Mysterious Lake Threatens Ethiopian Sugar Ambitions

Photographer: De Agostini/Getty Images

Should salt waters contaminate the Awash River, they would risk Ethiopia’s oldest state-owned sugar estate and an India-funded project downstream that’s key to the government’s $5 billion plan to turn the country into a top sugar exporter. Close

Should salt waters contaminate the Awash River, they would risk Ethiopia’s oldest... Read More

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Photographer: De Agostini/Getty Images

Should salt waters contaminate the Awash River, they would risk Ethiopia’s oldest state-owned sugar estate and an India-funded project downstream that’s key to the government’s $5 billion plan to turn the country into a top sugar exporter.

April 24 (Bloomberg) -- A saline lake in Ethiopia that’s baffled scientists by its 15-fold growth threatens to spill into the nation’s longest river and damage plans by Africa’s biggest coffee grower to become a commodities powerhouse.

Lake Beseka in the Rift Valley has grown to its largest size ever amid irrigation runoff and seismic shifts in past years. Should salt waters contaminate the Awash River, they would risk Ethiopia’s oldest state-owned sugar estate and an India-funded project downstream that’s key to the government’s $5 billion plan to turn the country into a top sugar exporter.

“The fear is for the river,” Water and Energy Ministry groundwater chief Tesfaye Tadesse said. “If it discharges by itself without any control, the river is going to be contaminated forever.”

River basins including the Blue Nile and rugged highlands bless Ethiopia with plentiful hydropower and the continent’s second-largest water resources. The government is counting on Indian financing, a Saudi billionaire and Chinese loans to grow sugar, rice, bananas and oranges for export to expand the fastest-growing African economy without oil reserves.

It’s crucial that efforts be made to stop a possible overflow before the seasonal rains start in June, said Endashew Tadesse, a technical specialist at the Upper Awash River Basin Authority. A spill by the lake east of the capital Addis Ababa may flood towns and drive nomadic herdsmen from the area.

Beseka, fed by hot springs at 954 meters (3,130 feet), has swollen from a 3-square-kilometer pond in the 1960s to 45 square kilometers, causing the diversion of a road from Addis Ababa to Djibouti’s port, a main trade route in landlocked Ethiopia.

Frustrated Efforts

Over the past 14 years, the government has unsuccessfully installed pumps and built canals to try to keep Beseka at bay.

Irrigation projects are increasing the flow of water into the lake through the hot springs that feed it, said Assistant Professor of Civil Engineering Megersa Olumana Dinka from Haramaya University in Ethiopia, who wrote papers on the phenomenon in 2009 and last year. Seismic activity may also be a factor, Megersa said in an e-mail.

Authorities have attributed Beseka’s growth to irrigation runoff in the Metahara area. That includes the Upper Awash Agro Industry Enterprise company bought this year from the government by Horizon Plantations, a venture majority owned by Mohamed al-Amoudi, the largest single investor in Ethiopia.

Studies haven’t proven Upper Awash Agro to be a source of the lake’s growth, Horizon General Manager Jemal Ahmed said in a phone interview. If it has any environmental impact, “we will investigate and cooperate with the government,” he said.

Saudi Investment

Al-Amoudi has moved into agriculture with plans to export rice, bananas and processed coffee from Ethiopia. Horizon is seeking to double orange production to 50,000 tons a year by investing 432 million birr ($23 million) in Upper Awash Agro.

The Tendaho sugar factory 380 kilometers northeast of Addis Ababa that’s financed with a $640 million line of credit from the Export-Import Bank of India could suffer if the Awash becomes saline. India is the world’s largest sugar consumer and second-biggest producer.

Metahara and Addis Ketema, towns with more than 30,000 residents, the sugar estate at Metahara east of the capital as well as Tendaho’s sugar facility in the arid Afar region are at risk should the lake continue its mysterious growth.

Sugar is important to Ethiopia’s growth plans as raw sugar futures at 18 U.S. cents a pound on ICE Future U.S. in New York are 50 percent higher than at the end of 2008. They’ve dropped almost 9 percent this year after falling 16 percent in 2012.

Sugar, Cotton

Of importance too to Ethiopia, whose longtime leader Meles Zenawi died last year, in its drive to transform a nation of 90 million residents into a middle-income country are the cotton farms supplying a growing textiles industry. Cotton plantations in the Middle Awash area run by the Amibara Business Group would also suffer from a salty river. The former state farms have already lost over 2,000 hectares to salt water since 1984, according to the International Water Management Institute.

Amibara’s Middle Awash Agricultural Development Enterprise is “concerned” at the growth of the lake before the rains, Deputy General Manager Wubshet Yilma said. “If it goes into the Awash now, the problem will be much bigger” for Amibara’s cotton farms, he said in a phone interview.

School Submerged

Any saline spill also jeopardizes Ethiopia government plans to develop the Afar area including building a sugar crusher at Tendaho, whose plantation will use water from a dam on the Awash to produce as much as 600,000 tons of cane a year.

“If it rains, it’s over,” Endashew said in an interview at an office near a school submerged two years ago by the lake.

Its pace of growth has increased since the regional government began constructing the Fantalle canal for a 467 million-birr irrigation project in 2008 following a drought, said Engida Zemedagegnehu, a hydrogeology manager at the Ethiopian Water Works Design & Supervision Enterprise.

Even with runoff from farms a probable cause of the lake’s increasing rate of growth, “our efforts to pump more water didn’t reduce the expansion,” Tesfaye said. The river contains 4 percent lake water and any more could be ruinous, he said.

Whatever the reason for the swelling, “the lake has potential to flow to Awash River and devastate Metahara Sugar Estate in the next few years,” professor Megersa said. “It would then also negatively impact all downstream irrigation developments in the Awash basin, including Tendaho.”

Thorn Trees

Beyond Tendaho, state-owned Sugar Corp. is building 10 refineries, including six for the Kuraz Sugar Project in the South Omo region near Kenya. It’s working too in the Awash area with China National Complete Plant Import & Export Corp., or Complant, on the Kessem sugar project. The $150 million Kessem is funded by state-owned Development Bank of China.

Sugar Corp. managers didn’t respond to e-mails and phone calls to spokesman Yilma Tibebu seeking comment since March 16.

From Metahara, the 1,200-kilometer Awash, which originates in Ethiopia’s highlands, flows northeast into Afar before drying near Djibouti. The area is studded with thorn trees and hot rocky outcrops inhabited by about 1.5 million people.

The Afar, primarily nomadic herders that carry long, curved daggers in sheaves on their hips, drink the river water, as do livestock. The effect of contamination on those that use the river would be “terrible,” Megersa said.

A group of experts and officials are studying the lake and will advise on how to deal with its growth, Tesfaye said. “For the time being, we don’t have a very good direction on what action we should take,” he said.

To contact the reporter on this story: William Davison in Addis Ababa at wdavison3@bloomberg.net

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net

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