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Allana Potash Continues To Drift Amidst Ag Malaise

Stephen Simpson, CFA

Sep. 12, 2014                                                  

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Summary

• Allana shares continue to drift lower, despite a strong and engaged strategic partner in Israel Chemicals.
• If efforts to increase royalties and taxes on resources produced in Israel stick, Allana’s Ethiopian Danakhil project may become even more valuable to ICL.
• Allana still needs to secure project financing, but these very risky shares look undervalued below $0.80/ADR.

The bloom is definitely off of the ag bull market, as lower crop prices have soured investors on seed, ag equipment, and fertilizer companies. None of that is positive for Allana Potash (OTCPK:OTCPK:ALLRF, (AAA.TO)), nor is the fact that potash pricing remains stuck around $350 per ton. These shares have continued to weaken since the company announced a major tie-up with Israel Chemicals (OTCPK:ISCHY) and since my last piece. While the Global X Fertilizers/Potash ETF (NYSEARCA:SOIL) is down about 2% since my mid-March update on Allana, the company’s shares themselves are down another 20% or so.

Granting that investors were disappointed in the terms of alliance with ICL, and granting that there is still more dilution likely on the way (as the company still needs to raise debt, and probably equity, to fund its Danakhil project), I continue to believe these shares are undervalued. By no means is Allana anything other than a high-risk investment, but ICL appears committed to the project, and I believe the current price doesn’t give much credit to the value of the project.

While I generally recommend avoiding “F-type” ADRs and buying shares on local exchanges when possible, Allana’s ADRs are more liquid than most unsponsored ADRs. Even so, I’d advise owning the Toronto-listed shares when/where that is an option.

Some Progress, But Not Headline-Grabbing Stuff

Allana isn’t just sitting on its hands. There is a lot of work for the company to do as it moves toward building the mining capex needed to turn the Danakhil project in Ethiopia into a potash-producing asset.

The company has successfully relocated two villages, and received a water extraction permit from the Ethiopian government. With the permit covering 30M cubic meters/year, Allana has more than enough to cover the 18.5M or so cubic meters it will need to produce 1Mtpa of potash and some left over for production expansion. The ECPM contractor selection process is ongoing, and the company is presently working on optimizing the project (including hydrology work and in-fill drilling).

Elsewhere, important logistics projects are moving forward, including the construction of a road and port.

That’s all well and good (and necessary), but it is not the sort of activity that is going to lead to the market reconsidering the shares. What could prompt such a move is the company’s ongoing efforts to obtain financing for the project. Management expects to secure debt financing in the late fall or early winter. Investors shouldn’t expect great terms (this is a risky project in a risky jurisdiction), and there is a risk of delay in securing the financing, but less onerous terms or a creative structure could be a positive.

Developments At ICL Should Be Generating More Interest

While things at Allana have been fairly quiet, the same cannot be said of the company’s partner, ICL. The company is exploring the sale of its German cleaning/disinfectants business, a move that would make the fertilizer business even more prominent, and is pursuing a dual listing in the U.S.

More specific to Allana, ICL has relocated a managing director from its Cleveland Potash operation to Danakhil to help oversee the project. ICL has also been active in lobbying the Ethiopian government for support on the Danakhil project and sponsoring educational programs via Ethiopia’s Agriculture Transformation Agency on fertilizer application – part of a wider effort to start developing the African fertilizer market.

All of that may pale next to what happened in May, though. ICL lost on arbitration ruling regarding royalties, and saw Israel’s Sheshinski Committee recommend higher taxes and royalties on natural resources produced in Israel – a 5% royalty and a 42% natural resources tax to be applied after an 11% operating return calculated on depreciated assets. In response, ICL froze $1 billion in planned investments in its Dead Sea operations, and indicated that further investments in Israel are likely not viable under that sort of structure.

I would think that this should make the Allana Danakhil asset even more valuable to ICL. True, ICL has other projects in countries like Brazil and Vietnam, but this project should be able to produce a meaningful amount of potash in a relatively short time. I’d also note that Allana just recently announced that it had engaged a company to conduct a preliminary economic assessment of its kainitite resources at the Danakhil site. Kainitite can be processed into sulphate of potash (or SOP), a more valuable form of potash than murate of potash (or MOP) that is the initial focus of the project.

All told, it seems to me that Israel Chemicals is looking at the prospect of reduced expected economic returns from its Dead Sea potash assets, while it looks to increase its presence in the potash market and sell more into emerging markets like India, the Mid East, and Africa. I should think that would make Allana’s Danakhil project even more valuable to the company and perhaps motivate an outright acquisition of the remaining shares of the company, given the current slump.

No Change To My Outlook

While it is true that low crop prices have led investors to flee the ag sector, I don’t believe that the current price of corn or potash should have too much bearing on a project/company that won’t be producing for a few years. What’s more, fertilizer is still under-applied in many parts of the world, and I believe that demand for fertilizers like potash will continue to grow.

In valuing Allana, I use a lower assumed price than management’s feasibility report ($375/t versus $430/t), higher opex cost assumptions ($80/t-plus), and a higher discount rate. I also assume that the project will be expanded in 2024, though, so my life-of-project production forecast is higher. Including expected dilution and financing, I believe Allana shares should still trade at almost C$0.90/share, or just a bit under $0.80/ADR.

The Bottom Line

If Allana shares continue to drift lower, I believe ICL has to at least consider stepping up and buying up the remaining shares. At a minimum, I would think that such a transaction would lead to lower project financing costs. Taking the bearish side, what’s the rush? The off-take agreement lets ICL control the project’s expected production, and that would likely discourage a rival bidder, so other than an unexpected spike in potash prices, ICL might be thinking that there’s little risk of the share price of Allana running away from them.

Allana is the sort of stock/investment where it’s tempting to run the numbers over and over again, because it seems strange that the shares trade where they do. Even though the ICL deal was more dilutive than investors may have wanted, ICL’s commitment to the project is a positive, and the NAV looks attractive even with more conservative pricing and cost assumptions. Again, this is a high-risk opportunity, but one that I’m finding increasingly appealing as the shares drift lower on no apparent negative news, and in the face of what I believe ought to be positive news regarding the importance of Allana/Danakhil to ICL.

http://seekingalpha.com/article/2490885-allana-potash-continues-to-drift-amidst-ag-malaise

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US listing sought by ICL Chemicals

Israeli manufacturer of fertilizers and specialty chemicals Israel Chemicals Ltd had recently submitted to US regulatory authorities, documents seeking its registration with the New York Stock Exchange. ICL has permits to extract potash and bromine from the Dead Sea.

The application placed the nominal fundraising target at USD522.4 million with an initial public offering volume of 62 million ordinary shares. The company is a subsidiary of Israel Corp and is the second largest company in terms of market value listed on the Tel Aviv Stock Exchange.

The company was established back in 1968 as a government owned corporation. In 1992, the Israeli government decided to privatize the company, thus had it listed on the Tel Aviv bourse. In 1995, the government sold its controlling interest to Israel Corp., allowing the company to hold 52.4% shareholdings in ICL.

The second largest shareholder in ICL is Potash Corp of Saskatchewan Inc’s Israeli subsidiary, who owns 13.86% of ICL.

The Israeli government though still has approving authority on any sale or transfer of assets of ICL to any other company. This may prove to be a sticking point since they don’t own any shares in the company to be listed on NYSE.

The application had identified Morgan Stanley & Co and Barclays Capital Inc as lead bookrunners in the IPO. Also included are Goldman, Sachs & Co and Deutsche Bank as bookrunners with BMO Capital Markets Cop as co-manager for the IPO.

The move was precipitated by the Israeli government’s thrust to update its current policy on royalties and taxes for non-oil and gas natural resources. Just last May, a government panel had recommended the imposition of a new tax on mining companies in the country. In this scenario, ICL would be hit the hardest.

In response, the company may focus its efforts abroad should these recommendations come into force.

With the IPO, only Israel Corp’s shareholdings would be diluted, lowering from the current 52.4% to just 46.68%. The company would be listed under the symbol ‘ICL’ on the NYSE board.

The sales of ICL declined by 13% to just USD1.54 billion in the quarter ending June 30. This was attributed to the fall in prices as well as a decline in the volume sold. The company reported an adjusted profit earning of USD214 million for the period, which was lower than the previous quarter’s USD316 million.

Included in the application is a 30 day option granted to the underwriters to purchase an additional 6.2 million shares. Part of the sale would be structured as a derivative transaction to allow the selling shareholder with exposure to possible increases in the price of ICL shares. Alongside this provision is the corollary rejoinder that there is also protection when there are losses in the share price.

ICL’s shares are currently traded in the Tel Aviv Stock Exchange and the registration with the New York Stock Exchange would pose no issue for the company, shareholders and future buyers of the shares during the initial public offer.

http://gantdaily.com/2014/09/13/us-listing-sought-by-icl-chemicals/

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Company, Authority sign Dire Dawa–Dawale road upgrading project

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The Ethiopian Roads Authority yesterday signed an agreement with Chinese CGC Oversees Construction Company to upgrade 220-kms Dire Dawa–Dawale road at a cost of 3.9 billion Birr.

Shandong was also another Chinese company which won the bid to consult the project.

Signing the agreement, Authority Director General Zaid Wolde-Gebriel said that the road would be an alternative to connect Ethiopia to Djibouti port and ease the traffic burden of Awash- Mille-Djibout road which is now serving beyond capacity.

Cognizant of the traffic congestion on Awash-Mille-Djibouti road, the Authority conducted research to look for an alternative road  which it finally identified Dire Dawa-Dawale road to connect  the country to Djibouti with relatively shorter distance., he said.

According to him, the road is expected to serve as the second import-export corridor thereby accelerating trade.
He also said that the road would be completed with quality standards in three years time as the company is experienced in the area.

Company Vice President to Ethiopia Kin Lijing for his part said that the company would finalize the project on schedule. He said that so far, the company has undertaken survey work for 100-kms. He noted that the construction of this road would be done in accordance   with all quality specifications.

Some 85 per cent of the project fund is from Chinese Exim Bank in loan and the remaining 15 per cent would be covered by the government of Ethiopia.

http://www.waltainfo.com/index.php/explore/14955-company-authority-sign-dire-dawadawale-road-upgrading-project

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Solar Cookers Get Hot

By Glenn Zorpette

Guro Grytli Seim, the CEO of Morpho Solar, and Catlin Powers, COO of One Earth Designs, prepare a meal on a One Earth solar cooker.

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Of all the innovations that could markedly benefit humankind, a reliable solar cooker remains one of the most imperative. Countless people across the developing world still cook their food by burning wood or even cow dung, causing respiratory problems and severe deforestation in some regions.

The quest for a practical solar cooker has gone on for decades and produced dozens of models ranging from $70 cheapies to $400 deluxe models. But none of them have caught on significantly for use in the developing-world because they can’t store heat. Without the ability to store heat, a cooker cannot be used, for example, on cloudy days.

But now a group based at the Norwegian University of Science and Technology (NTNU) in Trondheim is reporting a breakthrough in solar cookers. They say it will lead, within a year and a half, to the production of practical solar cookers that can store enough heat during a sunny day to work for an entire additional day, even if it is cloudy. The breakthrough was recognized with a US $8,000 award from the Norwegian Ministry of Petroleum and Energy this past August.

“Our vision is to solve problems in developing countries,” says Guro Grytli Seim, the CEO of a company, Morpho Solar, that was formed recently to capitalize on the Norwegian advance. She notes that nine Ph.D. students and 20 Master’s degree candidates worked on the heat-storage technology, with funding from the university, the Norwegian Investment Fund For Developing Countries, and the electric utility Trønder Energi. The system uses the principle of phase-change to store and release heat. The key ingredient is a salt with a melting temperature of 220 °C, Seim says. Sunlight concentrated by a parabolic reflector melts the salt; when heat is needed, the salt is allowed to solidify, which releases heat.

The system can have a thermal efficiency of 80 percent, Seim explains. For comparison, an electrical system based on photovoltaic cells and batteries would be only about 15- to 20-percent efficient.

The team also developed two different techniques to transfer heat from the parabolic collector to the cooking surface. These technologies, one based on steam and the other on oil, allow the sunlight-collecting parabolic dish to be outside a home and the cooking surface to be inside.

The project began in 2011 with Asfafaw Haileselassie Tesfay, a mechanical-engineering researcher at NTNU. Tesfay came to Norway from his native Ethiopia, which has a particular need for a solar cooker. Eighty five percent of Ethiopians lack access to electricity. And the country has been severely deforested: 40 percent of Ethiopia’s land was once covered by forest; the figure is now 4.6 percent.

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Ethiopian cuisine, too, has a very specific requirement: a cooker that can reach a temperature between 200 °C and 250 °C. Such a temperature is needed to bake injera, a spongy pancake that is eaten with most meals in Ethiopia. Tesfay says the experimental cooker built by him and his colleagues can sustain a temperature of 220 °C (430 °F) for 24 hours, even if clouds roll in. This capability was demonstrated in March during trials with the cooker at Mekelle University in northern Ethiopia, he adds.

Seim says that Morpho Solar plans to complete a prototype of a commercial model in early 2015, and begin production in 2016. The company will begin selling the cooker in Europe and in the United States as well, under an agreement with Cambridge, Mass.-based One Earth Designs, one of the largest makers of solar cookers. Morpho’s strategy is to establish the product in the developed world before selling it at a lower price in developing countries, Seim explains. She is confident that it will appeal to environmentally conscious suburban families.

“It reduces your carbon footprint,” she notes. “And it’s fun. Many people value showing their kids that you can make food using only the sun. It’s less hassle, because you don’t have to buy charcoal or gas. You don’t have any recurring costs. We see that as a value proposition as well.”

http://spectrum.ieee.org/energywise/green-tech/solar/solar-cookers-get-hot

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Aluto-Langano geothermal plant to be operational in April

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The government of Ethiopia is striving for the operationalization of the Aluto-Langano geothermal power plant with installed capacity of 70mw power in this fiscal year, the Ministry of Water, Irrigation and Energy said.

Energy Study and Development Follow-up Director, Gosaye Mengistie told ENA over 78 percent of construction of the geothermal plant has so far finalized. It is expected that the plant will commence operation in April.

Launched in 2013, the expansion of the Aluto-Langano geothermal power plant will increase the country’s generation capacity from geothermal to 70mw power from the current 7mw.

The expansion project is financed by assistance from a 12 million dollar grant from the government of Japan, a 13 million dollar loan from the World Bank and 10 million dollars from the Ethiopian government.

Located in the Rift Valley Lakes Region, the Aluto Langano Geothermal Power Plant is the first geothermal power plant in Ethiopia. The plant was established in 1998 as a pilot plant to test the geothermal resources in the area.

The nation has set target to generate 1,000mw power from two geothermal plants, Tendaho and Corbeti geothermal plants, in the coming few years, he added.

