbi Moye oil shale
62. Chida - Gojeb Coal
63.Korbeti Geothermal
64. Northern lake Abya Geothermal
65. Mush (Debre Birhan )Coal
66. Wuchal lignite
67. Chilga Cola
68. Nejo Lignite
69 Gojeb lignite

Year
Production ( in kilogram )

Gold Tantalum Platinum

1985/86 923 - 2.4
1986/87 643.3 - 1.0
1987/88 728.3 - 1.5
1988/89 745.5 - -
1989/90 848.1 - -
1990/91 3038.0 - -

1991/92 2651.9 14,000 -

1992/93 3403.6 18.00 -
1993/94 2349.3 26.280 -
1994/95 N.A 35,000 -
Source: CSA Ethiopia Statistical abstract 1997, 1998

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The exploration and search for mineral depositions in Ethiopian has long history. At
present the mineral resources of Ethiopia are not fully surveyed and identified. Mineral
prospecting and mapping based on geological structures require a huge capital and skilled
human labor. It seems due to lack of capital, skilled human power and other necessary
conditions, miming in Ethiopia is least developed. Therefore the contribution of mining
to the country's GDP is 4 %.

Ethiopia is a virgin territory as far as mineral exploration is concerned modern minerals

surveys haven started only in the ale 1960's. There is little double that economically
exploitable mineral deposits are to be discovered with relative ease. An example of this is
the open pit primary gold mine at league dumb, established in 1988 and with proven
reserves of 83 tons of gold.

4.5 PROBLEM OR FACTORS AFFECTING EXPLOITATION OF MINERAL

1. The value of the mineral: minerals of thing value such as gold, diamonds copper tin
or uranium can often get priority in the mining process. Because they are more
profitable due to their high value per unit weight
2. Mining Costs: The cost of mining varies from place to place, the type of mining
employed the size and the grade of the grade of the deposit. Ir. means mineral
deposits located close to the earth's surface will volt less for exploitation then mineral
found deep inside the earth. The size and grade of minerals are also determining
factors for mineral exploitation. Usually minerals with small size and full of
impurities are not cost effective. Anyhow some minerals are exploited even if their
deposits are minimum. E.g. Copper.
3. The availability of labor: mining requires skilled labor. Without skilled labor force it
is difficult to operate mining activities.
4. The availability of transport facilities; Mining activities require efficient means of
transportation. Otherwise, it is difficult to transport labor force. Machinery and
mining outputs.
5. Government influences:

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 1. The development of mining activity in a given country requires capital,
infrastructure and policy decision,. These are best affected by the role
government's play.
2. Political stability or political conflict between Ethiopia and east neighboring
countries.
Perspectives
 Currently the legedembi Gold mine is transferred to a private investor. As a result
the volume of production is increasing from year to year to year. At the some time
additional exploration is taking place in the aerie.
 Secondly, foreign investors have taken concession areas in the central western and
northern parts of the country if the exploration results by thee companies or
investors happen to be fissile exploitation may take place. This will create better
employment opportunities and will contribute the economic growth. We can take
a good example for mines exploration agreement signed between the ministry of
mines and energy and British Company named Golden Prospect mining Company
ltd.

4.6 REVIEW OF THE MINING LAW AND ITS APPLICATION

4.6.1 Licensing
Through the promotional activities conducted so far it has been managed to attract a
significant number of mining companies. For instance, over 30 mining companies have
visited Ethiopia during 1994 alone. Three highly explored gold projects have been
granted to three mining companies selected out of 13 applicants, as a result of an
international tender. Other prospecting exploration and mining licenses have been issued
to local and foreign investors, as well. So far , in addition to the addition to the local
participants, eight foreign companies have been granted prospecting, exploration and
mining licensees for gold, platinum group metals, base metals, rare metals and other.
There include Canadian, American. Guyanese, Italian and Saudi Arabian companies.
Furthermore, a Ghanaian and one soothe African major mining companies are operation
in joint venture with others Application of some other local and foreign companies are in
process.

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4.6.2 Mining Legislation
The new Mining law and Mining Income Tax law were issued in June 1993. The Mining
Regulations came intellect in April 1994. The miming proclamation no. 52/1993 and the
minim income tax proclamation No 53/1993 were amended in favor of the investors in
1996. The following are the highlights of the laws.

