Ethiopia has traveled a long way from being a poster child for drought and famine to one of the fastest-growing economies in the world. However, this East African nation's energy production has not been on par with its rapid economic growth, often in double-digit figures.

The Ethiopian Government has embarked upon massive infrastructure development projects across the country as part of its five-year Growth and Transformation Plan (GTP). One of the main components of the GTP, now in its last year, is the construction of the Grand Ethiopian Renaissance Dam (GERD) on the Blue Nile River. It will be Africa's largest with a power generating capacity of 6,000 MW.

A number of Chinese hydropower companies are engaged in the rapidly expanding power sector of Ethiopia. In September 2014, Chinese firms Sinohydro and the China Gezhouba Group Co., and a local firm were awarded a contract to build Ethiopia's new twin hydropower dams on the Gebba River in the west. The 391-MW project has been dubbed the most expensive per mega-watt cost wise. Of its $583-million price tag, 80 percent is coming as a loan from the Export-Import Bank of China (China EximBank).  

While many countries and development partners are shying away from financing Ethiopia's mega hydro projects due to concerns over the environment and displacement of locals, Chinese companies on the other hand are actively taking part in them.

Chinese banks have emerged as major financiers for the country's energy development. The Industrial and Commercial Bank of China is currently financing the Gibe 3 project and China EximBank Genale Dawa 3.

Ethiopia hopes to increase its power generation capacity by this year to 10,000 MW. Ethiopian officials have realized that the involvement of the Chinese Government and Chinese firms is indispensable.

The African nation is banking on huge government-supported energy and transportation projects to help transform its agrarian economy and become one of the world's leading power exporters. It plans to invest more than $12 billion to harness hydropower from the rivers running off its rugged highlands and generate over 40,000 MW by 2033.

Ethiopia will also receive Chinese funding for a $1-billion transmission line that will bring electricity from the GERD to the capital. China EximBank is primarily funding the two 500-kilovolt cables while the 619-km link is being constructed by the State Grid Corp. of China.

At the signing ceremony for the transmission line in 2013, the then CEO of Ethiopian Electric Power Corp. Mihret Debebe said it was a historic event. The continuous Chinese financial support for such huge projects was significant. "The construction of this big transmission line will benefit our economy and ensure our industrial development," he said.

"China's economic development model is a benchmark for Ethiopia. We hope to get more support from China, both in finance and technology," said Ahmed Shide, State Minister of Finance and Economic Development.

Shide said Chinese infrastructure projects have made "visible and significant" contributions to Ethiopia's road and rail facilities." At the same time, Ethiopia is providing market access to Chinese companies," he added.

On the ground, Chinese construction companies are changing the economic and infrastructure landscape of this African country.

(Reporting from Ethiopia)