ADDIS ABABA (Reuters) - The Italian firm building Africa's biggest hydropower dam in Ethiopia on Tuesday denied allegations that the dam would deprive 200,000 self-sufficient people of a living and make them dependent on aid.

The ethnic rights group Survival International said last week that the dam would disrupt fishing and farming and displace more than 200,000 people, among them the Kwegu and Hamar tribes.


"The project will not cause drought: the dam will not block the flow of water to the river indefinitely, but merely redistribute it during the course of the year," Salini Costruttori said in a statement.

"Activities connected to the local fishing trade will not be destroyed. Agriculture will be able to benefit from a constant supply of water through the year."

The Gibe 111 dam, costing 1.4 billion euros and expected to generate 1,800 megawatts, is one of five Ethiopia is building in a drive to beat power shortages and export electricity. It will almost double current Ethiopian capacity of just under 2,000 MW.



Survival International director Stephen Corry said last week that no respectable body should fund "this atrocious project.

An SI representative who did not wish to be named said then that the dam would ruin the economy of those living near it.

"It will end the annual flooding some rely on to make the land they farm fertile, and for tribes who rely on fishing, it will deplete stocks. They will need aid."

The Ethiopian government has said that people affected by hydropower dams will be compensated or relocated.

Ethiopia is negotiating funding for Gibe 111, whose construction began in 2006, with the World Bank, the African Development Bank, the European Investment Bank and the Italian government.

Hydropower supplies about 90 percent of Ethiopia's electricity, and the country plans to spend $12 billion over 25 years on generating plant with the aim of exporting to a continent where shortages are common despite abundant potential resources of solar, hydro and other power.

Source: Reuters