The Tendaho power plant due to be undertaken in Afar regional state, north eastern part of the country, will have a capacity to generate 100mw power.

The nation has also signed agreement with a US- Icelandic private developer Reykjavik Geothermal (RG) to construct Africa’s largest geothermal plant. The Corbeti geothermal project the country due to built with 4 billion USD will be Africa’s largest geothermal plant, with 1,000mw installed power.

Construction of this plant, which will be undertaken in two phases, each with 500mw installed capacity with an eight to 10 year period.

These projects are part of the government’s plan to raise power output to 10,000mw by 2015, in order to meet the growing demand.

It is estimated that Ethiopia has a potential to generate up to 5,000mw power from only geothermal.

“Althou the nation has huge potential for geothermal energy, it doesn’t so far benefit from it. We set target to undertake various activities and change this situation.” he said.

Twenty two power generator sites, with huge geothermal potential have identified so far in the rift valley system, he added. Activities are being undertaken to develop this potential.

“First we have been conducting survey on about 18 places with huge geothermal potential. But now the number of places identified as having with huge potential has reached 22.”

Places like Dalol, Tendaho, Abi, Tiye, Meleka, Dafan, Fentale, Gedemesa, Tulu, Moye, Aloto Langano, Corbeti, and Abaya are among the places identified with huge geothermal potential.

Development of renewable energy will have economic and environmental benefits, said the Director. These projects will help the nation realize the vision to build green economy by 2025.

Utilizing the country’s potential for geothermal energy would help address the increasing demand for electricity, he added. It is estimated that the country’s demand for electricity increases by 25 to 30 percent annually.

http://213.55.98.22/enae/index.php?option=com_k2&view=itemlist&task=user&id=74%3Ameseretbekele&Itemid=260

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Filed under: Ag Related, Economy, Infrastructure Developments, News Round-up Tagged: Agriculture, Allana Potash, Business, East Africa, Economic growth, Ethiopia, ICL, Investment, Millennium Development Goals, Sub-Saharan Africa, tag1

Spuds are nutritious and hardy, and a research centre collaboration is helping defeat hunger in Africa

Gebremedhin Woldegiorgis, senior potato researcher at the Ethiopian Institute of Agricultural Research, and Denis Griffen, potato breeder at Teagas, inspect potato plants at the Teagasc Research Centre in Oakpark, Carlow.   photograph: Dylan Vaughan

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Ethio-Canada business summit opens in Toronto

Alongside the first Canada-Africa 2014 Business Summit, the Ethio-Canada Business and Investment Summit also opened on Monday in Toronto.

This four-day meeting is co-organized by Wafa Marketing and Promotion PLC, the Ethiopian Embassy in Canada and Ethiopian Chamber of Commerce and Sectoral Associations in collaboration with the Canadian Embassy in Ethiopia, Ethiopia’s Ministry of Mines, TFO Canada, and CCAfrica.

It is specifically showcasing the value of doing business in Ethiopia.

It also aims at bringing together the two business communities to build more comprehensive and closer bilateral ties based on mutual benefit and common prosperity, deepen business-to-business ties through success stories from business persons and industry experts.

The summit in addition briefs Canadian investors on Ethiopia’s current and future economic trajectory, investment landscape and opportunities.

Ambassador Taye Atske-Selassie, Director-General of American Affairs in Ethiopia’s Foreign Ministry, opening the meeting, called for the continued growth of the bilateral ties of the two nations.

Ambassador Birtukan Ayano welcomed the role of Ethiopia as a Country of Focus within the auspices of the Canada-Africa Business Summit.

She said: “Ethiopia is poised to become a new frontier for FDI in Africa,” adding that this Summit would encourage and help Canadian investors to participate in Ethiopia’s rapid and sustainable economic growth and tap into the tremendous investment potential of the nation.

She stressed Ethiopia has a lot to offer Canadian development partners including a vibrant and trainable labor force, easily accessible and cheap utility services and a decade of double digit economic growth.

Permanent Representative to the AU, Ambassador David Usher said that this Summit could be seen as a reflection of the need for a growing cooperative economic partnership.

He also noted Ethiopia’s fast growing economy underlined the need to renew the strategic partnership of the two countries.

The current economic growth in Ethiopia, he said, was already generating an increasing business interest from Canadian companies.

Zemedneh Nigatu, Managing Partner of Ernst and Young, presented reasons of investing and doing business in Ethiopia with the theme “Investing in Emerging Ethiopia.”

He detailed ten reasons including Ethiopia’s growing economy and macro-economic stability, demographic advantages, rapid urbanization, its role as a manufacturing hub of Africa, massive infrastructure development, and energy infrastructure development, untapped agricultural resources, tourism, and favorable operating business environment.

The Ethio-Canada Business and Investment Summit is also showcasing panel discussions, question and answer sessions, and deliberations on Ethiopia as a Country of Focus within the Canada-Africa Business Summit.

http://www.ertagov.com/news/component/k2/item/3157-ethio-canada-business-summit-opens-in-toronto.html

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Eleven Companies in Tight Run to Win 900,000tn Fertiliser Tender

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Farmers are recommended to use one quintal of DAP and one quintal of Urea for a hectare of land in which the quantity varies based on the type of the soil.

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- The tender has been split into 11 different lots, in order to avoid overlaps

The government will shortly announce the companies it has selected for the supply of nearly 900,000tns of fertiliser.

A total of 11 companies have responded to the August 2014 tender by the Agricultural Input Supply Enterprise (AISE), only one of them making an offer for each of the two kinds of fertiliser the Enterprise wants, Urea and NPS. This is the second year in a row that the enterprise is buying NPS, a replacement for DAP, which it dropped two years ago.

The Enterprise seeks to procure 521,000tn of NPS and 373,000tn of Urea. NPS has become favoured over DAP, because it has everything DAP has and Sulphur, according to Amarech Bekelle, communications directorate at the Enterprise.

The financial opening, on September 10, 2014, showed that the lowest offer for Urea was 381.5 dollars a tonne – nearly 90 dollars chapter than the 470 dollars the previous year. NPS was also slightly cheaper, going down from 435 dollars to 416 dollars a tonne. The highest offers now for Urea and NPS were 458 dollars and 632 dollars.

The least offer for Urea, 381.5 dollars, came from Yara Switzerland Ltd – a Swiss based international grain and fertiliser trader with a history of financial awards to Ethiopian officials through yara International, of which it is a subsidiary. Its first awardee was the late Prime Minister Meles Zenawi, who received 300,000 dollars. Then followed another prize of 30,000 dollars to Eleni Gebremedhin(PhD), former CEO of Ethiopian Commodity Exchange (ECX). Its latest award of 60,000 dollars, about 1.2 million Br, went to Tekalign Mamo (prof.), state minister for Agriculture and advisor to the Minister, early this month. Yara has been a regular in Ethiopia’s fertiliser market for many years.

The lowest bid for NPS, 412 dollars, was made by NAMPGC Holding Corporation – a Chinese international grain and fertiliser trader.

From the total 11 lots, Yara offered the lowest price for eight of both Urea and NPS, NAMPGC Holding Corporation for two lots and CHS Europe SA, a Swiss based company, for the remaining one lot. The tender was floated in five lots for NPS and six for Urea.

The price of a tonne of Urea stood at 321.88 dollars in the international market on August 31, 2014, according to YCharts – a provider of financial information based in Chicago and New York (US). This is an 18 dollar increase from a month ago, July 31, but a decrease of 53 dollars from the same time a year ago.

The auction was divided into 11 different lots to avoid overlaps in the delivery to the Enterprises and at the Djibouti port, said Amarech.

The Agricultural Inputs Supply Enterprise (AISE) is a public enterprise established in 1985 and accountable to the Ministry of Agriculture (MoA). The Enterprise has 31 million Br in assets, including 22 warehouses, seven distribution and sales outlets and 36 vehicles. It managed to achieve a net profit of 35.4 million Br during the 2011/12 fiscal year and 35.6 million Br during the following year.

The AISE buys and distributes agricultural inputs, including fertilisers, farming chemicals, different kinds of seeds, plant and animal medicines and vaccines, and laboratory equipment.

The Enterprise imported 552,000tn in 2010/11 and 560,000tn the following year. Its import s in 2012/13 was down to 477,000tns.

The government is constructing four fertiliser factories in the Tigray, Amhara, Oromia and Southern regional states, with annual capacities of 25,000tns each.

The fertiliser steering committee will select the companies that will make the supplies in a short period of time, after analysing the financial offers and the companies that produce the fertilisers, said Getenesh Ashenafi, director general of the Enterprise. The committee is composed of representatives from the Ministry of Agriculture (MoA), the National Bank of Ethiopia (NBE), the Commercial Bank of Ethiopia (CBE) and the Ministry of Finance & Economic Development (MoFED).

http://addisfortune.net/articles/eleven-companies-in-tight-run-to-win-900000tn-fertiliser-tender/

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Tecno Group favours Ethiopia ahead Nigeria for third assembly plant

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China-based handset manufacturer, Tecno Group has concluded plans to build a factory in Ethiopia to enhance its presence in African market, investigations have revealed.

BusinessDay learnt that Tecno, which already runs two factories in the Ethiopian capital, chose Ethiopia for the ‘third phase’ mobile phone assembly and production plant ahead of Nigeria because of what industry sources linked to security challenges facing Nigeria.

It is not clear whether the Tecno Group would still consider Nigeria for assembly plant in the future.

According to AllAfrica, an online news report, the “Ethiopian government has already dedicated an investment area for the establishment of an ICT park to support the development of ICT. The foundation stone preparatory to the plant was laid for Tecno Group in the park which is under construction.”

Although the group vice president of the mobile phone brand, Arif Chowdhury, had last year assured that the company would build its African plant in Nigeria, it is not clear whether the company would live up to this promise or it has made a u-turn.

On the planned plant in Nigeria, Chowdhury says in a report that “Nigeria is Tecno’s biggest market in terms of volume, and Lagos will be the location of the plant because Lagos is not just the commercial nerve centre of Nigeria but also the economic capital of Africa.”

The company is still waiting for the right policies of government on duty structure for mobile phone imports to finalise their plans in building the plant, he says.

But reports indicate that the Tecno Group has made significant progress in its factory construction in Ethiopia where it started operations in 2009, and has employed about 400 workers.

Nigeria, the largest market in Africa with largest population, must have over time influenced Tecno’s business growth, a situation analysts believe would have influenced the company’s choice of where to set up its third African assembly plant.

http://businessdayonline.com/2014/09/tecno-group-favours-ethiopia-ahead-nigeria-for-third-assembly-plant/

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Lavrov to talk oil, Ukraine next week

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A delegation of eight giant companies headed by the Russian Foreign Minister, Sergey Lavrov, will visit Ethiopia on Wednesday, September 17. Sources told Capital that Lavrov will come to Addis Ababa for a one-day official visit. The purpose is to strengthen economic and political ties between Ethiopia and Russia.

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According to the information obtained by Capital, Lavrov will meet with Prime Minister Hailemaraim Desalegn, Foreign Minister Tedros Adhanom (PhD) and other senior government officials and discuss bilateral issues. He is also expected to hold talks with Dr. Nkosazana Dlamini Zuma, Chairperson of the African Union Commission. He first came to Addis Ababa in 2006.
The visit of Lavrov, apart from the business talks, will focus on the embattled region of Ukraine.

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According to sources, Russian energy and oil and gas company executives will be part of the business delegation that include officials from Gazprom.

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In July this year, officials of GPB Global Resources, a unit of Russia’s state-owned Gazprombank Group, said that the company may invest about USD 60 million searching for petroleum in northeastern Ethiopia. The company announced it won approval from the Ethiopian government for a production-sharing agreement that covers seven years for exploration and 25 years for production. Investment for exploration will focus on conducting surveys and drilling test wells in a 42,000 square kilometer (16,200 square mile) area in the Afar region that forms part of East Africa’s Rift Valley.

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Russians are not new to the Ethiopian oil exploration sector. During the socialist era, Soviet Petroleum Exploration Expedition (SPEE) was prospecting for oil and gas in the Ogaden Basin in the 1980s. Russians were involved in the mining sector too. It was Russian Geological Survey that discovered the Kenticha tantalum deposit in Borena Zone, Oromia Regional State. They also discovered the Legedembi primary gold reserve, which MIDROC Gold is currently mining. Russian companies also want to develop hydropower projects in Ethiopia. Sources said the Russian delegation will meet the minister of Water, Irrigation and Energy, Alemayehu Tegenu, to discuss the investment opportunities in the energy sector.

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There are currently more than 30 Russian companies investing  in Ethiopia. Russian companies are also interested in the Ethiopian national railway network development. Russia is a major arms supplier to the Ethiopian army. The Ethiopian Air Force and ground forces are equipped with Russian military artillery.

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Ethiopia exports agricultural products to Russia. So far Russians buy Ethiopian flowers from the Netherlands. Ethiopian Airlines is in the process of starting passenger and cargo flights to Moscow.

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According to the official website of the Ministry of Foreign Affairs, Ethiopia and Russia have longstanding historical relations going back to the period of the Russian Czar Machilovich, the father of Peter the Great, in the 17th century. Historical records indicate that Alexander Pushkin, a renowned Russian writer, was a grandson of Abraham Hannibal, an Ethiopian who was presented to Peter the Great by Suleiman the Magnificent. He was baptized in Vilnius, Lithuania, by Peter the Great on his return from defeating the Swedes.

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Other early contacts between Russia and Ethiopia include the visit of an Ethiopian delegation sent by the Emperor Menelik II to Russia, and visits of several Russians to Ethiopia during Menelik’s reign, at least one of whom was given the title of Dejazmatch for his travels on behalf of the Emperor along Ethiopia’s southern boundaries. These contacts laid the foundation for close relations of the two countries, based on mutual respect and friendship between the two peoples. And it is notable that regardless of the differing political systems that existed at various times, relations between them have continued to be close and friendly.

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One demonstration of that friendship has been that Russia has always, and without fail, stood with Ethiopia whenever the sovereignty of Ethiopia was threatened. Russian solidarity with Ethiopia was first illustrated when the Russian Red Cross Society came to Ethiopia in 1896, at the time of the Battle of Adwa when Italy attempted to attack the country. It made an outstanding contribution in the provision of medical supplies at Menelik Hospital and care to the Ethiopian patriots on the battlefield and subsequently. Again, during the fascist invasion of Ethiopia in 1936, Russia was one of those countries which stood in solidarity with Ethiopia. It has done so on every occasion throughout the 20th century whenever Ethiopia faced challenges to its sovereignty and its core national security interests. In short, the bonds that exist between Ethiopia and Russia have stood the test of time and have proven their strength time and again.

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In recent years, there have been increased visits of high level officials between the two countries. Major visits have included former Prime Minister Meles Zenawi’s trip to Moscow in December 2001 and the then Foreign Minister Seyoum Mesfin in November 2007. Prime Minister Hailemariam Desalegn (the then Deputy Prime Minister and Minister of Foreign Affairs) and Alemayehu Tegenu, Minister of Water, Irrigation and Energy, visited Russia in August and October 2011 respectively.

