Erer Dam & Irrigation Development Project Summary
Project Overview
Location: Eastern Ethiopia (Erer and Sofi woredas of Harari State to Babile woreda of Oromia State)
Purpose: To irrigate approximately 4,000 hectares of land using water from the Erer River
Components: Dam construction, irrigation canals, drainage systems, and associated infrastructure
Report Date: May 2009 (Final Detailed Design Report)
Project Components
Volumes and Annexes:
- Volume I: Dam & Appurtenant Structure
- Volume II: Irrigation & Drainage
- Volume III: Project Worth Analysis (this document)
Financial Analysis
Key Metrics:
| Indicator | Base Case | With 10% Cost Increase | With 10% Price Decrease |
|---|---|---|---|
| B/C Ratio | 1.43 | 1.31 | 1.25 |
| NPV (MBirr) | 210.72 | 164.29 | 121.74 |
| IRR | 10.74% | 9.87% | 9.45% |
Economic Analysis
Key Metrics:
| Indicator | Base Case | With 10% Cost Increase |
|---|---|---|
| B/C Ratio | 1.43 | 1.31 |
| NPV (MBirr) | 125.17 | 98.72 |
| IRR | 14.02% | 13.03% |
Project Costs
Capital Costs (in MBirr):
- General Items: 2.3
- Dam Construction: 324.0
- Irrigation System: 90.1
- Project Buildings: 15.1
- Total Capital Cost: 431.5
Annual Operation & Maintenance Costs:
Estimated at 10.4 MBirr annually (2.5% of dam/irrigation costs + 0.5% of building costs)
Project Benefits
Agricultural Production:
Proposed crops include maize, sorghum, rice, groundnuts, alfalfa, haricot beans, vegetables, sugarcane, fruits, sweet potatoes, tomatoes, and potatoes.
Other Benefits:
- Increased food production and self-sufficiency
- Employment generation
- Income improvement for local communities
Conclusion
The project is technically feasible, financially viable (with FIRR of 10.74%), and economically beneficial (with EIRR of 14.02%). Sensitivity tests show the project remains viable under various scenarios. The report recommends implementation to benefit the local community and improve food security.