1i.,:·,:.l'j                                                                     Adcir€ss:-
      •Wf-n IJ<j:I\ 11'1·"'1 mlil 07                                                   Kirbs Kifle Ketema, Weredr, 07,
      1•n.·r· ,wrc 9W04t;                                                              House No. 944/045,
      ,,,,,1 un                                                                        Meba Building
      11i:1h +251 115 541'830
      4,)1/i +251 115 54(i844          r,·v1~V'7;f Jt,t\,htth ;)~~                     Tel ·> 25 1 115 580632
                                                                                       Fax -·251115_580628
      l'. ,). '.~. 15381
      lt'"l/.?,A inio(;>eep.com.et     ETHIOPIAN ELECTRIC POWER                        E 0. Box 15881
                                                                                       E-mail inio@eep.com.et              I
                                                                                                                           I


                                                                 ri,vrn. <fl'l'~           ~
                                                                 Ref.No.              ~~        ~L · \~ ·
                                                                 cp'}         -   I


                                                                Date         1 4 NAY _2018-
The World Bank

 Task Team Leader !Energy Unit Country Office

Addis Ababa



Dear Sirs.


Our external ·Audito1:s, Audit Service Corporation, has examined -our books of Account for

and produces the report for the year ended July 7, _2016

                                                                        ..
·Therefore Ethiopian Electric power has sent a copy from each report for your purpose.
                                                                                                                           I
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                                                                                                                           I
                                                                                                                           I
                                                                                                                         . I




                                                                                                                           I
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                                                                                                                           I
D
D
           INDEPENDENT AUDITOR'S REPORT
           TO THE SUPERVISING AUTHORITY OF
D          ETIDOPIAN ELECTRIC POWER

           We were engaged to audit the accompanying financial statements of Ethiopian Electric
D          Power, which comprise the balance sheet as at 7 July 2016, and the profit and loss account,
           statement of changes in equity and statement of cash flows for the period then ended, and a
           summary of significant accounting policies and other explanatory information.

           Responsibility for the Financial Statements
           Management is responsible for the preparation and fair presentation of these financial
D          statements in accordance with generally accepted accounting principles and in the manner
           required by the Commercial Code of Ethiopia of 1960, and for such internal control as
           management determines is necessary to enable the preparation of financial statements that are
D          free from material misstatement, whether due to fraud or error.

           Auditor's Responsibility
D          Our responsibility is to express an opinion on these financial statements based on conducting
           the audit in accordance with International Standards on Auditing. Because of the matters
D          described in the Basis for Disclaimer of Opinion paragraph, however, we were not able to
           obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.


D          Basis for Disclaimer of Opinion

           1.     The computerized accounting system, which is neither fully integrated nor accurately

D                 documented, is administered by a third party. Numerous errors are encountered and
                  parts of the system are not properly supervised by the Entity. The accounting is not
                  current and no financial reports are prepared specifically for management. As a

D                 result, management is unable to monitor the overall accuracy of financial information
                  on a timely basis. In consequence, we were unable to rely on the system of internal
                  control over the accounting for the purposes of our audit and therefore unable to
                  satisfy ourselves as to the accuracy and completeness of the accounting records.
D
D
D
    ~ 251-011-5515222          Fax 251-011-5513083            E-mail: ASC@ethionet.com             Bl 5720
D     251-011-5535012
      251-011-5535015
      251-011-5535016


D
D
u
D   INDEPENDENT AUDITORS' REPORT
    TO THE SUPERVISING AUTHORITY OF
    ETHIOPIAN ELECTRIC POWER (continued)
D
    2.     Included in the property, plant and equipment shown on the balance sheet are
D          capitalized losses on foreign exchange amounting to approximately Birr
           2,918,000,000 which constitutes a departure from generally accepted accounting
           principles. Under those principles the losses should have been expensed, resulting in a
D          reduction in equity of Birr 2,918,000,000.

    Disclaimer of Opinion

D   Because of the significance of the matters described in the Basis for Disclaimer of Opinion
    paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a

D   basis for an audit opinion. Accordingly, we do not express an opinion on the financial
    statements.