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From the Russian side former Russian Prime Minister, Mikhail Kasyanov, came to Ethiopia in September 2002; and Russian Foreign Minister Sergey Lavrov came here in September 2006.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4541:lavrov-to-talk-oil-ukraine-next-week&catid=35:capital&Itemid=27

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Aluto-Langano Geothermal Plant to go operational in April

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The Ministry of Water, Irrigation and Energy said the Aluto-Langano Geothermal Power Plant with installed capacity of 70MW would go operational this fiscal year.

Energy Study and Development Follow-up Director Gosaye Mengistie told ENA over 78 per cent of construction of the geothermal plant has so far finalized. It is expected that the plant will commence operation in April.

Launched in 2013, the expansion of the Aluto-Langano Geothermal Power Plant will increase the country’s generation capacity from geothermal to 70MW power from the current 7MW.

The expansion project is financed by 12 million USD grant from the government of Japan, 13 million USD loan from the World Bank and 10 million USD from the government of Ethiopia, the Director added.

Located in the Rift Valley Lakes Region, the Aluto-Langano Geothermal Power Plant is the first geothermal power plant in Ethiopia. The plant was established in 1998 as a pilot project to test the geothermal resources in the area, according to Gosaye.

The nation has set target to generate 1,000MW from two geothermal plants, Tendaho and Corbeti geothermal plants, in the coming few years, he added.

The Tendaho power plant due to be undertaken in Afar state, north eastern part of the country, will have a capacity to generate 100MW.

The nation has also signed agreement with a US- Icelandic private developer Reykjavik Geothermal (RG) to construct Africa’s largest geothermal plant. The Corbeti geothermal project the country due to built with 4 billion USD will be

Africa’s largest geothermal plant, with 1,000MW installed power.

Construction of this plant, which will be undertaken in two phases, each with 500MW installed capacity with an eight to 10 year period.

These projects are part of the government’s plan to raise power generation capacity to 10,000MW by 2015, in order to meet the growing demand.

It is estimated that Ethiopia has a potential to generate up to 5,000MW from only geothermal.

“Although the nation has huge potential for geothermal energy, it doesn’t so far benefit from it. We set target to undertake various activities and change this situation,” he said.

Twenty two power generator sites, with huge geothermal potential have identified so far in the rift valley system, he added. Activities are being undertaken to develop this potential.

“First we have been conducting survey on about 18 places with huge geothermal potential. But now the number of places identified as having with huge potential has reached 22.”

Places like Dalol, Tendaho, Abi, Tiye, Meleka, Dafan, Fentale, Gedemesa, Tulu, Moye, Aluto Langano, Corbeti, and Abaya are among the places identified with huge geothermal potential.

Development of renewable energy will have economic and environmental benefits, said the Director. These projects will help the nation realize the vision to build green economy by 2025.

Utilizing the country’s potential for geothermal energy would help address the increasing demand for electricity, he added. It is estimated that the country’s demand for electricity increases by 25 to 30 percent annually.

http://www.waltainfo.com/index.php/explore/14994-aluto-langano-geothermal-plant-to-go-operational-in-april-

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Ethiopia Establishes National Kaizen Council

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Addis Ababa September 16/2014 – A National Kaizen Council that aims at disseminating the Kaizen philosophy throughout Ethiopia was established here on Wednesday, September 16, 2014.

Speaking during the establishment of the council, Prime Minister Hailemariam Dessalegn, who is also chairperson of the council, said Ethiopia has the capacity to implement Kaizen philosophy assisted by its numerous educational institutions.

The premier stressed that the council should be a champion of change in disseminating Kaizen philosophy and creating nationwide mobilization.

Regional Kaizen councils need to take a lead in disseminating Kaizen philosophy in their respective areas, he added.

The Prime Minister also underscored the need to mobilize the required human resources by designing curricula that incorporate Kaizen philosophy at different levels of education.

According to Hailemariam, the council should give priority to creating awareness among the general public and making the public clearly understand the essence of Kaizen. The mass media need to play big role in instilling Kaizen philosophy among the public.

The Prime Minister finally declared Meskerm, this first month of the Ethiopian year, ”Kaizen month”.

Industry Minister Ahmed Abitew on his part said the establishment of an Ethiopian Kaizen Council, in addition to the formation of Kaizen Institute earlier, shows the country’s commitment to the realization of Kaizen philosophy.

Ahmed added that the Ethiopian Kaizen Institute has played substantial role in transferring, implementing, sustaining and owning the Kaizen philosophy, despite its only two years existence.

According to him, the steady assistance of Japan International Cooperation Agency (JICA) and the Ethiopian government are the reasons for this success.

The minister said 79 industries have implemented the Kaizen philosophy and  20,467 management and frontline workers trained and organized under 3,590 Kaizen Promotion Teams (KPTs) during the past two years.

He further cited JICA’s evaluation report as saying that Ethiopia’s Kaizen project is one of the best in Africa and the achievements can be bases for JICA’s human resource development project in Ethiopia.

Director-General of the Ethiopian Kaizen Institute (EKI), Getahun Tadesse, told ENA that the institute has undertaken significant change in work place relations and modernized work practices that ultimately improve product and productivity.

The philosophy also brings success in increasing productivity, decreasing wastages, improving work place safety and quality of production, he added.

Sugar Corporation and the privately-owned Peacock Shoe and Awash Leather companies have made significant change by implementing Kaizen, according to the director-general.

The Ethiopian Kaizen Council, chaired by Prime Minister Hailemariam Dessalegn, consists of ministers, university presidents, Ethiopian Chamber of Commerce and Sectoral Association, Media CEOs and professional associations.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2272:ethiopia-establishes-national-kaizen-council&Itemid=260

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First Ethiopian science museum opens in Addis

The first Science Museum of Ethiopia, which is said to help promoting science and research in the country, has been opened Monday at the Addis Ababa Science and Technology University.

The University has established the museum and Engineering and Mathematics Center, in cooperation with Israeli aid agencies based in the US.

Minister of Education Shiferaw Shigutie said on the opening ceremony that the museum levels up students understanding for science, and as a result contributes for the industry led economic policy of the nation to be followed in the near future.

The Addis Ababa Science and Technology University president Dr. Tarekegn Tadesse said for his part that students at all levels can make use of the museum with the center, for upgrading their knowhow in science.

The center built with 16 million Birr displays different research results and indicates the level of science at present, he added.

Students and educators can visit the museum and the center to help advance their knowledge and expertise in science, it was indicated.

http://www.ertagov.com/news/component/k2/item/3153-first-ethiopian-science-museum-opens-in-addis.html

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ERA Awards Two Chinese Companies 5b Br Road Projects

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-  The two projects are part of the ERA’s Fourth Road Sector Development Program (RSDP IV)

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The 220Km asphalt road from Dire Dawa to Dewalle will be constructed by CGC Overseas Construction Group for 3.99 billion Br.

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The Ethiopian Roads Authority (ERA) has awarded two contracts worth five billion Br to two Chinese companies for the construction of two roads in eastern and southern Ethiopia.

CGC Overseas Construction Group will contruct a 220Km asphalt road from Dire Dawa to Dewalle for 3.99 billion Br, while China Tiesiju Civil Engineering Group Co Ltd will be paid 1.1 billion Br for a 107Km asphalt road from Konso to Yabelo.

The CGC’s road will have a 10m carriageway in urban areas and 15m elsewhere. It is expected to finish the road within three years from September 2014, with the consultancy of Shandong XinQiDian Overseas Consulting Ltd Co.

Fifteen percent of the project’s finance will be covered by the Government of Ethiopia and the remaining by the Export Import (EX-IM) Bank of China. The 3.73 billion Br loan was approved by the House of Peoples Representatives (HPR), on June 26, 2014.  The loan, which has a two percent interest and a seven year grace period, is payable in 20 years.

CGC Overseas has been operating in Ethiopia since 2003. It has so far completed five projects and is currently working on eight others. The completed projects include a 22Km asphalt road from Chole to Magna, the Dodola Junction to Goba road and the Dera to Gololcha Mechara road, all in the Oromia region, as well as a road project from Kombolcha to Mekaneselam.

The China Tiesiju Civil Engineering Group Co Ltd will make an asphalt concrete road from Konso to Yabelo, a 107Km distance it is expected to complete in three years and five months.

The road has a 10m carriageway in rural areas and 19m in urban areas. It includes 340 drainage pipes and five bridges, along with other structural works. It will be consulted on by the joint venture of Omega Consulting Engineers Plc, a local firm, and a Ugandan firm, Prome Consultants Limited.

China Tiesiju has already constructed an asphalt road from Yabelo to Mega for 770 billion Br. The Yabelo-Mega 100Km long road is part of the 1,000Km Mombasa-Nairobi-Addis Abeba Road Corridor.

The first contract was signed between Zaid Woldegabriel, the ERA’s general director, and Qin Lijing, deputy general manager of CGC Overseas Ethiopia, at the ERA’s headquarters on Ras Abebe Aregay Street, near Mexico Square. But the second project signing ceremony was put back until the coming week because of the absence of the representatives of the contractor who were at project sites.

Qin Lijing, deputy general manager of CGC Overseas Ethiopia (left) promising to Zaid Woldegabriel, the ERA’s general director, to deliver the road on time.

The Dire Dawa-Dewalle road will improve the road link with Djibouti and help to transport raw materials and finished products to and from the industrial zone soon to be constructed at Dire Dawa, as well as simplifying the traffic flow of the route, according to Ziad.

The above two projects are part of the Fourth Road Sector Development Program (RSDP IV) of the ERA, for which implementation costs are estimated to reach 125.3 billion Br. Out of this, 84.5 billion Br is allocated for federal projects, 14.4 billion Br for regional ones and 26.4 billion Br for weredas.

The RSDP was formed as part of the government’s Growth & Transformation Plan (GTP), and is in charge of the rehabilitation of 728Km of trunk roads, the upgrading of 5,023Km of trunk and link roads, the construction of 4,331Km of new link roads, the heavy maintenance of 4,700Km of paved and gravel roads and routine maintenance of 85,649Km of road network. The ERA has rehabilitated, upgraded, constructed and maintained 41,664Km of roads as of June 2013, at a cost of 81.8 billion Br, of which 60.6 billion Br was on federal roads.

The ERA expects the total road network in the country to reach 136,044Km by the 2014/15 fiscal year, from the 48,793Km coverage it had in 2010. Ethiopia’s road density has increased from 24Km in 1997 to 78Km in 2013, with total roads growing from 26,550Km in 2009/10 to 100,000Km in July 2014.

http://addisfortune.net/articles/era-awards-two-chinese-companies-5b-br-road-projects/

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Roads Authority Plans 600km of New Roads at Cost of 6.6b Br

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-  The authority has a long-term plan to increase the road coverage in the city to 25pc by 2020

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The Bole road which extends from the Mesqel Square to the Bole Bridge along with the Africa Avenue.

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The Addis Abeba City Roads Authority (AACRA) has allocated 6.6 billion Br to add just over 600kms to the city’s road network during the current 2014/15 fiscal year. The plans for the year include the temporary expansion of the crowded Akaki Kaliti-Tulu Dimtu road.

The city currently has 4671km of road, which it wants to increase to 5275km – a coverage increase from 17.5 to 19.8pc, with a long term plan of 25pc coverage by 2020, according to Fekade Haile (Eng), head of the Authority, who spoke during a press conference at his office on Tuesday, September 09, 2014.

The authority has secured 6.12 billion Br from the Addis Abeba City Administration (AACA), 43 million Br from the Road Fund and a loan of 204.2 million and 178.2 million Br, respectively, from the Government of China and in aid from France.

The Authority will, however, require an additional 3.8 billion Br to complete its projects for the year, according to Fekade.

Fekade Haile (Eng) AACRA

“We are planning to ask the city administration to transfer unused budgets from other sectors to us at end of the fiscal year,” said Fekade.

The City Administration has allocated a 27.5 billion Br budget for the 2014/15 fiscal year for 10 sector offices. The Addis Abeba Water & Sewerage Authority (AAWSA) received 4.3 billion Br followed by the Housing Development Project Office, with 1.6 billion Br. The Education and Health bureaus got 1.4 billion Br and 1.1 billion Br, respectively.

The Authority’s expected 50 million Br from the Road Fund, which is only used for the maintenance and rehabilitation of existing roads, but got only 43 million Br, with Fekade blaming the shortfall to an outdated formula that the city started applying in 2006.

The AACRA will undertake its projects for the year using its own resources and by hiring contractors. Its projects include 49.66kms of new asphalt roads, all of which will be given to contractors, 35.75kms in the expansion of existing roads by itself and 26.64kms of asphalt roads at condominium sites.

It will also undertake the expansion of the Kaliti Akaki–Tulu Dimtu road project and the reconstruction of the Akaki Bridge. Additionally, it will undertake various projects around the light rail transit. It will also make 450kms of cobblestone roads, as well as increasing the number of people working at the cobblestone quarries to 50,000. The Authority says that it will complete the construction of 21 main bridges during the current fiscal year.

The Authority is still facing challenges to resolve right of way issues, including relocation of residents from project areas and the payment of compensation, which are delaying some of its projects. A taskforce will be established with the support of the city administration to solve the problem, Fekade said.

When the AACRA, which today employs 1,980 people, was established in 1999, Addis Abeba had 2,777km of road, with 11.8pc coverage.

http://addisfortune.net/articles/roads-authority-plans-600km-of-new-roads-at-cost-of-6-6b-br/

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Mexico working to deepen economic ties with Ethiopia

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The government of Mexico will work to expand the existing diplomatic relation with Ethiopia into economic cooperation, Mexican Ambassador to Ethiopia Alfredo Miranda said.

Speaking in a meeting organized to celebrate the 204th anniversary of Mexican Independence, the Ambassador said in spite of strong diplomatic ties, the economic cooperation between the countries doesn’t reach the desired level.

The two countries in the future should focus on implementing previous bilateral agreements to boost economic ties, he said.

Foreign Affairs State Minister, Ambassador Birhane GebreChiristos noted that Ethiopia is the first African country to start diplomatic relation with Mexico.

Mexico is among the few countries in the world that opposed the Italian invasion of Ethiopia.
He urged Mexican investors to come to Ethiopia and utilize the favorable investment atmosphere, business and investment opportunities and untapped resources.

Ethiopia and Mexico has enjoyed diplomatic ties for the past 65 years.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2271:mexico-working-to-deepen-economic-ties-with-ethiopia&Itemid=260

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Tigray undertakes watershed development on 1,300 hectares

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Watershed development was carried out on 1,300 hectares of land in Tigray regional state last Ethiopian budget year.

The development activities were carried out in all 186 kebeles (district) of the Regional State, Michael Miruts, public relations coordinator at the regional state agriculture and rural development bureau told WIC.

