- The two leaders are getting closer by finalising the agreement on electrical exportation.
- The decision highlights the significance of the Abiy’s GERD project that has been in development since 2012.
- The completion of this deal will see improved integration in the region and an economic boost for both parties.
Why is Abiy in Camaraderie with Kenyatta?
Answer: Abiy and Kenyatta have agreed to expedite a hydropower deal that has been in development since 2012.
In early February, Kenyan representatives announced the signing of a new deal to renew and scale up the purchase of Ethiopian hydro-processed power from Addis Ababa, after talks held in Nairobi at the start of the month.
The Ethiopian Foreign Ministry has reported the deal will help realise both nations’ aspirations for regional integration. It entails the purchase of 400 megawatts and regional interconnective systems from Ethiopia for $1.3bn, increasing Kenya’s power output by approximately 15% and spurring economic growth for both countries.
This growth is facilitated by the positive relations enjoyed by the two. Kenya and Ethiopia have shared a close relationship for as long as Kenya has been independent, with Abiy and Kenyatta both working to strengthen this bond in recent years. In 2018, a binational commission was created between the two, the highest cooperative status Kenya shares with any nation, reinforcing the strong ties between the two.
The two leaders have also met to discuss transport and infrastructure, particularly on the Lamu Port and Lamu-Southern Sudan-Ethiopia Transport Corridor (LAPSSET,) as well as military cooperation, pledging to cooperate against cross border terrorism and instability in the region.
Whilst Kenya and Ethiopia do enjoy these close relations, there are, as always, nuances to consider. Despite both nations’ membership of the Intergovernmental Authority on Development (IGAD) bloc, trade between the two is generally criticised as unidirectional, with Ethiopian exports to Kenya in 2020 at $12m versus Kenya’s exports to Ethiopia at over $70m. Equally, Kenyatta has been very vocal about his desire for the end of the Tigray conflict, a threat to security that mars relations between the leaders.
Overall, the two enjoy healthy diplomacy, and the expedition of this power deal contributes to their developing integration and camaraderie.
What does Abiy want?
Answer: This agreement is a good sign for Abiy’s passion project and will aid in Ethiopia’s rapid development.
This deal speaks to the wider success of one of the Ethiopian administration’s key priorities: the Grand Ethiopian Renaissance Dam (GERD). The $4.5billion dollar hydroelectric dam has been centre stage during Abiy’s time in office and began producing energy in February. For Abiy, the goals of this power deal with Kenya and the goals of the dam are one and the same, securing the economic benefits of exporting electricity.
Driving Abiy is the motivation to see the GERD project completed and reap the economic and political benefits it has promised. The goals of this project are ambitious; providing power to the 60% of Ethiopians currently without and producing $1billion a year from exported electricity is not simple. However, the expedition of this deal with Kenya is certainly a significant step for Abiy, who will see this as a victory for a career-defining infrastructure project.
The dam has not been without its impediments; there has been significant international opposition to its construction. Both Egypt and Sudan have expressed the issues they have with the GERD, namely that it exacerbates pre-existing issues of water scarcity in Egypt, and that it limits both countries’ water security. Various rounds of mediation between the countries have ended in deadlock, with no tangible progress made.
Abiy, who has proceeded with the dam, has prioritised domestic development over multilateral cooperation and will likely proceed this way despite the diplomatic impact. This agreement will be for the Prime Minister, not only an important first step in meeting the dam’s goals but simultaneously a way of buying influence from other African nations.
What does Kenyatta want?
Answer: Kenyatta is pursuing the modernisation of Kenya and increased foreign investment.
Motivating Kenyatta is his desire for strengthened Kenya, one with an image of modernisation, stability and prosperity so as to attract international investment and influence.
As much is enshrined in the goals of KenyaVision 2030, an initiative started in 2008 that promotes Kenya’s transition into an industrialising, middle-income economy. Since then, Kenyatta has had an active role in the initiative, iterating the importance of ‘the big four’: Food security, housing, manufacturing and access to healthcare. The boost in electrical output promised by this deal will be intrinsic to fulfilling these goals, and underlie his motivations.
As for his position in the region, the President is being driven by his need to define Kenya as a prosperous opportunity for foreign investment. Kenya, (and to an extent Ethiopia) is terribly affected by drought, with 1.4 million livestock dead after the most recent rainy season. Kenyatta then will be trying to balance the needs of his population, whilst simultaneously advocating the region as accommodating to foreign investors.
President Kenyatta is motivated by the desire for his country to prosper domestically, targeting the damage done by drought and poverty, and internationally, portraying Kenya as a lucrative opportunity for investment. The President will welcome an increase in power output as a means to help him achieve these goals.
What is Abiy doing?
Answer: Abiy is committing to energy policy and to getting Ethiopians on the grid.
This power deal for Abiy is more than a simple economic boost for his people, in many ways it represents the potential of the GERD, and successful energy policy is one of the dominating aims of the Prime Minister’s leadership. The GERD is not only a passion project for Abiy but for Ethiopians as well, who bought bonds to fund the construction of this monument to national pride.
In recent years, he has pushed for further development of Ethiopia’s electrical output, and not just with this dam. In 2020 Ethiopia purchased an $800million geothermal plant. Equally, the state-owned national electric producer- Ethiopia Electric Power (EEP), has recently hired two foreign firms to develop national power control centres that will contribute to Abiy’s overarching goal of getting power to those without.
This progress is significant but dwarfed by the promised output of the GERD, which when fully realised could increase Ethiopia’s capacity to more than double at 6450 MW, making Ethiopia the biggest energy provider in Africa. This promises advantages for Abiy, both economically and in terms of influence. The push for other energy policy actions, like this deal with Kenya and the aforementioned power plants, is likely a subsidiary to the filling of the GERD, (which had its second filling stage in the 2021 rainy season) as their development is far less susceptible to political contention.
The Prime Minister is pursuing the progress of his newly inaugurated dam and other energy policies as a means to achieve the central goals of his administration: power for Ethiopia, in every sense of the word.
What does this mean for you?
Answer: An empowered Horn of Africa shifts dynamics both on the continent and further abroad.
The power deal between these nations represents significant potential for Ethiopia’s international position in the future, but it is not without its obstacles. Abiy has already said he wishes to export electricity to Europe, however agreements with Egypt and Sudan on the filling rate of the dam must first be made before that is feasible. EU representatives have met with Egypt’s President el-Sisi to encourage an agreement that they describe as ‘inevitable’, and with Egypt looking to connect better with Europe, there is a chance El-Sisi will be more cooperative if the EU mediates.
The Sudanese government, however, has been firm in denouncing the dam’s inauguration as a breach of legal obligations by Ethiopia. Abiy needs a resolution with these countries if Ethiopia is to step up its influence as both an interconnector and provider in Africa, as well as a player on the global stage.
Similarly, the conflict in the Tigray region continues with neither side willing to reconcile, hindering Abiy’s progress. The US currently has sanctions on Ethiopia and has excluded the nation from the African Growth and Opportunity Act (AGOA) in response to the conflict, measures that will stay in place until some sort of peace is restored. Abiy will have to make some sort of concession if he wishes to achieve his domestic goals, something that should not be so difficult for a Nobel Peace Prize winner.
In short, if the Prime Minister succeeds in filling the GERD, brokering peace in Tigray and multilateral agreements with his neighbours, Ethiopia could step up as an African powerhouse, in more ways than one.
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