Grand Ethiopian Renaissance Dam: A Global CGE Model to Assess the Economic Effects on the Ethiopian Economy

Emanuele Ferrari, Scott McDonald and Rehab Osman

No 332370, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: The Grand Ethiopian Renaissance DAM (GERD) will become the largest dam and hydroelectric scheme in Africa; it is also one of the world’s most controversial dam projects and one of four large scale hydropower projects currently under construction in Ethiopia. Ethiopia’s endowment of water resources, with its 12 major river basins, is impressive but its potential to exploit is scarcely developed (AQUASTAT, 2005). It is estimated that over 85% of the Nile waters and sediment reaching Egypt originate from the Ethiopian highlands. Nevertheless the 1959 Nile Waters Treaty, between Egypt and Sudan, allocated well over 95% of the estimated available Nile waters to Egypt (75%) and Sudan (25%) thereby leaving very little to the other 8 states in the Nile basin. This study uses a variant of the GLOBE_EN, extended by segmenting the electricity generating sector between hydro and fossil fuel powered electricity generating sections in Ethiopia, Egypt and Rest of Eastern Africa (that includes Sudan). The simulations are conducted using the recursive dynamic variant of the GLOBE_EN model. Preliminary results indicate that GERD investments would slow down development in Ethiopia and that the exports of hydroelectricity need to expand rapidly straight after the completion of GERD if the project is to be successful.

Keywords: Research Methods/ Statistical Methods; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 13
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332370

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