VZCZCXYZ0000
PP RUEHWEB

DE RUEHAE #0815/01 2790850
ZNY CCCCC ZZH
P 060850Z OCT 06
FM AMEMBASSY ASMARA
TO RUEHC/SECSTATE WASHDC PRIORITY 8464
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKDIA/DIA WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RHMFISS/CJTF HOA PRIORITY
RUEHDS/AMEMBASSY ADDIS ABABA 5983
RUEHDJ/AMEMBASSY DJIBOUTI 2865
RUEHKH/AMEMBASSY KHARTOUM 0150
RUEHLO/AMEMBASSY LONDON 1222
RUEHFR/AMEMBASSY PARIS 1397

C O N F I D E N T I A L ASMARA 000815 
 
SIPDIS 
 
SIPDIS 
 
LONDON FOR AFRICA WATCHERS 
PARIS FOR AFRICA WATCHERS 
 
E.O. 12958: DECL: 10/05/2016 
TAGS: PGOV ECON EPET ER
SUBJECT: ENERGY IN ERITREA: AN OFF AND ON PROPOSITION 
 
 
Classified By: AMBASSADOR SCOTT H. DELISI FOR REASONS 1.4(b) and (d). 
 
¶1. (U) Summary:  The following cable provides a snapshot of 
the erratic energy situation in Eritrea from the spring to 
the present.  Resulting from the GSE's strictly controlled 
economy, a limited supply of hard currency and an opaque and 
seemingly uncoordinated bureaucracy, uncertainties in power 
and energy availability will continue to plague end users in 
Asmara.  End Summary. 
 
--------------------------------------------- ---- 
Power Ups and Downs Through the Spring and Summer 
--------------------------------------------- ---- 
 
¶2. (C) On the first of April 2006, the Eritrean Electric 
Authority (EEA) announced scheduled, rolling power outages of 
six hours per day blaming a worldwide shortage of generator 
lubricant due to Hurricanes Katrina and Rita and the Asian 
tsunami of 2004.  As is often the case with the government 
 
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announcements, this information was partly true and partly 
false.  A source in the petroleum industry explained that the 
major manufacturers of the lubricant are, in fact, in 
Indonesia and Louisiana.  The natural disasters had resulted 
in a constriction of the supply and an increase in price. 
However, the shortage in lubricant was actually created when 
the EEA failed to renew the supply contract when it came due 
because of a shortage of hard currency.  When they belatedly 
entered negotiations for a new contract, the price was beyond 
what they could immediately afford (as a result of the higher 
prices caused by the natural disasters) which resulted in 
delayed procurement until they could scrape together the 
money for the purchase.  A decision apparently was made at 
the time to reduce power production due to the lubricant 
problem.  However, even after the lubricant shipment arrived 
at the port of Massawa at the end of April, the EEA announced 
a new, more extensive schedule of rolling cuts for the month 
of May, ostensibly still due to the lack of lubricant. 
 
¶3. (U) As the summer months progressed, power outages 
increased in duration and breadth.  Citywide, there was no 
electricity from midnight to 7:00 AM.  During the rest of the 
day, alternating sections of Asmara,s power grid were out 
for six to eight hours at a time.  At first, the outages 
adhered to a schedule (published only in the local language 
version of the government newspaper).  As June turned into 
July, the outages increased in duration and the published 
schedule became completely irrelevant.  The third week of 
July encompassed the most severe shortages, with some sectors 
of the grid receiving no power for over 24 hours at a 
stretch.  On July 26, rumors began to circulate that the 
power was going to be put back on 24 hours a day.  With no 
official notice and without explanation, the electricity in 
Asmara returned to 24-hour the same day, and has been ever 
running continually ever since. 
 
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Impact of Outages on Local Economy 
---------------------------------- 
 
¶4.  (C)  Post has heard rumors that thousands of dollars 
worth of damage may have been inflicted on the city,s power 
generation and transmission equipment, which are not built to 
withstand the power surges that normally occur when power is 
turned on and off.  Although the cellular network was 
unaffected for several weeks after the initial power cuts in 
the spring, cellphones began to fail wholesale as the finite 
supply of diesel was increasingly cornered by an increasing 
number of standby generator owners.  By June, the mobile 
phone network was simply shut down from midnight onwards and 
by July, the system was only operating about half of the time 
during daylight hours.  The main server tracking individual 
phone records crashed repeatedly, and finally collapsed, 
costing the government-owned telephone company Eritel 
additional revenue. (Post heard a figure of $50,000).  The 
landline telephone system also suffered increasingly from 
damaged transformers and alternating surges and outages. 
Towards the end of the outages, land lines were no longer 
dependable even when power was on in the surrounding grid. 
 
¶5. (C) While statistics for businesses, particularly small, 
family-owned businesses, are not available in this closed 
environment, anecdotal reports indicate damage to Eritrea,s 
already suffocating business environment was severe. 
Examples of businesses known to Embassy employees that closed 
over the summer include an ice cream shop and four hair 
salons; enterprises that require a predictable and dependable 
electric supply.  Post's medical officer reported a serious 
spike in food poisonings and illnesses in the spring related 
to poor food handling, as restaurants coped with the loss of 
refrigeration and freezers.  Embassy operations were, on the 
whole, only minimally affected.   For several days, however, 
the Embassy,s American Center, which is off-compound and has 
no backup generator, received no power until 2:00 PM, making 
it increasingly difficult to run internet and library 
services or keep offices going. 
 
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COMMENT 
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(C) According to the source in the petroleum industry, the 
GSE decided to cut the power in a deliberate attempt to save 
limited hard currency but unfortunately did not consult with 
any technical experts about the potential consequences of the 
decision.  Only after incurring significant damage to the 
power generation and transmission equipment, and significant 
hard currency costs in any event, did the GSE reverse the 
decision and return to uninterrupted power.  Whether it has 
the financial resources to continue a constant power supply 
for the foreseeable future is, however, uncertain. 
Unfortunately, the shortage of marine lubricant in country 
(the original, publicly provided reason for the outages) will 
also continue to present a problem in the months ahead as 
foreign currency reserves in Eritrea continue to dwindle. The 
concerns about power generation, coupled with the fuel 
shortages discussed septel, will ensure that Eritrea,s 
energy future remains highly uncertain for some time to come. 
DELISI