According to the coordinator, more than 22.7 million people organized in more than 90,000 teams took in the ecosystem-based approach for development.

In addition to fencing the over 267.9 hectares of land available in the regional state, some 174 million tree seedlings were planted in the reported period, he indicated.

He said the bureau is taking care of the 25 million seedlings planted in 670 Meles parks established in the regional state in 2005 E.C.

http://www.waltainfo.com/index.php/explore/14996-tigray-undertakes-watershed-development-on-1300-hct-

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Industrial minerals ‘widely’ used for manufacturing

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Industries are ‘widely’ using industrial minerals as inputs for the manufacturing of various products so as to lead the way for the nation’s vision to develop industry-led economy, the Ministry of Mines (MoM) said.

Potash, limestone, granite, marble, coal and minerals used to produce cement are the main industrial minerals being widely used in the country, according to Bacha Fuji, PR and Communications Director with MoM.

These minerals are being used by industries for the production of cement, marble, ceramic, paper and glass as well as fodder for cattle and poultry.

The country has huge potential for potash with 1.3 billion tons reserve. It is currently being used in industries engaged in chemicals, textiles, paints, detergent, glass and ceramic production.

In addition to being used as input for industrial products, these minerals are helping the country earn foreign currency. Last year alone the nation earned 541 million USD from export of these minerals, according to the Director.

Industrial mineral deposits in Ethiopia occur in various geological formations and are being used in a wide set of industries prominent among those being glass, ceramic and cement industries.

The main minerals available in large quantities include soda ash, potash, diatomite, bentonite, clay, common salt, gypsum, anhydrite, feldspars, talc, kyanite, magnetite, dolomite, graphite, quartz, mica, apatite, pumice, silica sand, kaolin, phosphate and silica.

The Ethiopian Geological Survey (EGS) has been generating, collecting and managing geo-information of the country for the last four decades.

It is working to identify major mineral reserves of the country and prepare a map which includes areas of mineral reserves and best locations for development, according to Tamru Mersha, PR and Communications Director with EGS.

According to him, the government has prioritized to develop industrial minerals that can be developed using small capital.

Development of minerals which improve soil fertility, such as phosphate, potash and limestone is also a task to which the government has given due attention, Tamru said.

http://www.ertagov.com/news/component/k2/item/3138-industrial-minerals-‘widely’-used-for-manufacturing.html

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COMESA – Australia Begin to Implement Mining Agreement

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COMESA and the Government of the State of Western Australia have begun to implement a Memorandum of Understanding (MoU) they signed in January this year on cooperation in various fields of development.

The MoU signed by Premier Colin Barnett of the State of Western Australia (WA) and COMESA Secretary General Sindiso Ngwenya in Lusaka, Zambia proposed to establish a framework for cooperation covering mineral and petroleum resources, agriculture, vocational training and capacity building.

The two principals and their technical officers met Thursday 4 September 2014 in Perth Australia and developed a draft work programme to implement the key pillars of the agreement. The meeting was held in the side-lines of the “African Down-Under (mining) conference” that took place from 3 to 5 September 2014. In the agreement, six focus areas are identified in the minerals sector; they include fiscal frameworks and mineral policy, strengthening human and institutional capacities, collection and management of Geo-scientific information, research and development, environmental and social issues; and linkages, diversification and cluster development.

A Joint Working Group (JWG) of experts drawn from COMESA and WA presented the draft work program for operationalizing the MOU which is expected to be finalized by the end of this month and implementation to begin in October.

The key priority areas identified include strengthening the legal and institutional framework of COMESA Member States, capacity building, and taxation and fiscal frameworks.

“We need to strengthen the legal and institutional frameworks of our member states to create the enabling environment to unlock the full value of our minerals and other natural assets and their full integration into local economies,” Mr Ngwenya said. “This was a crucial prerequisite for unlocking the value of minerals in the value chain thus contributing to regional economic transformation.”

He disclosed that COMESA has already started mobilizing resources to implement the articles of the agreement and that the United Nations Economic Commission for Africa (UNECA) had promised to support the initiative. He further said that request for additional funding has been made to the African Development Bank and the Africa Legal Resources Centre and favourable responses were expected.

He appealed to the Government of Western Australia and the Federal Government to also provide funding for the program to ensure its objectives are realized.

Premier Barnett said WA will work with COMESA States to ensure the host countries get a fair return on their natural resources and putting in place legal framework to secure the tenure of mining enterprises and environmental conservation. This include safety in the mines.

“We want to share our mining experience of 120 years with African States so that they do not make the mistakes that we did,” the Premier said.

The agreement with WA was borne of the fact that despite the often spectacular performance of mining in many African economies, the region continues to be the least developed in the world and its people remain the poorest. Further resource rich countries experience high levels of conflict and strife a situation that is described as the “Resource Curse”.

“It is a proven fact that successful resource driven economies have to employ six core elements to benefit from minerals resources,” Mr Ngwenya said.

These are; building the institutions and governance of the resources sector, developing infrastructure, ensuring robust fiscal policy and competitiveness, supporting local content, deciding how to spend a resources windfall wisely and transforming resource wealth into broader economic development.

The agreement with WA acknowledges that institutions that support mineral development in Africa are generally weak due to human skills deficiency and financial constraints and therefore inappropriate to effectively facilitate the role of minerals in development.

Further, the fiscal frameworks have largely been blamed for the failure of Governments in Africa to benefit from the boom in mineral prices during the last decade. In addition, mining expect a fair return based on risks taken while Governments wish to maximize the value of mining investment to fund social and economic infrastructure, as well as other national development priorities.

However, the capacity to negotiate mineral development agreements, and to monitor and regulate the exploitation of mineral resources is highly challenged. This has led to weak policy formulation and implementation, poorly managed regulation of company mining operations and mineral development contracts that do not deliver the full development benefits from mineral resources.

There is also need for research and development capacity in the COMESA region to support beneficiation and value addition to mineral products and the development of linkages and clusters in the sector. This is a key per-requisite for industrialization and the evolution of new products from mineral commodities.

http://www.comesa.int/index.php?option=com_content&view=article&id=1321:comesa-australia-begin-to-implement-agreement&catid=5:latest-news&Itemid=41

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30m Br Ethio-Swiss JV Set to Pilot Plastic Flakes for Export

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-  Production foreseen to create jobs through 604 SMEs to be involved in collection of waste

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The company was established in 2012, with a capital of 104 million Br, by Swiss and Ethiopian owners to recycle plastic products. Over the past two years, it has been producing plastic bottle preforms and closures using Polyethylene terephthalate (PET) – waste plastic bottles – which it recycled at its own plant. The new plant rests on a 5000sqm plot in Kality, Addis Abeba, whereas the existing factory is located in the Hana Mariam area.

Coba has been using up to 1,600kgs of waste plastics a month – supplied in jumbo bags holding 40kgs to 45kgs – for its operations so far. The commencement of the plastic flakes production could push its demand up to 15,000kgs a month, says Gabriel Amara, the Company’s general manager. The new plant has a production capacity of 700kgs of flakes an hour.

The Company has signed a memorandum of understanding with the Addis Abeba City Administration Cleansing Management Agency (AACA CMA) and the East African Bottling Company (EABC) – the maker of Coca Cola – to organise 604 small and micro enterprises (SMEs) to collect and supply waste plastic materials, including bottles.

The agreement made between the parties is a PET recycling project for which the EABC will spend 700,000 Br for the provision of safety materials, such as gloves, mouth masks, push carts and aprons, for the SMEs that will collect the waste plastics materials, said Anteneh Tegegn, the director of EABC’s Human Resources, public relations and legal department.

The EABC proposed combining this project with their Women Empowering Project, said Coba’s recycle head, leading to their involvement within three districts of Addis Abeba.

Coba will provide green bags for organic waste and blue bags for plastic waste. It will buy the plastic waste for three Birr a kilo, increasing the price to 3.60Br when the SMEs start issuing receipts.

The two companies together with the Cleansing Management Agency gave a one day training on solid waste collection to representatives from 604 SMEs on August 20, 2014, at the Hager Feker Theatre. The training addressed effective time usage, discipline, quality materials provision and business development.

The money from the EABC is now being used in the Arada, Lideta and Yeka districts, says Anteneh.

“The program will be continued in other districts and regional towns, such as Hawassa, Bahir Dar, Mekele and Dire Dawa,” Anteneh added.

The challenge to the plastic bottle collection, according to Nigussie Estifanos, collecton department head at Coba, is that bottles come with water, milk and even rocks in them, which exaggerates the weight of the bottles. Coba will resolve this issue through training, he said.

http://addisfortune.net/articles/30m-br-ethio-swiss-jv-set-to-pilot-plastic-flakes-for-export/

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World Bank Extends 4.1b Br Water, Sanitation Loan

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-  The loan will help Ethiopia to achieve the GTP target of 100pc access to safe water

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The Ethiopian One National WASH Program under the WASH Implementation Framework (WIF) has received a 4.1 billion Br loan from the World Bank (WB) to improve access to water, sanitation and hygiene.

The program was launched in September 2013 to modernise water and sanitation services, improve health, decrease school drop-out rate and make financing for WASH more effective, according to Abiy Girma, the One WASH Coordinator at the Ministry of Water, Irrigation and Energy (MoWIE).

The World Bank’s money will be used for the construction of water and sanitation facilities in Ethiopia, excluding Addis Abeba.

“We will construct toilets for health centres, public schools and upgrade our water supply by constructing new water wells,” said Abiy.

The WB already provided five million dollars to the project in January 2014 because of a government push; the five million dollar loan is part of the approved 4.1 billion Br effective from July 2014, according to a source who requested anonymity.

The four line ministries – Ministry of Health (MoH), Ministry of Finance & Economic Development (MoFED), Ministry of Education (MoE) and Ministry of Water, Irrigation & Energy (MoWIE) – are the core actors who signed the Memorandum of Understanding (MoU) on the integrated implementation of a water supply, sanitation and hygiene program in Ethiopia and WASH Implementation Framework in 2013.

“The policy and strategy of the project was designed in 2005 and it passed through many ups and downs because of a lack of commitment from the government’s side,” said the source.

The core policy document of the Ethiopian WASH program, the Universal Access Plan (UAP), aims to achieve 98.5pc and 100pc access to safe water and sanitation, respectively, by 2015.

To implement the project, a taskforce was organised with members from the four ministries, Civil Society Organisations and the DAG Water Technical Working Group,  chaired by Yohannes Gebremedhen, the director of the Water Supply & Sanitation Directorate at the MoWIE.

“The government has gaps in implementing this project. No meeting has been held by the steering committee since the launch of the project and planned regional offices are not yet open,” said the source.

The loan from the World Bank will be provided in four phases for four years, says Abiy.

“We are moving towards implementation after we have secured the money,” he said.

The project was designed for the coordination and implementations of the multi-donor consolidated WASH account, approval of harmonised and integrated annual WASH plans and budgets, coordination of operational WASH structures, preparing harmonised guidelines and core materials for capacity building and facilitating tools and procedures necessary for integrated planning, reporting and monitoring, said Abiy.

This national strategy was launched with the intention to harmonise, align, integrate and accelerate the WASH implementation, in order to achieve the Millennium Development Goals (MDGs) and Growth and Transformation Plan (GTP) targets.

http://addisfortune.net/articles/world-bank-extends-4-1b-br-water-sanitation-loan/

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Alecto update on Ethiopia JV

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Alecto Minerals says it has been formally notified by its joint venture partner Centamin that, following the completion of the recent exploration programme, it will continue to satisfy the initial expenditure commitment at the company’s 945 sq. km. Wayu Boda gold project in Ethiopia.

Under the agreement, Centamin is required to fund exploration costs of US$1.8m over a two year period in order to maintain an initial 51% interest in the project.

The JV agreement also extends to the company’s 1,954 sq. km. Aysid Metekel gold project which is located in the Aysid-Metekel region of north-west Ethiopia. Centamin has already indicated that it will satisfy its initial expenditure commitment for the Aysid-Metekel project of US$1.2m over two years to maintain its initial 51% interest in the Aysid-Metekel project.

Centamin has an option to fund up to a further US$5m of work at the Aysid-Metekel project and US$6m of work at the Wayu Boda project to increase its interest in each of the projects up to 70%.

Alecto chief executive Mark Jones said: “The fact that Centamin would like to continue fulfilling the initial expenditure commitment for the Wayu Boda project of US$1.8m is excellent news and, considering that the results and analysis from their recent exploration programme are yet to be received and assessed in full, we are encouraged by their decision.

“Our positive experience with Centamin, with them already having committed to the initial expenditure commitment for the Aysid-Metekel Project, endorses our company-wide joint venture strategy and provides us with exposure to exploration upside without capital expenditure, and we look forward to providing updates regarding both projects at the appropriate time for both ourselves and Centamin.”

http://www.stockmarketwire.com/article/4885484/Alecto-update-on-Ethiopia-JV.html

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Filed under: Ag Related, Economy, Infrastructure Developments, News Round-up Tagged: Addis Ababa, Agriculture, Business, Economic growth, Ethiopia, Fertilizer, Investment, Millennium Development Goals, Sub-Saharan Africa, United States, World Bank

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FTF’s Jim Barnhart (above, far left) visits Ethiopia’s first fertilizer blending factory, operated by a local cooperative union.

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Ethiopian delegation in Toronto meets founder of Legendary MegaCorp

The Ethiopian delegation met with Hector Reyes, Founder of Legendary MegaCorp on Tuesday (September 16) in Toronto, on the sidelines of Canada-Africa Business Summit and Ethio-Canada Business and Investment Forum.

The Legendary MegaCorp, based in the United States, is a global development firm focusing on the financing, design, building and operation of medium to large-scale infrastructure and development projects in public and private sectors.

Discussion focused on identifying possible areas of business and investment cooperation on the basis of mutual benefit.

Reyes said his company was willing to engage in Ethiopia’s investment and business areas, including education, health, hotel, infrastructure, housing, power and energy, bio-refinery, and the service sector.

The Ethiopian delegation welcomed the company’s readiness to invest in Ethiopia, and promised to provide support.

The meeting was attended by Alemayehu Tegenu, Minister of Water, Irrigation, and Energy; Fitsum Arega, Director General of the Ethiopian Investment Agency; Ambassador Taye Atske-Selassie, Director-General of American Affairs in Ethiopia’s Foreign Ministry; the Ambassador of Canada to Ethiopia and Djibouti, Ambassador David Usher; and the Ambassador of Ethiopia to Canada, Ambassador Birtukan Ayano.

http://www.waltainfo.com/index.php/explore/15031-ethiopian-delegation-in-toronto-meets-founder-of-legendary-megacorp-

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Ethiopia, Russia keen to build economic ties

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Prime Minister Hailemariam Desalegn held talks on Wednesday with Minister of Foreign Affairs of the Russian Federation, Sergey Lavrov.

