Ethiopia will start building a major dam along the Nile River to generate hydropower to increase electricity production, Prime Minister Meles Zenawi said late on Saturday.

The Horn of Africa nation aims to produce 15 thousand megawatts of power within 10 years, part of a strategy that spends $12 bn over 25 years to improve the country's power-generating capabilities.

"We are planning to carry out a number of important projects, including a major project on the Nile," Meles said at a press conference late on Saturday.

"The project will soon be inaugurated," he said, referring to a dam Ethiopia intends to build in its western Benishangul region near the border with Sudan.

According to the Ethiopian Electric Power Corporation's plan for the 2010/2011 budget year, the agency says the dam would generate 5 thousand MW upon completion in five to ten years.

Outages have been common in Ethiopia for five years. The country rationed power for over five months last year with lights going off every second day, closing factories, hampering exports and fuelling a shortage of hard currency.

Ethiopia is building five other hydropower dam projects, some funded by the World Bank.

Power demand in Africa will rise by 150,000 MW between 2007 and 2030, according to the International Energy Agency.