D
0   8 May 2018

D
D
D
D
D
D
D
D
D
                                                2

D
u
D   ETHIOPIAN ELECTRIC POWER
    PROFIT AND LOSS ACCOUNT
D   FOR THE YEAR ENDED 7 JULY 2016



D                                                   2016                  2015

D                                      Notes   Ethiopian Birr        Ethiopian Birr

    REVENUE                                        2,844,259,743      2,692,378,075
D   COST OF PRODUCTION                  3          2,312,937,477      2,055,864,346

    GROSS OPERATING PROFIT                           531,322,266        636,513,729
D   Other income                        4            117,761,874         80,467,727

D   OPERATING EXPENSES
                                                     649,084,140        716,981,456

    Administration                      5            227,956,691        367,389,084
D   Borrowing costs
    Audit fee
                                        6          1,426,096,479
                                                         397,700
                                                                      1,821,988,752
                                                                            330,000
    Provision for stock obsolescence                   4,889,099
D   Loss (gain) on foreign exchange                3,282,163,707
                                                   4,941,503,676
                                                                       (284,250,785)
                                                                      1,905,457,051

D   LOSS FOR THE YEAR                              (4!222!~U2!536)    U1188!4'.Z5!525)

D
D
D
D
D
D
D
                                               3
D
u
lo    ETHIOPIAN ELECTRIC POWER
      BALANCE SHEET
D     AS AT 7 JULY 2016

                                                         2016                   2015
D     ASSETS
      NON-CURRENT ASSETS
                                            Notes   Ethiopian Birr         Ethiopian Birr

      Property, plant and equipment          7          234,119,694,959    197,442,834,443
D     Long term debtor                                    3,433,249,251      1,855,979,783
      Deferred charges                                      215,546,269         99,855,489

0     CURRENT ASSETS
                                                        237276824902479    199239826692715

      Stock                                                 150,255,022         83,997,143
D     Debtors
      Cash
                                             8              597,451,512
                                                          1,569,722,493
                                                                               393,184,875
                                                                             1,147,092,509
                                                          2231724292027      1262422742527
D     TOTAL ASSETS                                      240.085.919.506    201.022.944.242

D     EQUITY AND LIABILITIES
      CAPITAL AND RESERVES
      Capital                              9
0       Authorized - Birr 120.000.000.000
        Paid                                             30,415,947,934     30,415,947,934
      Contributions and grants                               65,331,208         52,574,404
 D    Legal reserve                       10                  2,283,027          2,283,027
      Accumulated loss                                   (5,491,345,497)    (1,145,098,084)

 D    TOTAL EQUITY
      NON-CURRENT LIABILITIES
                                                         24299222162672     2923252 707 2281

      Bonds payable                          11         118,278,227,741    102,304,409,989
 D    Long term loans
      Contractors' retentions
                                             12          55,184,984,064
                                                          3,937,834,230
                                                                            43,325,045,989
                                                                             4,072,179,909
      Consumers' contributions                                1,974,462         14,197,870
 D                                                      177240320202497    149271528332757
      CURRENT LIABILITIES
 D    Creditors
      Current maturity of bonds
                                             13
                                             11
                                                          5,147,890,889
                                                         22,708,249,499
                                                                             5,516,100,625
                                                                            10,657,142,857
      Current maturity of long term loans    12           5,018,106,922      2,749,140,327
 D    Interest payable                       14           4,816,435,027
                                                         37~69026822337
                                                                             3,059,019,395
                                                                            21298124032204
      TOTAL EQUITY AND LIABILITIES                      240,085.919.506    201,022,944,242
 D
 D
                                                    4
:D
 r,
ETHIOPIAN ELECTRIC POWER
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 7 JULY 2016

                                                     Contributions and
                                         Capital          grants       Legal reserve Accumulated loss            Total
                                      Ethiopian Birr  Ethiopian Birr Ethiopian Birr Ethiopian Birr           Ethiopian Birr

Balance at 7 July 2014                30,459,325,445           2,400,449   2,283,027                         30,464,008,921