On the occasion, Prime Minister Hailemariam expressed Ethiopia’s keen interest to build closer economic and investment ties with Russia.

This, he said, would further consolidate the age-old historical and diplomatic relations between the two sisterly nations.

Foreign Minister Lavrov also conveyed Russia’s desire to forge economic cooperation with Ethiopia.

He commended Ethiopia’s positive role in continental and regional affairs.

Foreign Affairs Minister Dr. Tedros Adhanom told reporters after the meeting that Prime Minister Hailemariam and Foreign Minister Lavrov had fruitful discussions.

He said the discussions would help strengthen bilateral relations.

The two countries have agreed to connect Addis Ababa and Moscow with direct flights, Dr. Tedros said.

http://www.waltainfo.com/index.php/editors-pick/15029-ethiopia-russia-keen-to-build-economic-ties-

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and from the Russian MFA….

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THE MINISTRY OF FOREIGN AFFAIRS
OF THE RUSSIAN FEDERATION
official site

Comment by the MFA Information and Press Department on Foreign Minister Sergey Lavrov’s visit to Ethiopia

On 17 September Foreign Minister Sergey Lavrov will pay a working visit to the Federal Democratic Republic of Ethiopia. He will hold talks with Prime Minister Hailemariam Desalegn and his Ethiopian counterpart Tedros Adhanom in Addis Ababa.

The sides will pay special attention to discussing the development of mutually beneficial and multifaceted relations between Russia and Ethiopia, our long-time partner in Africa. Among the issues to be discussed is also trade, economic and investment cooperation, in particular, the implementation of major joint projects on energy, hydrocarbon production, agriculture and transport infrastructure in Ethiopia, and assistance in the training of Ethiopian personnel. The sides will also review further steps on improving the bilateral contractual and legal foundation.

They will also focus on key international issues, the situation in different African regions and the prevention and resolution of crises.

In Addis Ababa, Mr Lavrov will also meet with Chairperson of the African Union Commission, Nkosazana Dlamini Zuma. They will discuss ways of promoting cooperation between Russia and the Union, in particular, on urgent international and regional issues. The sides will exchange views on the situation in Africa’s hot spots, primarily Mali, the Saharan-Sahel region, the Democratic Republic of the Congo, the African Great Lakes, and Somalia.

The sides will sign a memorandum of mutual understanding on the mechanism of political consultations between the Russian Foreign Ministry and the African Union Commission. They will also concentrate on discussing prospects of Russian-African trade and economic cooperation, with an emphasis on creating favourable conditions for investment activities of Russian companies.

http://mid.ru/brp_4.nsf/0/2E51A26403825D0D44257D550052A731

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Al Ghurair Group to set up aluminum factory

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Al Ghurair Group, UAE-based business group is going to set up an aluminum factory with 50 million USD jointly with Tracon Trading, a local company.

After discussing with President Dr. Mulatu Teshome, owner of the Group, Majid Saif Al Ghurair told reporters that preparation has finalized and operation will commence in the near future.

Previously, the Group has been supplying aluminum to Ethiopia jointly with Tracon Trading, he said.

The government has decided to provide 25,000 hectares land, of the total 60,000 hectares land needed for the project for the time being, he said.

The factory would help to satisfy the local demand for aluminum and export to Eastern African countries, according to Elias Nur Tracon Trading Deputy Manager.

The factory is expected to commence operation within a year, Elias said.

President Dr. Mulatu Teshome affirmed that the government will provide support for speedy operationalization of the factory, according to a high level official who attended the meeting.

He expressed his expectation that the knowledge and expertise of the Group will help to improve human resource in Ethiopia and enter global market.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2284:al-ghurair-group-to-set-up-aluminum-factory&Itemid=260

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 New information service revolutionizes agricultural extension in Ethiopia

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A new information hotline is giving smallholder farmers across Ethiopia access to best practice agronomic advice revolutionizing traditional agricultural extension.

In collaboration with the Ministry of Agriculture (MoA), the Ethiopian Institute of Agricultural Research (EIAR), and Ethio Telecom, the 8028 hotline was created by the Ethiopian Agricultural Transformation Agency (ATA), who placed the extension information typically provided to agricultural Development Agents directly on a technology platform that can be accessed by anyone at any time.

Twelve weeks after its launch in the Oromia, Amhara, Tigray and SNNP regions, the hotline has received nearly 1.5 million calls from 300,000 farmers.

The Interactive Voice Response (IVR)/Short Message Service (SMS) system currently provides smallholder farmers free access to information on cereal, horticulture, and pulse/oil seed crops, as well as a wide range of agriculture-related activities.

Currently 90 service lines connect smallholder farmers to automated and voice-recorded information on pre-planting, planting, crop protection, post-harvest, fertilizer application, processing, irrigation and weather content.

A push-based voice and SMS alert system also notifies extension workers and smallholder farmers of any pertinent agriculture issues.

Khalid Bomba, Chief Executive Officer, ATA, attributed the success of 8028 to the unique two-way functionality of the service, “Farmers can “pull” practical, real-time advice available in their regional language by calling 8028 as often as they like.

At the same time the hotline administrator can “push” customized content (such as in cases of drought, pest and disease) to callers based on crop, geographic or demographic data captured when farmers first register to use the system. For example, there is currently a concern about the possibility of wheat rust in certain parts of Ethiopia. With this IVR system,

we have been able to send voice recorded messages to all wheat farmers registered on the system about strategies that they can use to minimize the impact of wheat rust on their crops.”

“The mandate of the ATA is to support the implementation of targeted interventions that will have an immediate impact on the agriculture sector. With over 35,000 calls made daily to 8028, this initiative is one of several interventions in the Agricultural Transformation Agenda that is having a quantifiable impact in assisting smallholder farmers every day,” said Ato Khalid.

Tefera Derbew, Ethiopian Minister of Agriculture, is delighted with the popularity of the hotline, “Many smallholder farmers are benefiting significantly from this new service which gives them information they would otherwise have only got through extension workers, whom they may only meet with periodically. With this system farmers can access the information they need at their convenience and as often as necessary.”

“The IVR system offers users information relevant to the key cereals and high value crops, but I envisage that in the near future there will be the opportunity to upscale the service to include content relevant to all of the major agricultural commodities in the country, including livestock,” he said.
Andualem Admassie, Chief Executive Officer, Ethio Telecom, remarked that development of the hotline presented a unique opportunity for three distinguished organizations to work collaboratively for the benefit of Ethiopia. “This is a landmark initiative and one that has tangible benefits for farmers and their communities. Ethio Telecom is proud to be part of this project and assist where there is a real need in our country,” said Andualem.

Additional support from the ATA’s development partners, The Royal Netherlands Embassy, and the Department of Foreign Affairs, Trade and Development (DFATD) Canada, was critical to the success of the project.

“The 8028 information service is the first initiative of its kind in Ethiopia,” stated Lidi Remmelzwaal, The Netherlands’ Ambassador to Ethiopia. “That it received 1,000,000 calls during two months of operation is indicative of the project’s impact potential on the country’s agriculture community in the months to come.”

David Usher, Canadian Ambassador to Ethiopia added, “The content made available through this project is vital in assisting Ethiopia’s farmers to maximize productivity, improve income earning potential and transform livelihoods.”

The ATA is currently working with the Ministry of Agriculture, Ethio Telecom and other partners to scale up the initiative. Plans are underway for the deployment of a further 30 service lines and expansion of the hotline content to cover all aspects of agricultural information pertinent to Ethiopia’s smallholder famers.

http://www.waltainfo.com/index.php/explore/15033-new-information-service-revolutionizes-agricultural-extension-in-Ethiopia

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Tired soils put future food availability at risk

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The increasing degradation of earth’s peak soil through over cultivation and nutrient mining is putting pressure on food production with researchers warning that by 2050 agricultural production will dip by up to 30 percent even as population is expected to hit 9.6 billion, up from 7.2 billion last year.

This is already becoming evident in Sub Saharan Africa where soil degradation has hit unprecedented highs.
In East Africa, One of the most comprehensive studies on soils ever undertaken has confirmed that farming practices have leeched the soil of nutrients without replenishing them, to such a degree as to be halving many key crop yields, threatening the income and food security of over 85 per cent of East Africans.

Measuring the organic and mineral content of the soils, the researchers found that the levels of important soil minerals that sustain plant growth were low, and that the little fertility left was mainly from topsoil organic matter.
The researchers said the problem was made more severe in that East Africa has one of the lowest rates of fertilizer use in the world and a rapidly increasing population to feed.

The barren soils are the result of years of farming with insufficient replacement of nutrients by small-holders, mostly practising low-input agriculture. But the results now threaten future farming and the food and income of millions of people in the region.

“We know far more about the amount of oil there is globally and how long those stocks will last than we know about how much soil there is,” said John Crawford, Director of the Sustainable Systems Programme in Rothamsted Research in England in an earlier interview.

Demand for food and natural resources has led to aggressive soil mining and aggressive cultivation with overgrazing, and deforestation stripping the top soil of vital nutrients and beneficial organisms while reducing the soil’s ability to hold water.

According to Food and Agriculture Organization (FAO), 25 percent of agricultural land is highly degraded, while a further 8 percent is moderately degraded.

“If we keep treating our soil the way we do, we will have to convert about 70 percent of the earth’s surface into agriculture to meet demand for food by 2050 (from about 40 percent now),” Crawford said.
Emerging nations are also embracing Western diets that include more consumption of meat, which will add further to the strain on agricultural resources.

Food security became a hot topic after record high grain prices in 2008 marked the start of a period of volatility.
Agricultural markets are still unstable, after near-record prices in 2012 prompted increased production, which led to surplus.

http://farmbizafrica.com/index.php?option=com_content&view=article&id=1240:tired-soils-put-future-food-availability-at-risk&catid=20:crop-types&Itemid=142

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WB to assist Ethiopia’s industrial development

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World Bank will further continue to extend assistance to Ethiopia’s efforts in industrial development, the Managing Director, Sri Mulyani Indrawati, said.

After visiting the Bole Lemi industry zone, the Director said WB will continue to extend assistance in particular to the industrial development efforts of the country.

World Bank is preparing to support the second industry zone to be built at the Bole Lemi site.

The Director said the industry zones Ethiopia has built over the past years demonstrate the fact that the country is in the right development track.

She lauded the country’s efforts to transform the country’s agriculture-led economy into industry-led development.

Industry Minister Ahmed Abitew explained that the country recognizes the benefit for industries to be in the same area.

Factories being built at the industry zone are going to be finalized soon, he added.

http://www.ertagov.com/news/component/k2/item/3167-wb-to-assist-ethiopia’s-industrial-development.html

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VECOD launches second phase civil society project

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Vision Ethiopia Congress For Democracy (VECOD), local charity organization, launched the second phase civil society project in three states and Addis Ababa City Administration aimed at creating open-eyed society and consolidating democracy through constructive discourse and civic engagement.

The project is a joint venture Ethiopia-European Civil Society Fund II here in the capital.

VECOD Executive Director Tadele Derseh said: “Ethiopia has abundant resource and human power which require effective and wise mobilization in democratic manner for the good of the nation. In this regard, the organization is jointly working with various governmental institutions and development partners to support the realization of the national development objectives.”

Project Director Bezawit Wondesen on her part said the project is expected to raise citizens active participation in the democratization process and sustaining the rapid economic growth afoot. It would also contribute to raise awareness on civic education, democracy, human rights, good governance and the nation’s Constitution.

Ethiopian Human Rights Commission Human Rights Protection & Monitoring Directorate Director Mitiku Mekonnen also said: “As the government is committed to elevate the civic society participation at large, citizens across the nation are expected to exercise their rights using the project as an opportunity.”

Ethiopia-European Civil Society Fund II Project Grant Officer Frew Behabtu said: “We need the project be realized in the respective states to promote human rights, democracy, good governance and civic education meaningfully.”

Amhara, Gambella, Benshangul Gumuz,Addis Ababa are where the project will be effected in three woredas in each state and the city administration.

Coordinators from each state assured VECOD that they would work vigorously with community leaders at grassroots level for the good of the citizens. The project would be active for 18 -22 months.

http://www.waltainfo.com/index.php/explore/15020-vecod-launches-second-phase-civil-society-project

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Ethiopia exporting 170 MW power to neighboring countries

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The Ethiopian Electric Service (EES), a company leading the service delivery, said the nation is currently exporting 170 megawatts (MW) hydro-power to neighboring countries.

Sudan, Djibouti and Kenya are the three countries being provided with 100MW, 60MW and 10MW of electricity respectively, EES Executive Officer, Biteweded Gebrealif, told WIC.

Ethiopia’s current cumulative power generation capacity stands at 2, 370 megawatts, which according to the Officer is enough to meet the national demand.

The power disconnection that occurs in the country is not because of power shortage but it is due to problems in the installation of power carrying grids, he said.

The power is being exported at night, a time with no peak power requirements, and on the basis of a program designed not to jeopardize local consumption, he indicated.

In addition to generating foreign currency, the power export would further cement Ethiopia’s economic ties with neighboring countries, according to Biteweded.

Ethiopia began export of energy to Djibouti in May 2011 and Sudan in November 2012.

Ethiopia has the capacity to generate 45,000 MW from hydro, 10,000 MW from Wind and 5000 from geothermal.

http://www.waltainfo.com/index.php/explore/15022-ethiopia-exporting-170-mw-power-to-neighboring-countries

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Filed under: Ag Related, Economy, Infrastructure Developments, News Round-up Tagged: Agriculture, Allana Potash, Business, East Africa, Economic growth, Ethiopia, Fertilizer, Investment, Millennium Development Goals, Potash, Sub-Saharan Africa, tag1, World Bank group

Boeing, Ethiopian Airlines Announce Order for 20 737 MAX 8s

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- Order is the largest single Boeing order by number of airplanes from an African carrier

CHICAGO, Sept. 20, 2014 /PRNewswire/ — Boeing [NYSE: BA] and Ethiopian Airlines today announced an order for 20 737 MAX 8s. The order, previously unidentified on the Boeing Orders & Deliveries website, is worth more than $2.1 billion at list prices and also includes options and purchase rights for a further 15 737 MAX 8s. The order represents the largest single Boeing order by number of airplanes from an African carrier.

“Today’s order underlines our commitment to our 15-year strategic plan, ‘Vision 2025′, in which Ethiopian will strive to become the leading airline group in Africa carrying 18 million passengers per annum,” said Tewolde Gebremariam, CEO of Ethiopian Airlines, during a visit to the Association for the Promotion of Tourism to Africa National Forum in Chicago. “The 737 MAX will form a key component of that strategic vision, enhancing our single-aisle fleet and keeping us at the forefront of African aviation.”