4.6. 3 Environment

Safety and environment are some of the major issues dealt with in the mining laws
according to the mining proclamation No.52/1993 any person undertaking mineral
operations is required to conduct operations in such manner as to ensure the health and
safety of his agents, employees and other persons and to minimize damage or po out to
the environment.
Furthermore, firm and clear environmental policy has been designed, the main purpose of
the policy, particularly regarding mineral resources, is to
 Safeguard the land its other natural resources,
 Ensure the reclamation and restoration of land , top sill and vegetation after
mining
 Train and provide technical and material assistance to local miners, and to ensure
environmental protection,
 Strengthen the government agency responsible for minim setter so as to enhance
its capacity to regulate and administer environmental protection.

4.6.4 Mining Taxation

Royalty up to 5 % ( precious minerals % , other
(Ad valorent at mine site) Metallic and nom Metallic minerals 3%
Geothermal Deposits and mineral water 2%
Negotiable in some cases)
-income Tax 35%
- State free equity (optional) 2%
- Dividend tax 10%

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Check your progress
1. List the major types of minerals that are currently being exploited.
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
2. What are the major problems of the mining sub-sector?
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………

4.7 DOMESTIC WATER SUPPLY

Water supply is one of the most essential economic infrastructures which usually fall
under the management of the public sector. As a reflection of the overall poor level of
infrastructural developments, coverage of water supply in Ethiopia is still very low.
Existing data indicate that national coverage of potable water supply stood at 26 per cent
by 1992 while coverage of sanitation services is only 7 per cent. Coverage of water
supply shows wide disparity among rural and urban areas, i.e. 18.8 and 76 per cent,
respectively.

Except for some involvement of Non-Governmental Organization (NGOs) in rural water

supply and external loan for that of big urban centers, development and operation of
water supply systems have by and large been undertaken by government, absorbing a
significant sum of capital and recurrent expenditure. Water tariffs have also been
determined centrally and were not revised periodically taking into account changes in the
cost of providing water supply. This has rendered most water supply systems incapable
of recovering their operation costs (let alone their investment cost) which ultimately
hindered timely maintenance and replacement of worn out equipment. The increasing
dependence on government subsidies of water supply systems had thus prevented fast
development of the sector as evidenced by the low level of coverage.

The water supply and Sewerage Authority (WSSA) with a number of sub-regional offices
was the central government organ for the development and management of water supply

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and sewerage systems during the Derg regime. The Water Resources Commission under
which WSSA used to operate is now replaced by the Federal Ministry of Water
Resources entrusted with the power and Mandate of developments in the water sector at
large. Regional governments have their own offices for water resources development
which include management of water supply systems. A water sector policy has recently
been drafted which among others has focused on the partial and gradually full cost
recovery of water supply systems for a sustainable development of the sector. Some of
the regional states have begun implementing this as the budget implications of subsidies
to water systems has become a serious problem.

Another aspect of the strategy for the development of the sector is the enhancement of
community participation, especially for rural water supply where tariffs can not be raised
adequately. Parallel with this, the government widely facilitates and supports the
involvement of domestic and foreign NGOs in the establishment, maintenance, and
rehabilitation of water supply systems in the country.

4.8 POLICIES AND STRATEGIES

The need to develop water resources on a sustainable basis emanates from a number of
reasons including rapid growth of population, the demand for irrigated agriculture to back
and boost rain-fed agriculture, and expansion of industrial and other business activities
which demand more and reliable water supply. Despite such significant role of the water
sector in socio-economic development, there have been no clearly set sectoral policies
and strategies.

As a result of this, there have been duplication of efforts and wasting of resources, lack of
attaining sufficient community participation which forfeited the success and
sustainability of some costly schemes, the lack of sectoral policies also led to urban bias
water supply and sewerage systems at the neglect of rural areas and poor financial system
(including pricing) which stifled maintenance and expansion of water supply systems.

The Letter of Sector Policy (LSP) which is being prepared by the Ministry of Water
Resources against the above sectoral constraints is an outline (draft) of the water sector

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policies that the country envisages to implement. In this regard the LSO has identified
selected areas of intervention by the government to achieve overall development of the
sector.

