Ethiopia on Saturday inaugurated the €1.5 billion ($1.57 billion) Gibe III hydro plant on River Omo.

The plant has 10 turbines each with a capacity of 187MW, and will increase Ethiopia's total electricity output to 4,238 megawatts.

It is located 450km southwest of the capital Addis Ababa and is expected to supply both domestic and export markets.

With a capacity of 1,870MW, Gibe III is the third plant on the Gibe-Omo hydroelectric cascade. The others are Gibe I and Gibe II, which are already operating. The government plans to build Gibe IV and V further downstream.

Construction works of Gibe III began in July 2006 and was financed by China’s ICBC bank through a loan, covering 60 per cent of the cost while the Ethiopian government covered 40 per cent.

Electricity from the plant will be transmitted through a 400 kilovolt line stretching up to the outskirt of Addis Ababa – Kaliti power plant.

The dam was constructed by Italian firm Salini Impregilo and Dong Fang of China.

Last year, Ethiopia commissioned the first phase of electricity generation at the Gibe III plant from three turbines with an output of 561MW.