The 737 MAX incorporates the latest technology CFM International LEAP-1B engines, Advanced Technology winglets and other improvements to deliver the highest efficiency, reliability and passenger comfort in the single-aisle market. The 737 MAX will be 14 percent more fuel-efficient than today’s most efficient Next-Generation 737s – and 20 percent better than the original Next-Generation 737s when they first entered service. The 737 MAX has a total of 2,294 orders from 47 customers worldwide.

“This historic order for Boeing and our partner Ethiopian once again positions the carrier at the heart of African aerospace innovation with the acquisition of the 737 MAX,” said Van Rex Gallard, vice president of Sales for Latin America, Africa and the Caribbean, Boeing Commercial Airplanes, speaking in Chicago. “Throughout the years, Ethiopian has consistently led the way in introducing new airplane types to passengers across Africa. Today’s record order signals its commitment to continue that tradition.”

Ethiopian currently serves more than 83 destinations across five continents from its base at Bole International Airport in the Ethiopian capital, Addis Ababa. The Ethiopian flag carrier’s partnership with Boeing has existed for more than half a century, with a current fleet of more than 50 Boeing airplanes that includes Next-Generation 737s, 757s, 767s, 777s, 787 Dreamliners and a cargo fleet of 757s, 777 Freighters and MD-11s.

http://boeing.mediaroom.com/2014-09-20-Boeing-Ethiopian-Airlines-Announce-Order-for-20-737-MAX-8s#assets_117

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Government suspends nation’s largest Turkish Industrial Zone project

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The Ethiopian government has suspended the multibillion dollar Ethio-Turkish industrial zone development project being undertaken on the outskirts of Addis Ababa near Sendafa town due a potential threat posed at the Legedadi Dam and Water Treatment Plant as a result of the construction of the industrial zone. 

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Al-Amoudi to Invest $500 Million in Ethiopian Coffee, Oranges

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By William Davison Sep 21, 2014

Horizon Plantations Ethiopia Plc, majority-owned by Saudi billionaire Mohamed al-Amoudi, plans to almost double annual revenue within three years by investing at least $500 million in coffee and orange projects.

The agriculture company will train workers, improve roads and replace washing units at the Limmu and Bebeka coffee plantations, which together have over 18,000 hectares (44,479 acres) under coffee, General Operations Director Kemal Mohammed said in a Sept. 17 interview in Addis Ababa, Ethiopia’s capital. The development is part of a five-year program to invest in projects that also include Upper Awash Agro-Industry Enterprise, the country’s largest orange grower with 1,200 hectares of citrus, he said.

“We are sure because of the initiatives we have now, because of the inputs and techniques we’re applying, the productivity will increase to the maximum at the end of the five years,” Kemal said.

Ethiopia, Africa’s biggest coffee producer, may see earnings from shipments of Arabica coffee rise 25 percent to about $900 million in 2014-2015 as prices rise because of shortage caused by a drought in Brazil, an exporters’ association said last month. Horizon bought the two coffee farms for 1.6 billion birr ($80 million) last year from the Ethiopian government, which is seeking investment in projects that process agricultural products.

Horizon has a sales target of 500 million Ethiopian birr by 2017, Kemal said.

Bebeka, in southwest Ethiopia, is the world’s biggest unfragmented coffee estate with 10,030 hectares under plantation, according to the company’s website. Limmu, 350 kilometers (218 miles) southwest of Addis Ababa in the Oromia region, has 8,000 hectares under coffee and produces 5,000 tons a year of the beans.

Foreign Investor

Al-Amoudi, born in Ethiopia in 1946 to an Ethiopian mother and Saudi father, is one of the country’s largest foreign investors and operates its biggest cement factory and only large-scale gold mine. He also runs construction and oil operations in Saudi Arabia, Sweden and Morocco and is the 143rd richest person in the world with a net worth of $8.6 billion, according to the Bloomberg Billionaires Index.

Investment in Limmu may help double production to about 1.5 tons a hectare by 2018, Kemal said.

Bebeka Coffee Estate doubled production to about 1.4 tons of coffee last year, according to Kemal. Around 90 percent of the company’s coffee last year was directly sold to buyers in countries including the U.S., Germany, South Korea and Japan, Kemal said.

Horizon, which is part of al-Amoudi’s Midroc group of companies, is looking for a foreign partner to invest in the Coffee Processing and Warehouse Enterprise on the outskirts of the capital. The plant was bought from the government last year for 228 million birr, Kemal said.

“We need very good, genuine partners who can work with us and support us” to make competitive processed and packaged coffee, he said. “To penetrate the foreign markets is not an easy task.”

To contact the reporter on this story: William Davison in Addis Ababa at wdavison3@bloomberg.net

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net John Bowker, Randall Hackley

http://www.bloomberg.com/news/2014-09-21/al-amoudi-to-invest-500-million-in-ethiopian-coffee-oranges.html

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Ethiopia Prepared to Launch an Urban Land Information System

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The Ministry of Urban Development, Housing and Construction (MUDHCo) is about to launch the implementation of Urban Land Information System project. One of the objectives of the Ministry of Urban Development, Housing and Construction (MUDHCo) is to curb the problems of mismanagement and increase the real pension in urban areas through the establishment of the Cadastre and Real Property Registration System.

The assessment of the existing situation clearly shows that the data formats used to store the cadastral and real property records as well as the data models are not consistent enough to make integration of the data at regional and federal level and that there is no clear definition of when and which data format is applicable. Moreover, the lack of well trained personnel to carry out cadastral and real property registration activities is another characteristic of the existing system.

In July 2014, the international Consortium led by IGN France International was awarded a 2 year contract for monitoring the implementation of the Cadastral and Real Property Information System. IGN France and GeoMark Plc are also involved in the consortium.

The main objective of the project is to assist and support the MUDHCo in successfully accomplishing the design, development and deployment of the Cadastral and Real Property Information System through this supervision project. The activities taken in charge by the consortium include the following tasks:

• Achievement of the system development specifications
• elaboration of the standards
• gathering and formalisation of user requirements
• elaboration of general system architecture
• supervision of system development and deployment
• training and capacity building activities implementation

The system will be deployed in six pilot regions (Addis Ababa, Harar, Oromia, SNNP, Amhara, and Tigray). In the perspective of land and real estate property management with up-to-date technologies, the MUDHCo will ensure the implemented system is reliable, effective, secure and easy for use.

It is interesting to remind that in the recent years, IGN France International has successfully implemented large land administration projects in Latin America and Africa. Its latest reference was in Uganda with the implementation of the DeSILISoR (Design, Supply, Installation, Implementation of the Land Information System and Securing of Land Records) project, whose goal is to secure property titles through the development of a land information system and the establishment of a National Land Information Centre.

About IGN France International

IGN France International, created in 1986, is an international subsidiary of the French IGN (National Institute of Geographic and Forest Information). Over the years, the company has shown itself to be a major player in both of its sectors of operations: geographic information (acquisition, processing, and modeling) and geographic information systems (design, implementation and integration). It works on all types of projects in the following fields: mapping, cadastre and land administration, urban planning, energy, environment, risk management, water, security/precision work, agriculture.
Find out more about IGN France International’s projects by visiting www.ignfi.com

About GeoMark Systems Plc

Since its inception in 2004, GeoMark Systems Plc —Ethiopia’s lead in the geospatial domain using state of art geospatial technologies in the implementation, consulting, developing and delivering solutions for municipalities, governmental as well as non-governmental offices and institutions. It is a key member of the five sister companies and benefits a resource of over 75 employees of professional GIS, ICT, surveyor, planners, geographers, engineers, management personnel, etc. GeoMark has demonstrated excellence in all aspects of spatial data systems leveraging a combined skill set in GIS and data acquisition, system design and integration, application development, infrastructure and utility design, regional & urban planning, urban management, multifaceted trainings, etc.

Find out more about GeoMark Systems Plc’s projects by visiting www.geomarksystems.com/

https://www.sensorsandsystems.com/news/top-stories/corporate-news/34918-ethiopia-prepared-to-launch-an-urban-land-information-system.html

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Ethiopia to host energy, water financing forum

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A shared commitment to promote microfinance as an instrument against poverty and hunger has led a network of 15 African microfinance institutions and the UN’s capital investment agency to stage a joint forum on energy and water financing next month in Ethiopia.

‘Innovation in clean energy and water access through microfinance’ is the theme of an event to be hosted by the Participatory Microfinance Group for Africa (PAMIGA) and the UN Capital Development Fund (UNCDF) in Addis Ababa on 30-31 October 2014.

The forum has been formally announced on Friday by PAMIGA’s Chief Executive Officer, Renée Chao-Béroff, and UNCDF’s newly-appointed Executive Secretary, Judith Karl.

It will combine two annual events: PAMIGA’s Expert Meeting on lessons learned from Africa to improve access to clean energy and water through microfinance, and UNCDF’s CleanStart Connect 2014 which unites leading energy and financial service providers, investors, policy makers and development partners to advance practical solutions to reducing energy poverty.

According to Ms Chao-Béroff, the event will incubate new ideas in microfinancing and guide actors involved in increasing access for financially-excluded populations to clean energy and water services.

“We’ve developed what we hope will be a thought-provoking and inspiring two-day programme to stimulate debate and share learning about good practices in financing, including by examining PAMIGA pilot studies in different parts of Africa,” Ms Chao-Béroff said.

Speaking in Addis Ababa during her first official visit to Africa, Ms Karl welcomed the collaboration with PAMIGA through UNCDF’s global CleanStart programme.

“The field of energy access is evolving quickly with exciting solutions being tested, many of which will be discussed at the forthcoming forum in Addis Ababa. It is through partnerships like this with PAMIGA that UNCDF can be at the forefront of supporting the widespread uptake of viable clean energy options for off-grid populations in Asia and Africa,” Ms Karl said.

Among the topics to be covered are consumer financing models – through microfinance, pay-as-go models and village electrification – as well as last mile solutions, impact investment for scaling up and impact measurement.

Around 100 delegates from Africa, Asia, Europe and North America are expected, representing financial institutions, energy and water suppliers, governments, non-governmental organizations and other development partners.

http://www.ertagov.com/news/component/k2/item/3215-ethiopia-to-host-energy-water-financing-forum.html

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Nation to establish enterprise to coordinate textiles sector

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Textiles Industry Development Institute announced plan to set up a national enterprise aimed at addressing challenges related to shortage of raw material supply.

Institute Director-General, Sileshi Lemma, said that the Enterprise will help create linkage between cotton producers and textile industries.

The Enterprise will have the mandate to purchase, sell and store raw cotton, according to the Director-General.

This will help realize the country’s plan to make the nation a preferable destination for textile companies.

He said the country is cultivating cotton on more than 125,000 hectares of land to meet the increasing demand for cotton which reaches over 100,000 tons, he said.

According to Sileshi, the number of companies engaged in the textile industry has been increasing.

18 new factories and 7 expansions are expected to commence operation this year.

In addition to this, 10 garment factories have already finalized preparation to be operational this year.

By improving capability of industries, increasing input supply and skilled labor, the country envisages to earn 435 million USD from the industry this fiscal year, Sileshi said.

If the nation achieves the target for this year, the revenue would increase by 323 million USD compared to that of the previous year.

http://www.ertagov.com/news/component/k2/item/3209-nation-to-establish-enterprise-to-coordinate-textiles-sector.html

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Turkish firm declared top textile exporter in Ethiopia

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Turkish textile company Ayka Addis Textile has been declared the top textile and garment export performer in Ethiopia for the 2013-2014 season, Ethiopia’s Textile Industry Development Institute has said. 

“At least $63 million of the total $111.45-million textile export revenue recorded in Ethiopia was earned by Ayka Addis during the reported period,” Bantihun Gessesse, the institute’s communications director, told Anadolu Agency.

“Products were exported mainly to Germany, Turkey, China, Italy and the U.S., among others,” he said.

Germany stands first in terms of importing Ethiopian textile products, followed by Turkey and China, according to Gessesse.

He added that this year’s total export revenues represented 31.8 percent of the national $350 million target for total textile exports for the same period.

Failure to meet the target, he said, was the result of shortages and low-quality cotton supplies, leadership capacity limitations, low productivity, delays in the construction of projects and shortages of electricity.

Established in 2010, Ayka Addis built its factory in Ethiopia at a cost of $140 million at Alemgena, located some 20 kilometers west of Addis Ababa.

The company has since created more than 10,000 jobs and now has the capacity to export textile products worth $100 million annually, according to the Ethiopian Investment Agency.

http://www.waltainfo.com/index.php/explore/15082-turkish-firm-declared-top-textile-exporter-in-ethiopia

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Nation plants over 4bln seedlings

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Some 4.2 billion seedlings were planted during the 2006 E.C rainy season, said Ethiopian Ministry for Environment and Forestry.

Forestry Sector State Minister, Kebede Yimam, said that the plantation was carried out across the country in collaboration with regional states.

More than 11 million people have participated in the program which was carried out in depleted areas and taking into account ecological issues, he said.

According to him, some 14.5 million hectares of land were covered with seedlings from 2003-2005 Ethiopian fiscal year.

The plan was to cover 11.5 million hectares.

The State Minister further indicated that an integrated national forest census was launched last February so as to know the current forest cover in Ethiopia.

Some 30 percent of the inventory process has so far been completed. The census will be finalized by the coming June, he added.

The country has been planting trees in millions since the Ethiopian millennium to increase the forest coverage, it was learnt.

http://www.ertagov.com/news/component/k2/item/3204-nation-plants-over-4bln-seedlings.html

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Mines Minister meets Canada’s Minister of International Development

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Ethiopia’s Minister of Mines, Tolessa Shagi, met with Mr. Christian Paradis, Canada’s Minister of International Development and La Francophonie, on Thursday in Toronto.

Discussions covered issues related to Ethiopia’s emerging mining sector, including sharing technology, expertise and knowledge and institutional and human resource development, with the aim of cementing and advancing the need for a growing cooperative partnership between the two nations.

Minister Tolessa said that Ethio-Canada ties in mining sector were gaining momentum.

He appreciated Canada’s continued technical assistance to mining sector development, and praised Canadian companies’ business culture, which he described as a valuable asset for future development of Ethio-Canada ties.

Minister Tolessa called on Canadian companies to take advantage of the unprecedented opportunities in Ethiopia’s emerging mining sector, and said Ethiopia was committed to write a new chapter of cooperation with Canadian firms for the mutual benefit of all.

Mr. Paradis emphasized that Canada was ready to support Ethiopia in mining sector development, and he noted Ethiopia could draw lessons and best practices from Canada’s experience.

He emphasized that Canada was keen to support Ethiopia’s efforts in natural resource development and underlined that Ethiopia was one of Canada’s Focus Countries in seeking common development.

After his talks with Minister Tolessa, Mr. Paradis announced that Canada would contribute $12.5 million to strengthen mining education in Ethiopia.

http://www.ertagov.com/news/component/k2/item/3188-mines’-minister-meets-canada’s-minister-of-int’l-dev’t.html

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 350 million Birr factory to produce brake rubber by midyear

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Prime Minister Hailemariam holds talks with President Obama

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Prime Minister Hailemariam Desalegn and President Barack Obama held bilateral talks on the sidelines of the 69th Session of the UN General Assembly on Thursday in New York.