These include:-
 Establishment of the regulatory framework for the sector,
 Formulation of integrated water supply and sanitation programs;
 Ensuring sustainability and efficiency through rehabilitation and improvement of
the water supply and sanitation infrastructure and operation:
 Construction of new water supply and sanitation in both urban and rural areas
giving due consideration to least cost options:
 Capacity building, including institutional infrastructure and manpower
development of regions and water supply institutions and community
participation particularly of women:

4.9 COVERAGE OF URBAN WATER SUPPLY

Full (100 per cent) urban water supply coverage would mean round the clock availability
of safe drinking water at any place to the user. This is inconceivable to achieve in the
foreseeable future in a developing country like Ethiopia. Due to the lack of the
availability of low cost water supply technology and community awareness to use potable
water, water supply coverage has not been adequate in urban areas and worse in rural
areas.

According to a report by the former WSSA, about 15 per cent of the urban population
(excluding Addis Ababa) had access to adequate water supply by 1992; by adequate it
means getting 35-45 liters (capita) day as per the standards of WHO. Another 50.4 per
cent of the urban population has also access to water supply but has been served below
the standard level. Total coverage excluding Addis Ababa was therefore 65.4 per cent.
Including Addis Ababa, total coverage for urban centers is 76.6 per cent while those
getting adequate water supply, stood at 42.7 per cent (WSSA, 1992).

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The 1994 population and Housing census on the other hand revealed that excluding the
Somali Regional State, 1169.7 thousand residential units get water from piped systems,
protected wells or springs implying a water supply coverage of 83.6 per cent. Though
this figure shows a 7 percentage points increase over the estimates of WSSA, it does not
still tell about the adequacy of the water supply.

Per capita water demand of domestic users varies from town to town based on the type of
connections and the capacity of water supply systems. Users of private connections
(where the tap is connected to the private resident) have higher daily demands than users
of yard connections (where the tap is connected to the yard/compound) which in turn use
more water than public tap users. In the towns of Agaro, Debre Berhan, Awash and
Asebe Tafferi, for instance, daily per-capital water demand was 70 liters for house
connections, 20-30 liters for public tap users. Non domestic users (institutions,
enterprises, etc.) consume some 20 to 55 percent of the the total water supply in these
towns.

Another study for water supply and sewerage project of 11 towns also indicated that
average per capita demand in these towns also indicated that average per capita demand
in these towns was 46, 33 and 23 liters per day for house, yard and public tap users;
respectively while per capita consumption stood at 43, 20 and 4 liters, respectively.
Compared with the minimum standard set by the ministry of water Resources at 60, 35
and 15 liters per capita daily water consumption, most of the towns have only below
standard levels of service.

4.10 WATER TARIFF

Tariff rates for water supply differ based on the type of connections and from region to
region as per the policies of the respective municipalities. However, there is a general
tendency for water tariffs getting cheaper in big towns which have relatively better and
efficient water supply systems than small towns with unreliable and inefficient services.
This has emanated mainly from the urban bias in government budget allocation for the
construction and operation of water supply systems.

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The absence of systematically compiled data on water tariffs makes it difficult to observe
trends in water tariffs during the Derg period and after the reform program. However, a
report by consultants (Ernest & Yong) engaged by the Ministry of Water Resources
provides relatively systematic and up-to-date data for a small sample of settlements
selected from all regions

The Report (by Ernest and Young) indicated that the average price for private
connections was Birr 1.57 per meter cube for a sample of 279 urban centers. Only 8
percent of the sample had average water tariffs below Birr 0.5M 3 while 53per cent of the
sample settlements have rates above 1 Birr.1 The report also revealed that tariff rates of
more than Birr 1/m3 predominated urban settlements with population size below 10,000.
for big towns with population size of 50,000 and over, the mean private tap tariff was
found to be Birr 0.5/m3. This shows that urban water supply for large towns is highly
subsidized as compared to that of small towns. The Report also revealed extreme
variations in private water tariffs among regions ranging from Birr 0.5/m 3 for Somali
regions.