Loss for the year                                                                          (1,188,475,595)   (1,188,475,595)
Transfer from capital                    (43,377,511)                                          43,377,511
Additional contributions and grants                        50,173,955                                            50,173,955

Balance at 7 July 2015                30,415,947,934       52,574,404      2,283,027      (1,145,098,084) 29,325,707,281

Prior year adjustment                                                                         (53,827,877)      (53,827,877)
Loss for the year                                                                          (4,292,419,536)   (4,292,419,536)
Additional contributions and grants                        12,756,804                                            12,756,804

Balance at 7 July 2016                30!415,24'.Z,234     6513311208      21283,02'.Z   (5,4211345142'.Z}   24!222!216ii'.Z2




                                                           5
u
D   ETHIOPIAN ELECTRIC POWER
    STATEMENT OF CASH FLOWS
0   FOR THE YEAR ENDED 7 JULY 2016


D
                                                                  2016               2015

D   CASH FLOWS FROM OPERATING ACTIVITIES
                                                             Ethiopian Birr     Ethiopian Birr

    Loss for the year                                         (4,292,419,536)    (1,188,475,595)
D   Adjustments for
      Finance costs recognized in profit or loss               1,426,096,479      1,821,988,752
      Loss (gain) in foreign exchange recognized
0         in profit or loss
      Depreciation of non-current assets
                                                              3,282,163,707
                                                              1,820,123,688
                                                                                  (284,250,785)
                                                                                 1,657,895,300

D   Movements in working capital
                                                              2,235,964,338      2,007,157,672

       (Increase) decrease in stock                              (66,257,879)       358,606,773
D      Increase in debtors
       (Decrease) increase in creditors
                                                              (1,781,536,105)
                                                                (568,606,700)
                                                                                 (1,286,696,789)
                                                                                    872,418,408
    Cash (used in) generated from operations                    (180,436,346)     1,951,486,064
0   Interest paid
    Foreign exchange (loss paid) gain received
                                                              (7,640,308,677)
                                                              (1,393,926,257)
                                                                                 (6,918,519,390)
                                                                                    135,449,508

0   Net cash used in operating activities                     (9,214,671,280)    (4,831,583,818)

    CASH FLOWS FROM INVESTING ACTIVITIES
D   Payments for non-current assets
    Net cash used in investing activities
                                          (15,532,089,192)
                                          (15,532,089,192)
                                                                                (22,267,181,016)
                                                                                (22,267,181,016)

0   CASH FLOWS FROM FINANCING ACTIVITIES
                                                                 12,756,804         50,173,955
    Proceeds from contributions

0   Repayment of borrowings
    Proceeds from borrowings
                                                             (2,868,290,742)
                                                             28,024,924,394
                                                                                (1,294,591,802)
                                                                                28,839,784,987
    Net cash generated from financing activities             25,169,390,456     27,595,367,140
D   Increase in cash and cash equivalents                        422,629,984       496,602,306
    Cash and cash equivalents at the beginning of the year     1,147,092,509       650,490,203
D   Cash and cash equivalents at the end of the year           1!56211221423      111411022,502

0
D
                                                      6
D
u
D   ETIDOPIAN ELECTRIC POWER
    NOTES TO THE FINANCIAL STATEMENTS

    1   ENTITY INFORMATION

        Ethiopian Electric Power was incorporated in Ethiopia in December 2013 with the
        objective of undertaking electricity generation, transmission and substation construction
        and upgrading.     It is wholly owned by the Government of the Federal Democratic
        Republic of Ethiopia and is governed by Public Enterprises Proclamation No. 25/1992 .


0       The Enterprise's head office is in Addis Ababa and it has projects and branches
        throughout Ethiopia.


D   2   SIGNIFICANT ACCOUNTING POLICIES

        a)     Statement of compliance

D              These financial statements have been prepared in accordance with generally
               accepted accounting principles and in the manner required by the Commercial

D              Code of Ethiopia of 1960.

        b)     Basis of preparation

D              The financial statements have been prepared on a historical cost basis, except for
               the measurement of impaired assets at their recoverable amounts. The principal
D              accounting policies are set out below.                                    ·

        c)     Revenue
0              Revenue is derived from the sale of electricity and is recognized in the period in
               which it is earned. Revenue from domestic sources is measured based on an

0              agreement with Ethiopian Electric Utility. Export sales of electricity are
               measured at the fair value of the consideration received or receivable.