Discussions covered issues related to the cooperative partnership of the two countries in various spheres of common interest and the importance of elevating the existing bilateral ties to a new high in all fronts for the benefit of all.

Prime Minister Hailemariam noted the excellent relations between Ethiopia and the United States.

He emphasized that Ethiopia attached special importance to its relations with the United States.

The Prime Minister, who extended his thanks to the United States for its support to Ethiopia’s development activities, said Ethiopia “is moving, transforming the economy.”

He added that the numerous development programs of the United States in Ethiopia were valuable assets for the country and played a significant role in its current economic growth and in agriculture, the major driving force of the country’s economic growth.

He also welcomed the role of the United States in helping Ethiopia engage the private sector, describing the Power Africa program as “a remarkable and modern kind of approach,” and emphasizing Ethiopia was committed to advance its objectives.

He also noted that the United States’ Alliance for Food Security and Nutrition program coupled with the positive engagement of U.S. investors in agricultural production was instrumental in making strides in the agriculture sector and transforming the livelihoods of Ethiopia’s smallholder farmers.

He indicated that the Ethio-US partnership in peace and security was a key factor for peace and security in the Horn of Africa and in Africa, saying that this should be deepened and expanded.

President Obama extended a warm welcome to Prime Minister Hailemariam and his delegation and said “there’s no better example than what has been happening in Ethiopia – one of the fastest growing economies in the world.”

He noted tremendous progress was a defining element of today’s Ethiopia “that once had great difficulty feeding itself. It is now not only leading the pack in terms of agricultural production in the region, but will soon be an exporter potentially not just of agriculture, but also power because of the development that’s been taking place there.”

He said the United States was very “appreciative” of Ethiopia’s efforts in safeguarding peace and security and resolving conflicts, adding “Ethiopia may be one of the best in the world – one of the largest contributors of peacekeeping; one of the most effective fighting forces when it comes to being placed in some very difficult situations and helping to resolve conflicts.”

He appreciated the role played by Ethiopia in helping the two warring parties find a lasting political solution and resolve the crisis in South Sudan, and commended Ethiopia’s support and cooperation in dislodging Al-Shabaab from Somalia.

President Obama, who noted the strong trade ties between the two countries, also underscored that the United States was ready to initiate a new chapter of strategic dialogue and partnership on various issues, including health, the economy and agriculture.

He affirmed that the United States was committed to continue its constructive engagement with Ethiopia.

http://www.ertagov.com/news/component/k2/item/3253-prime-minister-hailemariam-holds-talks-with-president-obama.html

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MIDROC to build gold extraction plant with $250 million

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MIDROC Gold Plc. announced that it would construct its second gold extraction plant with an outlay of 250 million USD in Benshangul Gumuz Regional State.

The exploration work at Gilay locality in Bulen Woreda in the state took 10 years, it was indicated.

MIDROC Gold Project Director, Abiy Setargachew, said the exploration carried out on 4,000 square kilometers has proved that there is a huge gold deposit in the locality. The deposit could last some 10 years, he said.

Abiy stated that the plan is to divert the 5 to 6MW electric power required for the plant from Gilgel Beles Power Generating Dam.

The company has spent quarter a billion Birr for exploration work and created 250 jobs, he said.

Chief Administrator of Benshangul Gumuz Regional State, Ahmed Nasser, for his part said the plant would have significant economic benefits for the region and the country.

The government and people of the state would continue providing all the necessary support for this project as well as other similar investments, he added.

MIDROC Ethiopia Technology Group has a gold extraction plant at Shakisso, Oromiya Regional State.

http://www.ertagov.com/news/component/k2/item/3241-midroc-to-build-gold-extraction-plant-with-$250m.html

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UPDATE – KEFI copper bottoms Ethiopia gold project; will apply for mining licence next month

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Men at work: The plan is to mine 13mln tonnes of ore to unearth 925,000 ounces of gold over Tulu Kapi’s ten-and-a-half year life at a processed grade of 2.4 grams per tonne.

KEFI Minerals (LON:KEFI) has copper-bottomed the Tulu Kapi gold project in Ethiopia by securing independent verification of its mine plan and will ‘re-activate’ its mining licence application next month.

The respected Snowden Mining Industry Consultants provided the sign-off at a higher than previously slated annual production of 86,000 ounces (2,000 ounces more than previously forecast).

The plan is to mine 13mln tonnes of ore to unearth 925,000 ounces of gold over Tulu Kapi’s ten-and-a-half year life at a processed grade of 2.4 grams per tonne.

KEFI managing director Jeff Rayner said: “We are pleased to report the independent verification of our mine plan, which includes an increased production target that further improves expected project economics.

“This confirms our expectation of reactivating the mining licence application for Tulu Kapi in October.

“Following the recent finalisation of the mineral resource, we now are able to complete other project planning parameters, commencing with the optimised pit design, mining rate and head grade.”

In the coming weeks KEFI said it expect to report further milestones, including independently verified project cost estimates and the ore reserves for the project.

At the same time, it is working on securing project financing.

“As a result, we are confident of advancing to the development stage in the first half of next year.”

The shares rose 9% to 1.55p in early trade, although broker finnCap reckons the stock is worth 5.7p.

Analyst Mark Heyhoe is looking to the next milestones. “The capex, all-in production costs and reserves are currently being independently verified and should be announced in early October,” he said.

http://www.proactiveinvestors.co.uk/companies/news/72549/update-kefi-copper-bottoms-ethiopia-gold-project-will-apply-for-mining-licence-next-month-72549.html

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State Minister Dewano confers with Turkish Business delegation

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State Minister for Foreign Affairs, Dewano Kedir, held talks with a Turkish business delegation on Friday.

The State Minister welcomed the delegation and briefed it on the business and investment opportunities available in Ethiopia.

He said the most important areas on which to focus were agriculture, food processing, leather and leather products, textile and agro-processing and related areas.

He expressed the full support of the Government for those who are interested to invest in the country.

Ethiopian Investment Commissioner, Fitsum Arega, detailed the Government’s policies and strategies, and noted the incentives, tax-holidays, regulations and legal frameworks for foreign and domestic investors.

He said there was trainable manpower, abundant land, energy resources and sufficient power production, a stable government and peace and security in Ethiopia.

The delegation’s members appreciated the Government’s commitments and its efforts to transform the country through strong leadership.

They said they had interest in the areas of agriculture, livestock farming, textile, glass production, furniture making, construction industry, fertilizer manufacturing, as well as fabric and garment production.

They said they would be prepared to transfer to Ethiopia their experience, technology and knowledge for their different areas of specialization.

http://www.ertagov.com/news/component/k2/item/3256-state-minister-dewano-confers-with-turkish-business-delegation.html

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Turkish investment in Ethiopia exceeds $3 billion

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Turkish investors with over 3 billion USD capital are engaged in various sectors in Ethiopia, the country’s Ambassador to Ethiopia disclosed.

This makes Turkish businesspersons the leading foreign investors in Ethiopia in terms of capital volume, it was learned.

Ambassador Osman Riza Yavuzalp said in an interview with ENA that most of the investors are engaged in textile and construction sectors.

The ambassador said the railway to be built from Awash to Woldiya by the Turkish company Yapi Merkezi will create more than 10,000 jobs.

Other Turkish companies are also keen to invest in Ethiopia, according to the ambassador.

He said huge human resources of the country, peace and stability, conducive policy and broad market alternatives are the factors that have contributed to the increasing number of investors.

In addition to the sectors they are engaged in, the investors have the desire to invest in power generation, food processing and the manufacturing sector, the priority areas of the government, Ambassador Yavuzalp stated.

He further indicated that the investors who have created over 50,000 jobs for more Ethiopians are also playing significant role in transfer of skill and technology.

The ambassador recalled the vivid role the current Ethiopian President Mulatu Teshome played in making Ethiopia the investment destination of Turkish businesspersons.

According to the ambassador, the trade exchange between the two countries has jumped over 400 million USD.

Ethiopia imports machinery, metals, plastic products, drugs and factory products while exporting oilseeds, fruits and vegetables, cereals and textile.

The two countries would work together in climate change, fighting terrorism and other international issues, Ambassador Yavuzalp said.

http://www.ertagov.com/news/component/k2/item/3240-turkish-investment-in-ethiopia-exceeds-$3b.html

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US agriculture giant Dow AgroSciences to grow Africa footprint

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US crop protection products and technology manufacturer Dow AgroSciences is expanding its presence in Africa to tap into the continent’s potential in agriculture. Dow previously operated in a handful of African countries through distributors, but is now hiring local teams and launching in markets it lacked a presence.

Dow AgroSciences produces a wide range of products for crop protection, pest control, vegetation management and crop-enhancing traits. The company has operations globally and made sales of US$7.1bn last year.

Jean Francois Rolland, portfolio manager for Africa at Dow AgroSciences, says the company is making “a very substantial increase of resources” in high growth potential countries such as Ghana, Cote d’Ivoire, Ethiopia, Egypt, Morocco, Tunisia, Kenya and Tanzania.

“This is an important market for us because, as opposed to European markets which are mature, the African markets are still developing and there are opportunities for further growth.”

Improving yields, quality

He adds: “We look at Africa as a place where there are lots of crops for which the yields and quality can be improved. Farmers need sophisticated ways to tackle insect control. So we will invest more because we see agriculture as a driver in their economies.”

Dow AgroSciences is a wholly-owned subsidiary of the American multinational corporation Dow Chemical Company. In Africa it sells herbicides, pesticides, and fungicides for crops like barley, wheat, rice, cereals, vegetables, beans, rose flowers and pineapples.

“We see the Southern and East Africa regions as very interesting developing markets. The West Africa market is a little bit complex because of political instability in some countries. For instance, Nigeria has a problematic political stability, but it is still a big country and lots of people who all need food. We have no direct presence there yet, but are considering it,” explains Rolland.

“We need to step up food production and one place in the world where there is great potential to do just that is Africa. This is where we can get real growth. We have to use existing farmland and intensify production. And to do so we need better technologies that are sustainable,” says Johan Janse van Rensburg, a marketing specialist at Dow.

A new strategy

Janse van Rensburg explains that Dow’s new strategy in Africa aims at increasing its understanding of farming needs by hiring local teams and handling management within the continent. Previously the East African region was managed from France, but now all English-speaking countries in Africa are managed in Africa.

“Local people have a better understanding of the markets here and some of the conditions needed to make things work, such as providing smaller packaging.”

And Rolland adds the best way for international companies to do business in Africa is having a local presence.

“Without that, you cannot understand the local markets, the needs, the limitations and the potential.”

Some of the challenges Dow has faced in Africa include ensuring its products are affordable and, importantly, they are available in the right packaging.

“Other challenges include foreign currency availability. Payment credit terms are also often a difficult subject. Sometimes farmers and distributors may have the need to buy your products but don’t have the means to pay. So we also have the job of arranging the credit side to make sure that they have access to finances,” says Rolland.

http://www.howwemadeitinafrica.com/us-agriculture-giant-dow-agrosciences-to-grow-africa-footprint/43608/

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Kuwait to support nation’s development, science and technology

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Kuwait has pledged to support ongoing development, science and technology projects in Ethiopia while further upholding the spirit of brotherhood between Arab and Ethiopian peoples.

Ambassador of the State of Kuwait to Ethiopia and the Permanent Representative to the African Union Rashed Al-Hajri told journalists yesterday that Kuwait pledged to advance the African-Arab cooperation in all fields and build on what has been accomplished thus far.

The Amir of Kuwait Sheikh Sabah Al- Ahmad Al-Jaber Al-Sabah received an award by African Union marking in recognition of his great efforts for international humanitarian work, he added.

Ambassador Rashed also said that the initiative issues related to development, investment, food security, trade exchange, and civil society organizations themes allocating 4.5 billion USD for international and 2.5 billion USD for African fund.

Arab and African national and regional financial institutions are encouraged to continue supporting socioeconomic development including achievement of the Millennium Development Goals by 2015 and beyond, especially financing relevant projects in sectors such as agriculture, education, health, energy, drinking water and other social services, he added.
Recalling the diplomatic relations between Ethiopia and Kuwait since 1997, the Ambassador expressed keen interest of Kuwaiti businesspersons to invest in Ethiopia. Embassies of the two countries have contributed to the flourishing bilateral relations.
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he two countries share traditional, cultural, historical and cultural relations between values that still prevail and the exchange of visits has resulted in signing of a number of agreements, the establishment of a Joint Ministerial Commission to provide for a follow-up mechanism and for implementation of agreements.

According to Ambassador Rashed, Kuwait government is committed to strengthen cooperation between Africa and the Arab Region on the basis of a strategic partnership that endeavors to maintain justice, international peace and security.

http://www.waltainfo.com/index.php/explore/15174-kuwait-to-support-nations-devt-science-and-technology

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Soap, soap noodle factories to be built

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Construction of two soap and soap noodle, an input for soap production, manufacturing factories will be launched soon, the Chemical and Construction Inputs Industry Development Institute said.

The two factories, Repi Wilmar and Allied Chemical, are going to be built in Sebeta and Adama both in Oromia regional state.

The Repi Wilmar factory whose construction is expected to consume 2 billion Birr will produce soap noodle and soap from byproducts of a vegetable oil refinery to be constructed there.

“Soap noodle and soap will be produced from the byproducts of the vegetable oil. The factory creates opportunity to process agricultural products and use them as raw material. This makes the factory unique.” said Anteneh Birhanu, a researcher at the Institute.

Upon going operational in 2009 E.C., the factory will help substitute the soap noodle the country has been importing.

The factory to be built in joint venture by Repi Soap and Detergent Company and Wilmar International, a Singaporean company, will export half of its product to international market.

Repi Soap and Detergent company General-Manager, Birhanu Lema, said the new factory will increase its production capacity to 120,000 tons from the current 20,000 tons per annum.

This will enable the factory to meet the local demand for noodle and export it to Kenya, Somalia, Djibouti, Sudan and other neighboring countries.

Similarly, the soap factory to be built in Adama town with 36 million Birr by Allied Chemical will produce 7,500 metric tons of soap ingredients.

Upon completion in 2008 E.C., the factory will help substitute 90 percent of soap ingredients the country has been importing.

The two factories are expected to create jobs for more than 2,000 people.

http://www.ertagov.com/news/component/k2/item/3238-soap-soap-noodle-factories-to-be-built.html

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Ethiopia banks on seeds to boost food security

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Ethiopia has introduced a program to improve food security that combines scientific knowledge with local know how, as new community-based seed banks and training centers try to help farmers meet their basic needs and increase agricultural output. Joel Flynn reports.

For many Ethiopia is still associated with its deadly famine of the 1980s that killed more than 400,000 people.