Users of public fountains on the other hand, usually pay higher prices than user of private
connections. Public taps are also predominantly used in small towns where the people
can not afford for private or yard connections. The study by Ernest & young also
revealed that 70 per cent of the sample urban settlements selected for the review of public
tap tariffs (318 towns) were urban centers with population size below 10,000. According
to this report, 39 per cent of the sampled pay less than 1.00 Birr/m 3 while the remaining
61 per cent pay more than 1 Birr/m 3 for public fountains. Of the 61 per cent, some 26 per
cent pay more than 2 Birr/M3. The later rate predominates in samples selected from
Benshangul/Gumuz, Gambela, and Tigray regions. The average public tap tariff for the
whole sample towns was Birr 1.59/m3, which is close to the average private tap tariff.

In areas where the community cannot afford to have private or yard connections and/or
does not have easy access to public fountains, people are forced to purchase water from
private vendors at high prices. The study by Emest & young took 295 urban centers to
review vendor prices and found out that 50 per cent of the sample pay more than 10
1
. The remaining 39 percent of the sample towns have tariffs between Birr 0.50 to Birr 1.00 per meter cube.

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Birr/M3 with the remaining paying less than 10 Birr per M 3. the average vendor price
was Birr 10.4/m3 which is about six times the average private tap tariff rate.

4.10.1 Revision of Water Tariffs

At present, water tariffs do not cover operation and maintenance costs of the existing
systems, let alone financing investment for the expansion and improvement of the
systems. Water supply is therefore budget subsidized which does not seem to be
equitable as those who benefit more from the subsidy are major urban centers and people
with private connections who can afford to play higher prices. Lower private tariffs for
private connections have also encouraged excess consumption of water as compared to
users of public fountains.

Since water supply has a significant import component both for equipment and water
treatment, an upward revision of tariff rates is inevitable to accommodate for the rising
cost of service delivery. To this effect the Government has established basic principles
and guidelines for pricing and cost recovery of urban water supply and sanitation systems
(Basic principles and Guidelines for urban Water Tariff, April 1995). According to this
document, tariff adjustment shall be implemented on the basis of cost pricing taking into
account economic, social and financial objectives of water utilities, its implementation
will, however, take place phase by phase and full cost recovery (urban may be reached
over a long period of time depending on the objective condition of each region.

There were only few instances of tariff revision attempts during the Derg regime and
until the recently launched reform program of the Transitional Government of Ethiopia.
Tariff revisions usually take place when new systems or expansions are implemented and
the revisions are below that recommended by project studies. In 1987.88, 11 towns
(Awass, Yirgalem, Ghion, Mettu, Hagere Hiwot, Debre Zeit, Mojo, Deber Markos,
Kombolcha, Goba and Arbaminch) had implemented tariff revisions, since then, Assela,
Shashemene and Addis Ababa have joined the ranks. Recently, a number pf towns some
regions (e.g. Oromiya) are awaiting upward tariff adjustments approvals while other
tegions are undertaking studies to do the same.

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In Assela and Shashemene, the water tariffs have increased from Birr o.5m 3 to Birr 1/m3,
respectively. The new water tariff for Addis Ababa (as per regulation No. 5/1995) is also
presented in table below.

Tariff Blocks of the Addis Ababa Water Supply and Sewerage Authority
Water Supply(vol.) Sewerage Services
Block Charges/m3 Charges/m3
3
0-15 m bimonthly Birr 0.50 -
3
16-40 m bimonthly Birr 0.75 Birr 0.80
Above 40 m3 Birr 1.50 Birr 0.17
Public Fountain Operators Birr 0.50

The new tariff for Addis Ababa is Progressive one designed to take Advantage of the
economic costs of water consumption especially by the large consumers.

With regard to tariffs for rural water supply, there has not been any clear policy. Users
are charged in some areas while it is free of charge in others. In the latter case, however,
the community actively participates in construction, maintenance and operation of
schemes. Supplying water free of charge has, however, resulted in the unsustainability of
rural water schemes necessitating the introduction of fair tariff rates. A National Rural
Water Supply Tariff Study was thus planned to be launched (under the UNDP 5 th Cycle
Country Program) and provide tariff structure that would allow cover operation and
maintenance costs of rural water schemes. The current status of the report is, however,
not known.