D       d)     Other income

               Other income is recognized when significant risks and rewards of ownership are
D              transferred to the recipient and the amounts of revenue can be measured reliably.

        e)     Stock
D              Stock is valued on the basis of the lower of average cost or net realisable value.

D
D
                                                 7

D
u
D
    ETHIOPIAN ELECTRIC POWER
D   NOTES TO THE FINANCIAL STATEMENTS (continued)

    2    SIGNIFICANT ACCOUNTING POLICIES (continued)
D        t)   Tangible assets

D             (i)    Property, plant and equipment

              Property, plant and equipment are stated at cost less accumulated depreciation.
D             For assets acquired by the predecessor organization, the original cost and
              accumulated depreciation as at the date of establishment of the Enterprise are
              reflected in these financial statements. Depreciation is recognized so as to write
D             off the cost of assets (other than those under construction or in transit) over their
              useful lives using the straight line method. The following useful lives are used in
              the calculation of depreciation.
D                               Hydroelectric power plants         5 -60 years
                                Wind power plant                  15 -20 years
D                               Transmission lines
                                Substations
                                                                  25 -40 years
                                                                  15-40 years
                                Diesel                            10 - 50 years
D                               Geothermal
                                Vehicles
                                                                  15 -40 years
                                                                      5 years
                                Administrative buildings             40 years
D                               Office furniture and equipment     5 -25 years

              (ii)    Capital work in progress
D             Capital work in progress is included under property, plant and equipment and
              comprises costs incurred on ongoing capital works. These costs include material,
0             transport, labour, depreciation and interest.

              Losses on foreign exchange in respect to long term foreign loans obtained for the
D             acquisition and installation of capital works amounting to Birr 2,017,208,412 and
              accumulated through July 2015 are also included in the cost of capital work in
              progress.
D
         g)   Intangible assets

D             Deferred charges are in respect of consultancy services and are shown at cost.
              Amortization will be charged on completed services over a five year period. No

D             amortization is charged on services that are not yet completed.



D
                                                 8

D
    u
    D   ETHIOPIAN ELECTRIC POWER
        NOTES TO THE FINANCIAL STATEMENTS (continued)
    D   2    SIGNIFICANT ACCOUNTING POLICIES (continued)

    D        h)   Financial instruments

                  Financial assets and financial liabilities are recognized when the Entity becomes a
D                 party to the contractual provisions of the instrument. They are initially measured
                  at fair value.

0            i)   Contributions and grants

                  Insofar as they are not refundable or there is no obligation or commitment
D                 attached to them, contributions and grants are treated as equity.

                  Contributions received for projects are treated as liabilities until the completion of
D                 the projects, when the utilized portions are transferred to the contributions and
                  grants account. Unutilized portions are credited to miscellaneous income on
                  completion of the project.
D            j)   Taxation

D                 The Entity is exempt from income tax in accordance with a decision of the
                  Council of Ministers.

D            k)   Borrowing costs
                  Borrowing costs incurred directly attributable to the acquisition, construction or
D                 production of qualifying assets, which are assets that necessarily take a substantial
                  period of time to prepare for their intended use, are added to the cost of those
                  assets, until such time as the assets are ready for their intended use.
0                 All other. borrowing costs are recognized in profit or loss in the period in which
                  they are incurred.
D            1)   Cash and cash equivalents

D                 Cash and cash equivalents comprise cash in hand, cash at banks in current and
                  deposit accounts and short term, highly liquid investments with maturity periods
                  of three months or less. For the purpose of the cash flow statement, cash and
D                 cash equivalents consist of cash in hand and at banks net of short-term finances.


