Adama I and Adama II Wind Power Projects
Name: Adama I and Adama II Wind Power Projects
Chinese Name: 阿达玛风电一期、二期项目
Location: Adama Town, Oromia Regional State, Ethiopia.
Type of Project: Energy
Project Developers: Ethiopia Electric Power and Ministry of Water, Irrigation and Energy.
Main Contractors: HydroChina-CGCOC-JV, a joint venture between HydroChina Corporation, a subsidiary of the Power Construction Corporation of China (PowerChina), and China Geoengineering Corporation Overseas Construction Group (CGCOC Group).
Financier: For both Adama I and Adama II, financing was concessional loans through the Export–Import Bank of China. These loans covered 85% of the costs, with the remaining 15% covered by the Government of Ethiopia.
Cost: Adama I, 118 million USD; Adama II, 345 million USD.
Project Status: Operational.
The Ethiopian Government has long identified the lack of modern energy infrastructure as one of the constraints on the country’s growth and socioeconomic transformation. The development of wind energy as part of the Climate-Resilient Green Economy—a strategy to promote environmentally friendly economic development—has always been part of the Ethiopian Government’s plan, especially under the administration of Meles Zenawi (in office from 1995 to 2012). This resulted in the Ethiopian authorities approaching China, seeking assistance to develop wind energy.
After a series of negotiations, in 2009, the Ethiopia Electric Power Corporation (EEP, now Ethiopia Electric Power and Ethiopia Electric Utility) awarded an engineering, procurement, and construction (EPC) contract with a total project cost of 118 million USD to a joint venture between HydroChina Corporation and CGCOC Group to develop the Adama I wind farm. The Export–Import Bank of China (China Eximbank) covered 85% of the project’s cost, with the remainder coming from the Government of Ethiopia. The Chinese Xinjiang Goldwind Science & Technology Company (known as Goldwind) was subcontracted to supply 34 of its 1.5-MW direct-drive wind turbines. Construction started in 2011 and the wind farm became operational in 2012, adding 51 MW to Ethiopia’s national grid.
In 2012, the Ethiopian Government, through EEP, awarded yet another EPC contract to the HydroChina–CGCOC Group joint venture to design, engineer, and construct Adama II, with a total project cost of 345 million USD. As with Adama I, the new project saw 85% of its financing covered by China Eximbank, with the remaining 15% from the Government of Ethiopia. Another Chinese enterprise, SANY Renewable Energy (a subsidiary of SANY Group), supplied 102 of its 1.5 MW SE7715 wind turbines. Construction started in 2013, and the project became operational in 2015.
There are several factors that might have contributed to the Ethiopian Government developing these wind farms. First, development of modern energy infrastructure is required to increase electricity access for ordinary Ethiopians. Wind energy can complement the volatility of hydropower during the country’s dry season. In addition, given the industrialisation drive launched by the Ethiopian Government, provision of cheap energy to industry is instrumental to attracting investors in the manufacturing sector, as evidenced by the recent establishment of several industrial zones such as the Eastern Industrial Park and Hawassa Industrial Park.
For the Chinese Government, developing these wind farms helps cement relations with Ethiopia and promotes the internationalisation of Chinese corporations. The projects were used as examples of Africa–China cooperation in clean energy development at the 2015 Forum on China–Africa Cooperation (FOCAC) summit in Johannesburg, South Africa.
- Employment: The development of the Adama wind farms generated local employment. Based on the author’s field research, during the construction period, Adama I had a total workforce of 1,100, of whom 800 were Ethiopian and 300 were Chinese. Adama II had a total workforce of 1,480, of whom 1,200 were Ethiopian and 280 were expatriate Chinese. No precise figures are available regarding the workforce involved in the operation of the two farms.
- Land Issues: The two wind farms are in the Oromia region, an area where there were existing tensions with the federal government over land displacement. The development of Adama I and II impacted 1,327 farmers when 145 hectares of their farmland was taken to create space for the wind turbine foundations and access roads.