4.11 GOVERNMENT CAPITAL EXPENDITURE ON WATERS SUPPLY

It has been indicated previously that coverage of water supply and the adequacy of
service in the existing systems is at a very low level at national level and even worse in
rural areas. The relatively small and urban biased allocation of investment capital on the
sector is one of the reasons behind the dismal performance of this sector during the Derg
and even after the launching of the economic reform program.

During the period 1980/81 to 1990/91 government capital expenditure on water supply
(urban & rural) claimed only 1.7 per cent of total capital expenditure on average. In the
first half of the 1980s, annual investment on the sector averaged only Birr 50 million

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which improved to about Birr 100.0 million per annum in the second half of the decade.
Though capital expenditure on this sector grew on average by 17 per cent per annum, its
share in total capital expenditure increased only to 2.2 percent in 1990/91.

Public investment on water supply declined sharply in the first two years of the
Transitional Government of Ethiopia, and achieved a strong recovery since 1993/94.
most of the expenditure especially during 1994/95 and 1995/96 was on the rehabilitation
and reconstruction of existing water supply systems damaged during the war or have long
been not serviced/maintained. The government spent about Birr 226.2 and 220.5 million
on water supply projects during 1994/95 and 1995/96, respectively. Though allocation of
capital expenditure in these years was nearly twice the amount during the second half of
the 1980s, its share from total capital expenditure has still been low at about 2.4 per cent
in 1994/94 and 1995/96.

Except for the first half of the 1980s during which capital expenditure on rural water
supply accounted for about half of the sector’s capital expenditure, the second half of the
1980s and the period 1991/92 onwards, witnessed to a disproportionately low allocation
of capital expenditure of rural water supply. On the other hand, about 76 per cent of
government investment on water supply during 1985/86 to 1990/91 went to urban areas
and this figure was nearly 70 per cent for he period 1991/92 to 1995.96.

Government Capital expenditure on Water supply in ‘000Birrs

% age share Percentage share
Fiscal in total capital
Urban Rural
expenditure
year Urban Rural Total
1980/81 7755.9 8782.8 16538.7 46.9 53.1 0.72
1981/82 11908.0 16681.7 28589.7 41.7 58.3 1.08
1982/83 6879.6 20057.7 26937.3 25.5 74.5 0.71
1983/84 45150.5 24877.7 70057.7 26937.3 25.5 2.19
1984/85 35883.4 34484.8 70368.2 51.0 49.0 1.79
1985/86 71802.5 13868.1 85670.6 83.8 16.2 2.07
1986/87 77873.4 8935.8 86809.2 89.7 10.3 2.10
1887/88 77677.3 24069.3 101746.6 76.3 23.7 2.01
1988/89 94288.9 27110.9 121399.8 77.7 22.3 2.05

99
 1989/90 60185.6 25608.3 85793.8 70.2 29.8 1.60
1990/91 79176.9 29134.8 108311.6 73.1 26.9 2.20
1991/92 21223.1 13870.4 35063.5 60.5 39.5 0.8
1992/93 52856.4 6816.0 59672.4 88.6 11.4 1.13
1993/94 43946.3 29794 73740.4 59.6 40.4 1.02
1994/95 170908.7 55304.9 226213.6 75.6 24.4 2.55
1995/96 139506.8 80996.6 220503.4 63.3 36.7 2.33
Source: Ministry of Finance Revenue and Expenditure Accounts

Since the beginning of capital budget implementation by the Regional States in 1993/94,
they have been allocating a sizable share of their expenditure for water supply to rural
areas. In 1993/94 and 1995.96, for instance, 53 and 73 per cent of the regional capital
expenditure (excluding Addis Ababa Administration) in the sector was for rural water
supply. In 1994/95 the share of rural water supply was only 38 per cent. The allocation
to rural water supply at the national level seems to be relatively small partly because of
the inclusion of Federal Government’s expenditure (for urban water supply study &
design projects) and that of Addis Ababa administration both with large investment
outlays in which their emphasis is on urban water supply systems.