D
D
                                                    9

D
n
u
D   ETHIOPIAN ELECTRIC POWER
    NOTES TO THE FINANCIAL STATEMENTS (continued)
D   2    SIGNIFICANT ACCOUNTING POLICIES (continued)

D        m)   Translation of foreign currencies

              Transactions in foreign currencies during the year are translated into Ethiopian
D             Birr at the exchange rate ruling at the date of the transaction. Foreign currency
              monetary assets and liabilities are translated at the exchange rates ruling at the
              balance sheet date.      Resultant exchange losses resulting from loans for the
D             acquisition and installation of capital works are capitalized as property, plant and
              equipment while other exchange differences are recognized in profit or loss for
              the year. Non-monetary assets and liabilities denominated in foreign currency are
D             recorded at the exchange rate ruling at the date of the transaction.


D
D
0
D
D
0
D
D
D
D
0                                                 10

0
 u
D    ETIDOPIAN ELECTRIC POWER
     NOTES TO THE FINANCIAL STATEMENTS (continued)
D
D                                                      2016                  2015
                                                  Ethiopian Birr        Ethiopian Birr
     3   COST OF PRODUCTION
D
         Generation                                1,681,622,262         1,702,760,817

D        Transmission                                631,315,215
                                                   2,312.937.477
                                                                           353,103,529
                                                                         2.055.864.346

D
     4   OTHER INCOME

D        Club sales                                   38,539,312
         Compensation for damages                      8,283,870
D        Miscellaneous                                70,938,692
                                                     117,761,874
                                                                            80,467,727
                                                                            80.467,72:Z

D
     5   ADMINISTRATION
0        Salaries and employee benefits              150,150,655           110,208,240
         Depreciation                                 19,044,163           207,851,032
D        Office rent
         Insurance
                                                      17,125,326
                                                       2,376,880
                                                                            20,791,933
                                                                                10,375
         Consultancy fee                                                    13,362,769
D        Miscellaneous                                39,259,667
                                                     227,956,691
                                                                            15,164,735
                                                                           367.389,08~

D
D    6   BORROWING COSTS

         Interest on domestic loans                1,122,263,073         1,625,861,145

D        Interest on foreign loans
         Bank charges on loans
                                                     289,557,428
                                                      14,275,978
                                                                           177,359,427
                                                                            18,768,180
                                                   1,426.096,479         1,821,988,752
D
         Borrowing costs capitalised during the period amounted to Birr 1,411,820,501
D        Capitalization is based on specific borrowings for specific qualifying assets.



D                                                      11


11
    u
    0   ETHIOPIAN ELECTRIC POWER
        NOTES TO THE FINANCIAL STATEMENTS (continued)
    D
    D   7 PROPERTY, PLANT AND EQUIPMENT

                                            Balance at                           Balance at
    0                                       7 July 2015
                                               ETB
                                                               Additions
                                                                 ETB
                                                                                 7 July 2016
                                                                                    ETB

D         COST
          Hydroelectric power plants        30,803,126,948     3,383,423,321     34,186,550,269
          Transmission lines                 8,501,461,475     1,309,874,944      9,811,336,419
D         Wind power plant
          Substations
                                             6,735,530,108
                                             5,243,214,566
                                                               2,160,708,834
                                                                 651,571,665
                                                                                  8,896,238,942
                                                                                  5,894,786,231
          Diesel                               523,170,953                          523,170,953
D         Vehicles
          Office furniture and equipment
                                               294,548,147
                                               278,128,493
                                                                 35,739,162
                                                                 13,627,862
                                                                                    330,287,309
                                                                                    291,756,355

D         Geothermal
          Administrative buildings
                                               216,464, 777
                                                98,326,012                 -
                                                                           -
                                                                                    216,464,777
                                                                                     98,326,012
                                            52,693,971,479     7,554,945,788     60,248,917,267

0         Works in progress
          Advance payments
                                           132,782,734,484
                                            23,329,569,811
                                                              31,293,302,336
                                                                (351,263,920)
                                                                                164,076,036,820
                                                                                 22,978,305,891
                                           208,806,275,774    38.496.984.204    247,303.259.978
D         DEPRECIATION

