ADDIS ABABA (REUTERS) - Ethiopia secured a US$1 billion (S$1.2 billion) loan from China on Friday to build transmission lines linking its capital Addis Ababa with Africa's biggest hydropower dam being built on the Nile.

Ethiopia wants to become one of the world's leading power exporters and plans to invest more than US$12 billion to harness energy from the rivers running off its rugged highlands. It aims to generate over 40,000 MW of hydropower in the next two decades.

Centerpiece among an array of projects in the Horn of Africa country is the US$4.1 billion Grand Renaissance Dam in the western Benishangul-Gumuz region, which is designed to generate 6,000 MW upon completion.

China has invested heavily in African infrastructure and its companies often pick up work building projects it has financed.

Some deals have also secured China greater access to Africa's abundant mineral wealth.

Chinese state utility Electric Power Equipment and Technology Co. Ltd and the Ethiopian Electric Power Corporation (EEPCo) signed the deal to finance and build 400-kilovolt and 500-kilovolt transmission lines to connect the mega-dam to Ethiopia's capital.

EEPCo Chief Executive Mihret Debebe said the project would enable Ethiopia to become a "green energy hub" in Africa.

The loan will also enable the construction of two distribution sub-stations for the dam.

Few details of China's loan were immediately available, but Debebe indicated it would carry a favourable, below-market interest rate.