It was announced recently that the Ethiopian Electric Power Corporation, EEPCo, has split into two independent entities.

Ethiopia made official the split into two independent entities of the state utility Ethiopian Electric Power Corporation (EEPCo).

The Ethiopian Electric Power and Ethiopian Electric Services are both operational, with Ethiopian Electric Power being tasked to undertake and oversee the country’s power projects including the mega hydroelectric dams and transmission lines.  The company is headed by Azeb Asnake as CEO.  He was previously project manager of Gibe III, the 1,870 MW hydroelectric dam project currently under construction and due to be commissioned in September 2014.

Ethiopian Electric Services will be managed by a consortium of three Indian companies with Power Grid Corporation of India spearheading the management, alongside Bombay Suburban Electric Supply (BSES) and National Hydroelectric Power Corporation (NHPC).  The company will be responsible for operations, distribution and sales of electric power led by its new Indian CEO V.K. Khare.

The management contract, worth $21 million, is in place for two years with a possibility of a six-month extension.  According to economy and finance cluster coordinator with the rank of Deputy Prime Minister, Dr. Debretsion Gebremichael, who will serve as board chairman of the two companies, it was an international bid in which five companies participated despite a government invitation to over 20 international companies in Europe, Asia and U.S.

“We wanted an international company with proven experience to modernize the service delivery and undertake the country’s ever expansive activities in the power sector,” the minister explained.

Payment is on a performance basis and objective results will be reviewed every three months with the possibility of termination should performance fall below 60 percent.  The company’s performance will be reviewed on the basis of financial success, customer satisfaction, operational efficiency and capacity building activities.

The top management is made of 22 individuals, out of which five are Ethiopians and the rest Indians. Ethiopians expect to fully take over the management after the expiry of the contract.

Recruitment of middle level management also begun with 4 100 new jobs having been created. EEPCo had 13 372 employees and the two new companies between them will need 17 484.

EEPCO was established 16 years ago with Miheret Debebe serving the corporation as its CEO. According to a report by the Ethiopian Radio and Television Agency, his absence from the management of the new companies came as a surprise for some.

However, Dr. Debretsion defended the Board’s decision to remove Miheret from his position and instead opting to appoint Azeb as CEO of Ethiopian Electric Power.

“Although the board has the power to appoint the top managers, we instead consulted with employees of EEPCO,” Dr. Debretsion said.  “They are happy with our decision to remove the old management and have welcomed the new appointees.”

According to the minister, education background, experience, leadership capacity and employee acceptance were used as a criteria to appoint the new management.

“As you know, Azeb proved her capabilities leading a challenging and complicated project of Gibe III, which is now nearing completion,” Dr. Debretsion said.