Regional and Federal Capital expenditure on Water Supply ‘000Birr

1993/94 1994/95 1995/96
Region Urban Rural Total Urban Rural Total Urban Rural Total
Tigray 1024.6 901.1 1925.7 17666.9 199.2 17866.1 68.1 505.6 573.7
Afar 1567.9 4798.3 6366.2 925.6 9227.1 10152.7 1281.4 403.9 1685.3
Amhara 3367.4 5534 8901.4 246.9 2479.6 2726.5 4616.6 6816.6 11433.2
Oromiya 11818.7 11132.1 22950.8 58291.4 21254.7 7954.1 14496 41793.3 56289.3
Somali 135 2024.4 2159.4 2315.4 3852.8 6168.2 2467.6 5593 8060.6
SNNPR 6683.9 3817.6 10501.5 6263.3 16389.9 22653.2 3440.7 22786.8 26227.5
B /Gumz 762 1467.3 2229.3 136.8 1222.3 1359.1 352.2 593.1 945.3
Gambela 662.7 119.2 781.9 170.2 201.4 371.6 1688.2 1772.5 3460.7
Harari - - 0 5505.9 - 5505.9 2405.2 182.8 2589
A. A. 10485 - 10485 33307.4 - 33307.4 84426.6 - 84426.6
D. Dawa - 29794.0 0 477.9 477.9 - 548 548
Region’s 36507.2 - 66301.3 124829.8 55304.9 180134.7 115242.6 8099.6 196239.2
Total
Federal 7439.1 - 7439.1 46078.9 - 46078.9 - 24264.2
Gov’t
Sector Total 43946.3 24794 73740.4 170908.7 55304.9 226213.6 139506.8 80996.6 220503.4
Source: MoF, Annual Budget Report.
Report.

100
Check your progress
3. How much is potable water coverage in Ethiopia?
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
4. How much is the share of government capital expenditure on water supply to the
government capital expenditure?
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………

4.12 ELECTRICITY ENERGY SUPPLY

4.12.1 Establishment2
The Ethiopia Electric Light and Power Authority (EELPA) which was established in
September 11, 1955 after having undergone restructuring has been reorganized as the
Ethiopian Electric power Corporation (EEPCo) in a7th July, 1997. EEPCo is responsible
for generating, transmitting, distributing and selling of electricity nation wide.

4.12.2 Supply System

Presently the Corporation maintains two different power supply systems; the
Interconnected System (ICS), which is mainly supplied from hydropower plants, and the
Self-Contained System (SCS), which consists of mini-hydropower plants and a number
of isolated diesel generating units that are widely spread over the country.

2
This section is based on information obtained from the Ethiopian Electric Power Corporation
Note: All data contained herein are on the 1993 Ethiopian Fiscal Year- the period from July 8, 2000 to
July 7, 2001.

101
4.12.3 Electrification Status
Number of electrified towns under EEPCo are 462 of which 408 are within the
Interconnected System (ICS) and the remaining 54 within the self-Contained System
(SCS).

Over 13.4% of the population have access to electricity.

PER CAPITA ELECTRIC ENERGY CONSUMPTION

(Kw.h)

23.5 23.13 23.16

23
22.5 22.16 22.31 22.35

22
21.5
1996/97 1997/98 1998/99 1999/2000 2000/01

4.12.3 Manpower

Number of Employee
Employee 96/97 97/98 98/99 99/2000 2000/01
Male 7,133 7,142 7,023 6,859 6,754
Female 1,220 1,219 1,190 1,188 1,193
Total 8,353 8,361 8,213 8,047 7,947

Manpower Distribution by Age Group

2000
1784
1682
1500
1195
1081 1002
1000 860

500
342

0 1
14-18 19-25 26-30 31-35 36-40 41-45 46-50 51-55

102
 128 2
Manpower Distribution by Education
194 538

2281

2441

Read& Write 1-8th Grade 9-12th Grade Diploma/Certificate

2363
1st degree 2nd degree 3rd degree

4.13 GENERATION

4.13.1 Inter Connected System (ICS)

The ICS consists of & hydro, 9 diesel and one geothermal power plants with total
installed capacity of 444.6 MW, 21.5 MW and 7.3 MW respectively. However, due to
aging of the plants the dependable total capacity is only 456.4 MW. Over 98% of the total
generation in the country comes from the ICS.

4.13.2 Self Contained System (SCS)

The SCS consists of three small hydro and several diesel power plants. Generation in this
system is mainly by diesel power plants having an aggregate capacity of 13.84 MW. The
contribution from the small hydropower plants is only 6.15 MW.

