Sudanese president Omar al-Bashir is reported to have told Ethiopia's ambassador in Khartoum that Sudan now supports Ethiopia's controversial 6,000MW Millennium Dam project. Although the African Development Bank and World Bank have backed away from financing the dam because of its environmental and social impacts, the Ethiopian government is pressing ahead, with around 15% already completed.
Relations with post-Mubarak Egypt have improved but further spats are to be expected. Egypt receives 95% of its water from the Nile and is hypersensitive about the use of the river's water.
Not content with this massive hydropower investment, Ethiopia is also pursuing a wind strategy. This feeds into a modern decentralised distribution system, which avoids transmitting power over long distances to stranded populations and instead builds smaller generation capacity closer to those who need it. Wind power, uniquely scalable, fits the bill.
Two projects are underway, one operated by the Chinese and the other by a Spanish company. The Adama wind farm of 34 turbines, producing around 50MW, is funded at 85% through the Chinese Exim Bank, with the rest through the Ethiopian government; Hydro China and the China Grains and Oil Group Corporation operate in tandem.
The wind farm should be ready in the middle of 2012. The larger Ashegoda project, in Tigray state, is being put together by Vigo, and will deliver 120MW by the end of 2013.
With Tullow striking oil across the border with Turkana, Ethiopia's energy prospects have become brighter still. It is thought that the South Omo blocks north of the Kenyan border share the same petroleum system, giving a boost to explorers such as Africa Oil and Agriterra, as well as domestic investors, including magnate Mohammed Al-Amoudi.
By Honoré Banda/ The Africa report