El Niño Drought Triggers 20 Percent Drop in Water Inflow Across Ethiopia’s Major Hydroelectric Facilities

State-Owned Utility Reduces Export Projections and Curtails Supplies to Data-Mining Operations as Key Reservoirs Face Severe Seasonal Shortfalls

By Staff Writer

(Nairobi, Kenya) — Ethiopian Electric Power (EEP) has reported a 20 percent decrease in water inflow across its key hydroelectric stations—primarily the Grand Ethiopian Renaissance Dam (GERD) and Gibe III—due to the impacts of El Niño weather conditions. The state-owned utility announced that the reduced water volume will constrain power generation capacity and result in projected revenues for the upcoming fiscal year falling short of current earnings.

The announcement came during a press briefing regarding EEP’s performance during the 2025/26 budget year and its operational outlook. Chief Executive Officer Ashebir Balcha stated that peak water inflows traditionally occur between July and August (Hamle and Nehase), extending into September and October (Meskerem and Tikimt). However, joint monitoring conducted with meteorological institutions, including IGAD, alongside consultations with senior Ministry of Water and Energy advisors, confirmed a sustained downward trend in water inflow since June (Sene).

The CEO noted that reduced reservoir levels directly diminish power output by lowering effective head height. At the Gibe III dam, lower water levels cause individual generating units to lose up to 50 megawatts of capacity. Consequently, EEP has revised its revenue and power export targets downward for the 2026/27 budget year.

Regarding regional power trade, EEP continues to supply electricity to Kenya and Djibouti, whereas export transmissions to Sudan remain suspended due to ongoing armed conflict and damaged grid infrastructure.

Deputy CEO Efrem Woldekidan described the current water shortfall as among the most severe in the utility’s history. Because GERD and Gibe III combined account for over 65 percent of Ethiopia’s total electricity generation, EEP has begun curtailing power supplies to energy-intensive data mining operations to safeguard domestic grid stability.

Despite environmental headwinds, EEP reported total revenue of 124.2 billion birr for the 2018 E.C. budget year, yielding a net profit of 39.5 billion birr. Its 21 power stations generated 9,730 megawatts of electricity, reaching 91.9 percent of the annual generation target. Hydropower currently supplies 97 percent of the nation’s electricity, with GERD alone accounting for 51 percent.

Of the annual revenue, data mining companies contributed 50 billion Birr while consuming 32 percent of power, whereas the Ethiopian Electric Utility (EEU) provided 45 billion birr while drawing 56 percent of generation. The remainder supplied high-tier industries and the Ethio-Djibouti power link. The higher revenue yield from data centers stems from billing settled in foreign currency, which generated over $476 million.

Looking ahead, EEP requires a total budget of 313.8 billion Birr for the 2026/2027 budget year, to be financed through loans and development finance institutions. The utility plans to add 50 megawatts of new capacity while accelerating energy diversification beyond hydropower to cushion against future climate shocks and navigate local security challenges affecting project execution in the Amhara Region.

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