By Aaron Maasho
ADDIS ABABA (Reuters) - Ethiopia has announced plans to construct two dams along its share of the Nile, six months after embarking on a 5,250 MW power plant that rankled Egypt over concerns it might affect the flow of the river.
The Horn of Africa nation aims to produce 20,000 megawatts (MW) of power within the next 10 years, part of a plan to spend $12 billion over 25 years to raise power generating capability.
Officials estimate the hydropower potential of the nation -- blessed with cascading rivers flowing through rugged mountains -- is around 45,000 MW.
"We are embarking on building two additional dams in the Nile Basin, and feasibility tests are under way with support from the Norwegian government," said Mihret Debebe, chief executive of the state-run Ethiopian Electric Power Corporation.
Mihret did not give a time frame for completion of the projects, but added they would generate 2,100 MW upon completion "in the near future."
"We plan to generate 5,000 MW from the Basin during the next five-year period until 2020," he said.
Egypt, solely dependent on Nile waters, has long protested utilization by upstream nations, and has so far shunned a recent deal that aimed to replace colonial-era treaties that granted it a lion's share of the river's flow.
Ethiopia is constructing its Grand Renaissance Dam from its coffers at a cost of nearly $5 billion. The project is expected to be completed in five years time.
Ethiopia also signed 11 contracts worth around $329 million with several foreign firms late on Wednesday to construct transmission lines for export, rehabilitate existing sub-stations and for management fees.
Among those who signed deals are KEC International, Kalpataru Limited and Gammon from India, Energoinvest from Bosnia-Herzogovina, Italy's JV SAE, CYMI of Spain, French firm Alstom Grid and Germany's ABB <ABBN.VX.
The amount is mainly funded by the African Development Bank.
The Horn of Africa nation plans to sell power to Sudan, Yemen, Kenya and even Egypt as it ramps up power production to become a major exporter in the continent.
The country has already started transmission of 50 MW to Djibouti, while exports to the eastern Sudanese towns of Gadarif and Gallabat are expected in one or two months.
Plans are under way to export 5 MW to Kenya's northern Moyale town next month, while an agreement has been signed to further connect to Yemen through Djibouti's underwater sea cable, officials say.
(Editing by David Clarke)