- Impact on the Local Community: The development of the Adama wind farms has been celebrated by both Chinese and Ethiopian officials as a fundamental contribution to rural economic development through employment creation and infrastructure improvement, particularly in the surrounding villages of Mukiye, Bubisa, Qachema, Kobolito, Sere-robi, Jogo Gudedo, Tede-dildima, and Mele-mele.
- Technical Skills, Knowledge, and Technology Transfer: The EPC plus financing contracts used to deliver the two projects limited the technology transfer from China to Ethiopia, as is typical with this model of contracting. However, technical skills and knowledge were transferred from the Chinese contractors to local engineers and technicians. Fifty-five EEP engineers and technicians—25 for Adama I and 30 for Adama II—were trained in China and onsite during construction.
The employment practices of Chinese corporations are one of the most hotly debated topics in Africa–China relations. Chinese employers are often accused of not employing local workers, preferring to import their workforce from China. Field interviews conducted by the author between 2017 and 2018 suggested the contractors hired only local employees, most of whom were unskilled workers from the Adama area, in consultation with EEP. For these two projects, Ethiopian workers dominated the low-end manual jobs, but technical and management-related positions were largely held by Chinese nationals. According to the author’s field interviews with Ethiopian engineers who worked at the wind farms, local engineers were unhappy about the disparity between the salaries of Chinese and Ethiopian engineers even when they were doing the same work.
Field investigations by the author established that there were tensions around compensation for some of the farmers whose land was taken for these projects. While all land belongs to the state in Ethiopia, farmers have user rights. This means the state can expropriate land with compensation for infrastructure projects deemed of national importance. Although the Ethiopian Government compensated the farmers, the majority were unhappy with the land-valuation process and the compensation rate, which was lower than what the farmers would earn in one good farming season. This resulted in some farmers blocking construction sites demanding compensation, delaying the project’s schedule by several weeks. However, as one of the farmers told the author: ‘We were not “powerful” enough to take the government head-on.’
The development of these two wind farms had positive impacts on local community development. Information obtained by the author from EEP officials shows that in the case of Adama I, about 16 kilometres of roads were rehabilitated, while 65 kilometres of new roads were constructed. While a significant number of these roads were used for accessing the wind turbines, the new roads have also connected villages, making commuting more efficient and remote places accessible. In addition, the author’s fieldwork found that the construction and rehabilitation of roads indirectly benefited tricycle (Bajaj) drivers by creating new routes between communities on which they could provide taxi services.
One of the central objectives of the Ethiopian Government in approaching the Chinese stakeholders was to build the capacity of Ethiopian engineers and technicians to develop their own wind farms without depending on external technical assistance. However, the Adama wind farms were developed using concessional loans from the Chinese Government under an EPC model. By agreeing on an EPC project delivery model, the Ethiopian Government was aware that Chinese enterprises would undertake the design and EPC. The technology was therefore to be supplied as finished goods from China, limiting the prospect of technology transfers to local industry. Nonetheless, as the author’s fieldwork found, 55 engineers and technicians from EEP were trained on these two projects.
In interviews with the author, some Ethiopian Government officials stated there was limited transfer of skills and knowledge, as they believed the Chinese engineers and technicians were protecting the technology design and their companies’ intellectual property rights. However, some Chinese engineers interviewed by the author argued that there were language barriers that limited communication, thereby affecting the full realisation of skills and knowledge transfer.
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Chiyemura, Frangton. 2020. Contextualizing African agency in Ethiopia–China engagement in wind energy infrastructure financing and development. IKD Working Paper No. 88. Milton Keynes, UK: The Open University. Link.
Chiyemura, Frangton. 2021. ‘Chinese Firms—and African Labor—Are Building Africa’s Infrastructure.’ The Washington Post, 2 April. Link.
Pombo Van-zyl, Nicolette. 2015. ‘153MW Adama Wind Farm Grows Ethiopia’s Renewable Energy Plan.’ ESI Africa, 29 June. Link.