D         Hydroelectric power plants
          Wind power plant
                                             6,643,839,719
                                               636,720,932
                                                                777,679,925
                                                                507,097,364
                                                                                  7,421,519,644
                                                                                  1,143,818,296
          Transmission lines                 1,685,886,322      232,689,884       1,918,576,206

D         Substations
          Diesel
                                             1,482,950,611
                                               356,652,063
                                                                199,089,064
                                                                 30,310,867
                                                                                  1,682,039,675
                                                                                    386,962,930
          Vehicles                             232,927,527       23,713,560         256,641,087
D         Office furniture and equipment
          Geothermal
                                               152,092,627
                                               145,870,055
                                                                 36,389,149
                                                                 10,926,750
                                                                                    188,481,776
                                                                                    156,796,805

0         Administrative buildings              26,501,475
                                            11,363,441,331
                                                                  2,227,125
                                                               1.820.123.688
                                                                                     28,728,600
                                                                                 13,183,565,019


D         NET BOOK VALUE                   197.442.834.443                      234.119.694.959


D
D
0                                                    12

I
tl
u
0   ETHIOPIAN ELECTRIC POWER
    NOTES TO THE FINANCIAL STATEMENTS (continued)
D
D                                                             2016                2015
                                                         Ethiopian Birr      Ethiopian Birr
D   8    DEBTORS


D        Ethiopian Electric Utility
         Ethio -Sudan
                                                           291,778,556
                                                            97,399,336
                                                                               254,869,357

         Ethio -Djibouti                                    71,524,606
D        Value added tax recoverable
         Metal and Engineering Corporation
                                                            66,889,952
                                                            41,926,447
                                                                                71,922,383
                                                                                41,926,447
         Staff
0        Prepayments and deposits
                                                             3,600,509
                                                             3,328,985
                                                                                 2,580,153
                                                                                 3,289,244
         Advance payments to suppliers                       2,894,724           3,161,640

D        Miscellaneous                                      23.069.342
                                                           602,412,456
                                                                                20,396.596
                                                                               398,145,820
         Provision for doubtful debts                       (4,960.945)         (4,960.945)
0                                                          52114511512         323118~h8'.Z5


0   9    CAPITAL


D        The Entity is wholly owned by the Government of the Federal Democratic
         Republic of Ethiopia. During the year, the authorized capital was reduced from

D        Birr 139,074,764,567 to Birr 120,000,000,000.



0   10   LEGAL RESERVE

         The legal reserve is a statutory reserve to which not less than one twentieth of the
D        net profits shall be transferre~ each year until it amounts to one-fifth of the
         canital.

D
0
D

t
                                                    13
    u
    0   ETHIOPIAN ELECTRIC POWER
    0   NOTES TO THE FINANCIAL STATEMENTS (continued)



    D
                                                                2016               2015
    D   11 BONDSPAYABLE
                                                           Ethiopian Birr     Ethiopian Birr


0          Balance at 7 July 2015                          112,961,552,846     84,839,503,698
           Additional bonds                                 28.024.924,394     28,157.765,158

D          Less: Repayments
                                                           140,986,477,240    112,997,268,856
                                                                                  (35,716.010)
                                                           140,986,477,240    112,961,552,846
0          Less: Amounts repayable within 12 months        (22.708.249.499)
                                                           118.278.227.741
                                                                              (10,657.142.857)
                                                                              102.304.409.989

D
           Commercial Bank of Ethiopia, 1,403,000 unsecured bonds of
0          Birr 100,000,000 each bearing interest at the rate of 6% per
           annum and repayable in 14 semi-annual instalments from
                                                                               28,300,000,000
D               2014/15 through 2021
                2015/16 through 2022                                           18,000,000,000
                2016/17 through 2023                                           38,000,000,000

0               2017/18 through 2024
                2018/19 through 2025
                                                                               28,000,000,000
                                                                               28,000.000,000
                                                                              140,300,000,000
D          Various bonds in local and foreign currency, bearing interest at
           the rate of 1% per annum above the saving deposit rate and