103
 ICS Generation Installed Capacity (MW)
Plant Name Hydro Diesel Geothermal Total Com. yr
Koka 43.2 - - 43.2 1960
Awash II 32.0 - - 32.0 1966
Awash III 32.0 - - 32.0 1971
Finchaa 100.0 - - 100.0 1973
MelkaWakana 153.0 - - 153.0 1988
Tis Abay I 11.4 - - 11.4 1964
Tis Abay II 73 73 2001
Aluto Langano - - 7.3 7.3 1999

Sub Total 444.6 - 7.3 451.9

Alemaya - 2.3 - 2.3 1958
Dire Dawa - 4.5 - 4.5 1965
Adigrat - 2.4 - 2.4 1992,93,95
Axum - 1.3 - 1.3 1975,92
Adwa - 3.0 - 3.0 1998
Mekele - 3.3 - 3.3 1984,91,93
Shire - 1.3 - 1.3 1975,91,95
Nekemt - 2.3 - 2.3 1984
Ghimbi - 1.1 - 1.1 1962,84
Sub total 444.6 21.5 7.3 21.5
Grand Total 444.6 21.5 7.3 473.4

SCS Generation Installed capacity (MW)

Plant Name Hydro Diesel Total Comyr G.C
Yadot 0.35 - 0.35 1991
Sor 5.00 - 5.00 1992
Dembi 0.80 - 0.80 1994
Sub total 6.15 - 6.15
Dubti - 1.00 1.00 1991,92,95
Bonga - 1.32 1.32 1972,74,76,94,98
Assyita - 0.94 0.94 1970,71,88,95
Negele Borena - 0.87 0.87 1975,84
Asosa - 0.84 0.84 1991,94,95,98
Others - 8.87 8.87 ’67-‘98
Sub Total - 13.84 13.84
Grand Total 6.15 13.84 19.99

104
Energy Production of Hydro and geothermal power Plants
Plant Name Production Plant Peak
(Mwh) (MW)
Koka 79,638 33.00
Awash II 116,765 32.00
Awash III 133,055 32.00
Finchaa 812,419 105.00
Melka Wakana 436,294 153,00
Tis Abay I 42,962 12.30
Tis Abay II 153,184 72,31
Aluto Langano 5,074 1.98
Sor 12,582 3.20
Yadot 913 0.22
Dembi 2,017 0.68
Grand Total 1,789,823 352.31*
*) This is ICS suppressed Peak load and it does not reflect the true value.

Share Of Energy

Awash III , 7% Koka,Tis

4%Abbay, 2%
Awash II, 7% Melka Wakena, 25%

Tis Abbay II, 9%

Aluto Langano, 0%

Fincha, 46%

Energy Production by System & Source (GWh)

System/source 96/97 97/98 98/99 99/2000 2000/01
ICS
Hydro 1552.2 1564.6 1592.1 1631.5 1774.3
Diesel 0.1 0.3 0.9 4.0 2.1
Geothermal - - 26.3 20.0 5.1
Total 1552.3 1564.9 1619.3 1655.5 1781.5
SCS
Hydro 14.1 14.9 14.1 14.3 15.5
Diesel 47.8 48.4 19.7 19.0 14.8
Total 61.9 63.3 33.8 33.3 30.3
ICS+SCS
Hydro 1566.3 1579.5 1606.2 1645.8 1789.8
Diesel 47.9 48.7 20.6 23.0 16.9
Geothermal - - 26.3 20.0 5.1
Total 1614.2 1628.2 1653.1 1688.8 1811.8

105
 Share of Energy by System

SCS
2%

ICS
98%

Share of Energy by Source

Geothermal
1%

Hydro
99%

2000
1812
1614 1628 1653 1689
1500 1393 1359 1332 1376 1413

1000

500 321 399

291 269 313
0
96/97 97/98 98/99 99/2000 2000/01

Generation Sales Loss

4.14 TRANSMISSION

4.14.1 Transmission System

The high voltage network consists of both 230 kV sub-transmission voltages, 230 kV and
132 kV trans-mission voltages. Presently there are 6, 304.22 kms of lines in service.

106
Supply of the distribution network is provided by step down substations connected to the
respective transmission and sub-station voltages. Common winding arrangements include
45/15 kV, 66/15 kV and 132/66/15 kV. In total there are 103 transmission substations and
substation in hydro power stations supplying the distribution system.

