* $4 bln Grand Renaissance dam been hit by delays
* Minister says it should be fully operational in 2022
* Initial production to begin at end of 2020
* Project has caused problems with Egypt (Adds details on new contract, background)
By Aaron Maasho
ADDIS ABABA, Jan 3 (Reuters) - Ethiopia’s $4 billion dam project on the River Nile, which has been beset by construction delays and criticism from Egypt, will start initial operations in December 2020, the water and energy minister said on Thursday.
The planned 6,000-megawatt Grand Renaissance Dam is the centrepiece of Ethiopia’s bid to become Africa’s biggest power exporter, but until this week progress had been unclear after Prime Minister Abiy Ahmed last August cancelled a state-run conglomerate’s contract to build the turbines.
State media reported on Wednesday that the government had signed an agreement with GE Hydro France, a unit of GE Renewables, to accelerate the completion of the dam, and water and energy minister Seleshi Bekele said on Thursday the project was on track to open in two years’ time.
“750 megawatts is the planned initial production with two turbines,” Seleshi told parliament. The government expected the dam to be fully operational by the end of 2022, he said.
The project has caused problems with Egypt, which fears the dam will restrict Nile River waters coming down from Ethiopia’s highlands, through the deserts of Sudan, to Egyptian fields and reservoirs.
Ethiopia disputes that and in November Abiy was quoted by Egyptian state media as saying he wanted to preserve Egypt’s Nile rights.
When Abiy cancelled the contract of Ethiopian military conglomerate Metals and Engineering Corporation (METEC) in August, he said not a single turbine was operational more than seven years after the government awarded the contract. Dozens of senior officials from METEC, including its head, have been arrested in a corruption crackdown launched by the reformist leader who took office last year.
METEC had only completed 23 percent of the work, Seleshi said on Thursday.
There have been other construction delays.
“Purchased generators, turbines and other equipment are scattered in ports and other places, meaning more costs,” Seleshi said.
GE Hydro France will be paid nearly 54 million euros ($61 million) to manufacture, fix and test turbine generators, state media said.
$1 = 0.8818 euros Reporting by Aaron Maasho; Writing by Maggie Fick; Editing by Alexandra Zavis/Mark Potter/Susan Fenton