D          repayable in 2016 and thereafter.                                      686,477.240
                                                                              140.986.477.240

D
D
0
I


                                                      14
    u
    0   ETIDOPIAN ELECTRIC POWER
        NOTES TO THE FINANCIAL STATEMENTS (continued)
    0
I
    0                                                           2016              2015

ID
I
                                                           Ethiopian Birr    Ethiopian Birr
        12   LONG TERM LOANS

             Balance at 7 July 2015                        46,074,186,316     26,801,432,987
    D        Additional loans                              13,785,658,198     19,838,071,673
                                                           59,859,844,514     46,639,504,660

    D        Loss on foreign exchange                       3,211,537,214
                                                           63,071,381,728
                                                                                 729,273,458
                                                                              47,368,778,118
             Less: Repayments                              {2,868,290,742)    {1,294,591,802)
    0        Less: Amounts repayable within 12 months
                                                           60,203,090,986
                                                           {5,018,106,922)
                                                                              46,074,186,316
                                                                              {2,749,140,327)
                                                           55,184,984,064     43,325,0451282
    D
    D        Loans from foreign lending institutions and development agencies, bearing interest
             at rates of between 4% and 9% per annum, and repayable in, mainly, semi-annual
    D        instalments. All loans are secured by guarantees of the Ethiopian Ministry of
             Finance and Economic Cooperation.

    D
        13   CREDITORS
    0        Contractors                                    3,460,851,858       4,014,581,481
             Ethiopian Electric Utility                     1,559,859,368       1,291,749,340
    0        Taxes
             Accruals
                                                              101,174,478
                                                                4,594,973
                                                                                  186,494,926
                                                                                      265,000

D            Contractors' retentions
             Miscellaneous
                                                                2,173,999
                                                               19,236,213
                                                                                    2,196,187
                                                                                   20,813,691
                                                            5,147.890,889       5,516,100,625
D


                                                      15
u
D
o   ETHIOPIAN ELECTRIC POWER
    NOTES TO THE FINANCIAL STATEMENTS (continued)



D                                                          2016                 2015
                                                      Ethiopian Birr       Ethiopian Birr
0   14   INTERESTPAYABLE

         Balance at 7 July 2015                         3,059,019,395       2,884,168,646
D        Interest capitalized                           9,294,927,594       5,295,132,082
         Gain on foreign exchange                      (1,323,299,764)         (4,982,515)

D        Interest expense charged to profit or loss     1,411,820.501
                                                       12,442,467,726
                                                                            1.803.220.572
                                                                            9,977,538,785
         Less: Interest paid during the year           (7 .626.032.699)    (6.918.519,390)
0                                                          4.816.435.027    3.059.019.395


0   15   RETIREMENT BENEFIT OBLIGATIONS

0        The Entity makes contributions to a statutory defined pension scheme. The
         employer and the employee make contributions of 11 % and 7% of the employee's
0        basic salary as determined by statute.


D   16   CASH FLOWS


0        Increases and decreases in the balance sheet items without actual movement of cash
         are not considered in the cash flow statement. These are as follow

D        An increase in property, plant and equipment by way
           of direct payments by lenders            13,785,658,198
           of capitalized interest                    9,294,927,594
                                                       23.080.585,792


    17   INCORPORATION

         The Entity is incorporated in Ethiopia by Council of Ministers Regulation No.
         302/2013 and is domiciled in Ethiopia.



                                                      16
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0    ETHIOPIAN ELECTRIC POWER
     NOTES TO THE FINANCIAL STATEMENTS (continued)

 D
 D   18   FUNCTIONAL AND PRESENTATION CURRENCY


ID        These financial statements are presented in Ethiopian Birr.

     19 EVENTS AFTER THE REPORTING PERIOD

D         There are no significant events after the reporting period which should be reported in
          these financial statements.

D    20 DATE OF AUTHORIZATION


0         The Chief Executive Officer of the Entity authorized the issue of these financial
          statements on 8 May 2018.

D
D
D
D
D
D
D
0
D
D
                                                    17

0
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