Existing Lines and Substations

Voltage Level T/L (Km) S/S (Ea)

230 kV, 1,572.19 10
132 kV, 2,514.05 44
66 kV, 1,742.05 26
45 kV, 475.93 23
Total** 6,304.22 103
** The total figure includes 3 substations and lines of 245. 3 km from SCS
and 8 substations in hydro power stations.

ICS Peak Demand (MW)

1996/97 294.5
1997/98 317.8
1998/99 318.43
1999/2000 327.7
2000/01 352.31

260 280 300 320 340 360

4.15 DISTRIBUTION

4.15.1 Distribution System

Power distribution in both ICS and SCS is effected at primary voltage of 15 kV,
consisting entirely of 3- phases, 3- wire feeders, and is stepped down to a utilization
voltage of 380/220 V (3-phase , 3-wire ) using 3- phase transformers..

The distribution system consists of 9, 512. 91 km of 15 k V lines , 6961 distribution

transformers and 8, 145.76 km of 380/ 220 V lines /including extension of high & low
tension lines, and erection of transformers by consumers are 1992 efy /. At present
625,496 customers are connected in both the ICS and SCS.

107
 Number of Customers (ICS)
Tariff Category 96/97 97/98 98/99 99/2000 2000/01
Domestic 413958 439661 460067 487441 511788
Commercial 64903 71124 71386 73164 75793
Street Light 729 788 819 866 917
LV Large Industry 8284 7894 7652 7722 7916
HV Large Industry 88 94 94 87 91
Boiler - - - - -
Own consumption 286 293 297 370 386
Total 488248 519854 54315 569650 596891

Number of Customers (SCS)

Tariff Category 96/97 97/98 98/99 99/2000 2000/01
Domestic 37700 24680 26458 20966 22318
Commercial 9031 6869 7233 5735 6001
Street Light 77 61 62 52 53
Lv Large Industry 520 297 304 204 205
HV Large Industry 1 2 2 2 3
Boiler - - - - -
Own consumption 29 27 32 28 25
Total 47358 31936 34091 26987 28605

Number of Customers (ICS + SCS)

Tariff Category 96/97 97/98 98/99 99/2000 2000/01
Domestic 451658 464341 486525 508407 534106
Commercial 73934 77993 78619 78899 81794
Street Light 806 849 881 918 970
LV Large Industry 8804 8191 7956 7926 8121
HV Large Industry 89 96 96 89 94
Boiler - - - - -
Own Consumption 315 320 329 398 411
Total 535606 551790 574406 596637 625496
Number of Customers by System

5%

95%

ICS SCS

108
Check Your Progress

5. What the two types of connection systems and their relative share?
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………

4.16 SUMMARY

At present the mineral resources of Ethiopia are not fully surveyed and identified.
Nevertheless, it is believed that the country has good potential. Gold, platinum, salt,
tantalum and constructions materials such as rocks, limestone’s, gypsum and clays, and
other volcanic rocks are under utilization. Production costs, availability of skilled labor,
availability of transport facilities, lack of stability and lack of appropriate policies
hindered the development of the mining sub-sector.

Potable water supply is essential infrastructure. However, lack of pure potable water is
one of the reasons for poor health is Ethiopia. Only about 26% of the population has
access to potable water supply; the remaining 74% uses rivers and springs for drinking
water. Even urban coverage is well below 100% (76%); the rural coverage is only 18.8%.
Electricity production is another essential infrastructure. Currently there are two different
power supply systems: the interconnected system (ICS), which is mainly supplied from
hydropower plants, and the self-contained system (SCS), which consists of mini-hydro
plants and a number of isolated diesel generating units that are widely spread over the
country.

109
4.17 ANSWERS TO CHECK YOUR PROGRESS EXERCISES

1. Gold, platinum, salt, tantalum and building materials.

2. High costs of production un availability of skilled labor force, poor transport
facilities.
3. About 26% at national level; 18.8 for rural areas and 76% for urban areas.
4. Less than 3%
5. Interconnected system (ICS), which accounts for 98% of the total generation in
the country and self contained system (SCS), which accounts for the remaining
2%.

110