But now the country is one of the top performing economies in Africa, and looking to innovation to help it contribute to Africa’s growing status as a food provider.

Research coordinators like Habte Mida are helping train farmers there.

“We give them training how to produce for example this is a hybrid seed and it requires some precaution, so we give trainings to them,” says Habte, who is currently in charge of coordinating National Wheat and Sorghum Research.

“Basically, the things we provide to this private seed companies is training, enhancing their capacity to produce seeds and also initial seeds.”

The country has introduced a programme to improve food security that combines scientific knowledge and local know-how.

New community-based seed bank and training centres are trying to help farmers meet their basic needs and increase overall agricultural output.

Crops like Sorghum are being grown for grain as the whole continent makes a concerted effort to focus on food production.

Nigeria’s minister of agriculture, Akinwumi Adesinia, said the era of importing food in Africa must end.

“65 percent of all the available arable land that will feed 9 billion people in our world by 2015, it is not in Latin America, it is not in Asia, it is not in Europe. It lies right here in Africa,” Dr. Adesina told Reuters.

In Ethiopia’s Oromia State much faith is being put in small scale farming. That’s according to Dr. George Bigirwa, Associate Director of Programme for African Seed System (PASS).

“It is this small seed companies or local seed companies who are interested in producing seed or other varities which the multinationals don’t touch,” Dr. Bigirwa said.

In less than a decade Ethiopia has emerged from a famine-ravaged economy to become the fifth largest in Africa.

There’s hope here that this could just be the seed of a brighter future for the whole continent.

http://www.ertagov.com/news/component/k2/item/3224-ethiopia-banks-on-seeds-to-boost-food-security.html

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House of Federation signs agreement with Canadian Senate

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Federation House Speaker, Kassa Tekleberhan, has penned bilateral agreement with the Canadian Senate during his visit to Canada.

According to the Office of the spokesperson of the Ministry of Foreign Affairs, the Speaker has conferred with spokesperson of the Canadian Senate, Noel Kinsella, and has agreed to cooperate on education and cultural as well as local and international issues.

Meanwhile, Kassa Teklebrhan met members of the Canadian parliament and talked about the possible cooperation between the legislative councils of the two countries.

Similarly, discussions have been made with Canadian Foreign Affairs Minister John Baird.

Kassa also took time to exchange notes with officials of Carlton University in Otawa to boost cooperation with higher education institutions of Ethiopia.

http://www.ertagov.com/news/component/k2/item/3219-house-of-federation-signs-agreement-with-canadian-senate.html

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Filed under: Ag Related, Economy, Infrastructure Developments, News Round-up Tagged: Agriculture, Business, China, East Africa, Economic growth, Ethiopia, Investment, Millennium Development Goals, Sub-Saharan Africa, tag1

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Ethiopia seeks Turkish government support for railway fund

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Ethiopia has requested support from the Turkish government to press for the release of a $700 million loan that the Turkish EXIM Bank pledged to finance the construction of the African country’s Awash-Woldia railway project.The 389km railway line will connect northern Ethiopia with the country’s central region.

A senior Ethiopian government official Tedros Adhanom, who held bilateral discussions with his Turkish counterpart Mevlut Çavuşoğlu on September 29 in New York, said the project was part of efforts to improve infrastructure in the country.

He said the Awash-Woldia railway, expected to be mainly financed by Turkish EXIM Bank, was one of the major projects.

Ethiopia’s Foreign Affairs ministry on Tuesday said Tedros had asked Çavuşoğlu “to encourage the bank to release the agreed funding of US$700 million”.

A contract between Ethiopian Railways Corporation and Turkish YAPI MERKEZI for the construction of the railway project was signed a couple of years ago.

Tedros also commended the Turkish government’s efforts in bringing more investors to Ethiopia, the statement said.

Turkish investors, this year, surpassed China in terms of investments in Ethiopia.

China has invested $836 million in Ethiopia over the past 10 years, while Turkey has put in $1.2 billion worth of investment into Ethiopia, so far.

http://www.theafricareport.com/East-Horn-Africa/ethiopia-seeks-turkish-government-support-for-railway-fund.html

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Industry’s Push

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By Muluken Yewondwossen 

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The Ministry of Industry (MoT), the office responsible for following the manufacturing sector, has set an ambitious target for exports this fiscal year.

They plan for manufacturing to earn 275 percent more from exports than it did during the 2013/14 budget year.
If everything goes right the manufacturing sector would earn USD 1.5 billion though exports this year.
The Growth and Transformation Plan (GTP), a five year development plan, which was endorsed in the 2010/11 budget year has focused on increasing industrial output in the country.
To follow this strategy the government has put in place several policies and strategies to help the manufacturing sector grow. Manufacturing exports have been doing well lately but they didn’t meet the expectations for the GTP.
Every year the ministry evaluates the progress of manufacturing and makes adjustments. This year it addressed the issue of improving export volume and earnings.  MoI said that it did not revise the original GTP target a year ago it planned to generate USD 1.2 billion. In the GTP target during the 2013/14 budget year the manufacturing sector was supposed to generate USD 1.6 billion from exports. The actual export earnings from the manufacturing sector in the past budget year was almost USD 400 million, which is very high compared with the 2012/13 budget year, where the country earned USD 282 million.
Similar to last year, the ministry’s goal is to earn USD 1.5 billion from manufacturing export products.  The original GTP target stated that in the 2014/15 fiscal year the country would earn USD 2.449 billion from manufacturing product exports, (this figure  does not include the exports from public enterprises).
In the 2014/15 budget year MoI plans to generate almost USD 434.9million from textile and garment exports. Currently, clothing and textiles are the manufactured products which earn the most money from exports.  The GTP called for textiles and garments to earn USD one billion this year.  During the past fiscal year the manufacturing sector earned USD 111 million, which is three times lower than last year’s target.
Leather was seen as another big earner and plans were for it to be dramatically improved during the GTP. By the end of this fiscal year leather was projected to earn USD 500 million, according to the GTP matrix. In its latest project MoI plans to generate almost USD 357.7 million by exporting leather and leather products whereas last year they earned around USD 133 million.
Sugar was expected to bring in the third highest amount of export revenue at USD 286 million.  Hopes are that when the new factories are finished sugar will take off. Tendaho Sugar Factory is expected to begin production by the middle of this year.  This should alleviate the fact that sugar has been behind GTP projections.  During the current and past budget year sugar was expected to generate USD 661 million and 244 million from exports respectively. Meat and dairy products which earned USD 76 million last fiscal year are expected to earn USD 255.5 million during this fiscal year.

According to the government’s target, the sector was expected to generate USD one billion from exports, including livestock. Other sub-sectors the government plans to earn a large amount of money from through exports include: agro-processing and pharmaceuticals (USD 134.6 million), chemicals and manufacturing (USD 20 million) and metal engineering (USD 19.3 million).
Originally agro processing was intended to bring in USD 300 million and Pharmaceuticals USD 20 million.
To meet the targets this year the manufacturing sector is expected to increase its output to 21.4 percent.
The Ministry of Finance and Economic Development forecasted manufacturing’s contribution to the Gross Domestic Product (GDP) to increase from 21 to 23 percent, last fiscal year.  Expanding industrial output seems plausible given that industry along with service and agriculture is one of the three economic sectors that have been rapidly growing and eventually it is expected to grow even more rapidly.
To achieve these goals the ministry has identified challenges and recommended adjustments.
Some of the steps the ministry recommends include implementing new technology, improving management skills and the process of conducting business, strengthening production capability, improving the quantity and quality of raw materials and coming up with ways to make labour production more efficient.
Reducing bureaucracy and improving links between industries are seen as other improvements that will help manufacturing in Ethiopia.
The ministry pointed out that it wants more industrial leaders to focus on the export market as opposed to local consumers. They added that they will continue to work on these goals.
Another thing it is doing is working directly with factories to improve their outputs in tangible ways. For example if a factory produced 70 percent of its capacity last year it will work with these factories to boost capacity 80 percent this year.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4571:industrys-push&catid=35:capital&Itemid=27

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Getting Closer

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Turkey’s interest in investing in Ethiopia has been significantly expanding. Even though Ethiopia has been growing significantly in the past five years, Turkish businesses have just recently been flocking to the country.

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The number of companies who visited Ethiopia and attended international trade fairs and business to business (b2b) meetings are increasing. For instance about five months ago a large number of Turkish company representatives attended the b2b held with Prime Minister Hailemariam Dessalegn.

Since the biggest Turkish business association, Tuskon, established its continental office in Addis Ababa about a year ago, other Turkish companies have followed suit. On Thursday September 25 about ten Turkish companies came and met with colleagues in Ethiopia to link their business with the Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA).

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4567:getting-closer&catid=35:capital&Itemid=27

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KEFI Minerals numbers underline the potential of Ethiopia project

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By Ian Lyall October 01 2014

    

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It said operating costs would be US$626 and all in costs are expected to be US$844 (which is well below the industry average), while the initial investment to build the operation is put at US$130 million

The huge potential of KEFI Minerals’ (LON:KEFI) Tulu Kapi project was further underlined as the company unveiled cost estimates for the proposed gold mine in Ethiopia.

It said operating costs would be US$626 and all in costs are expected to be US$844 (which is well below the industry average), while the initial investment to build the operation is put at US$130mln.

KEFI said it will need a further US$20mln of working capital for start-up.

Chairman Harry Anagnostaras-Adams said: “This independent verification represents another key milestone towards reactivating the mining licence application in October and reaffirms our expectations that construction will commence in 2015.”

The stand-out figure is the all-in cost estimate, which is well below the US$999 an ounce given by Tulu Kapi’s former owners.

It reveals the mine ought to be economic at a gold price much lower than today’s.

The net present value of the Tulu Kapi at US$1,500 gold is put at US$345mln and US$100mln at US$1,250 an ounce for the precious metal.

Last week the company secured independent verification of its mine plan.

The respected Snowden Mining Industry Consultants provided the sign-off at a higher than previously slated annual production of 86,000 ounces (2,000 ounces more than previously forecast).

The plan is to mine 13mln tonnes of ore to unearth 925,000 ounces of gold over Tulu Kapi’s ten-and-a-half year life at a processed grade of 2.4 grams per tonne.

http://www.proactiveinvestors.co.uk/companies/news/72814/kefi-minerals-numbers-underline-the-potential-of-ethiopia-project-72814.html

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Ethiopia to Benefit from World Bank Support for Social Safety Net

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The World Bank’s Board of Executive Directors on Tuesday approved a US$600 million credit to fund Ethiopia’s social productive safety nets project.

Ethiopia first ran the project in 2005 and the World Bank says the East African country has managed to score some commendable successes.

Since its launch, the Bretton Woods Institute says it has witnessed the programme make notable contributions in reducing household vulnerability and food insecurity, improve resilience to shocks and promote sustainable community development in rural areas across Ethiopia.

the program will be expanded across the country to eventually reach up to 10 million people each year

The new PSNP4 project, supported by the World Bank through the International Development Association, plans to contribute in poverty reduction and promoting shared prosperity by providing a safety net for Ethiopia’s food insecure and most vulnerable people.

To face the challenges of improving nutrition, PSNP4 will provide support to the country’s nutritional goals and address long-term income challenges, among other things.

World Bank’s country director for Ethiopia, Guang Chen said “since its launch nearly a decade ago, the productive safety net programme has made unparalleled contributions not only to food security and Ethiopia’s progress in meeting many of the MDG goals, but to reversing land degradation”.

Chen added that the new PSNP4 “will build on these successes”.

“And also support the development of long-term social protection systems and disaster risk management. I am very pleased that the program will be expanded across the country to eventually reach up to 10 million people each year,” he said.

The PSNP4 will be implemented in 411 districts in Ethiopia, reaching up to 10 million food insecure people per year.

The project includes a total budget of approximately $3.6 billion from the government and 11 international development partners, including the World Bank.

http://www.theafricareport.com/East-Horn-Africa/ethiopia-to-benefit-from-world-bank-support-for-social-safety-net.html

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Best Western International to open two hotels in Addis

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Best Western International Inc, along with Great Abyssinia Plc and Noah Real Estate Plc announce the development of two Best Western branded hotels in Addis Ababa, Ethiopia.

The BEST WESTERN PLUS and BEST WESTERN branded hotels are planned to be opened in 2015 and 2016 respectively, a release issued to ENA said.

These properties will be the first Best Western branded hotels in Ethiopia joining existing hotels in Tanzania and Kenya in East Africa.

Best Western Plus Abyssinia Hotel will be an Upper midscale hotel in Addis Ababa located at Bole Medhane Alem Round.

The eleven-story the hotel with 168 rooms offers the ideal location for business as well as leisure travelers as it is ideally situated in the growing cosmopolitan part of Addis Ababa.

Best Western Noah hotel will also join the Addis hospitality arena as a midscale internationally-branded hotel located at Bole Medhane Alem Area with 121 rooms, small and medium size meeting rooms, a café, an all-day dining restaurant and lounge bar that will bridge the gap for a truly midscale hotel in the capital.

“We are very excited about bringing our world famous brand to Addis Ababa, Ethiopia one of the fastest growing economies in Sub Saharan Africa with amazing world heritage sites recognized by UNESCO and is considered as a cradle of mankind by many” said Suzi Yoder, Best Western International’s Senior Vice President International Operations.

“The addition of these properties to our existing hotels in Africa outlines our ongoing commitment to the growth of our brand in the region”, Yoder continued.

“The potential for Addis Ababa to add new internationally branded hotels is still untapped as the home of the African Union, United Nations Economic Commission for Africa, home of 4th largest diplomatic community and Pride of African Carrier Ethiopian Airlines, we are excited to take part in this exciting opportunity and we look forward to expand in the other historical destinations of Ethiopia” Theodros Zerihun Co- Founder of Great Abyssinia and Noah Real Estate.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2348:best-western-international-to-open-two-hotels-in-addis&Itemid=200

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Wyndham Hotel Group to Open Four-star Hotel in Addis

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The US-based Wyndham Hotel Group announced on Tuesday, September 30, 2014 that it would open a four-star hotel here in Addis Ababa.

The 136- room Ramada Addis is expected to be completed in the first half of 2015, it was indicated.

According to a press release issued by the group, Ramada Addis is the seventh hotel of Wyndham Hotel Group in the African continent.

Owner of Ramada Addis, Adugna Bekele, stated that the partnership of the local company ADM Business PLC with Wyndham Hotel Group will have a great importance for the Ethiopian economy.

He said, “We are deeply privileged to be part of the country’s ever growing tourism industry and we believe this partnership will bring world-class service to the capital. Once open, Ramada Addis will create job opportunities for over 250 people, serve Africa’s capital city to host its multitude of conference attendance and play a vital role in bringing foreign investment into the market.”

Part of Wyndham Hotel Group, Ramada is a global chain of nearly 830 midscale and upscale hotels.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2344:wyndham-hotel-group-to-open-four-star-hotel-in-addis&Itemid=260

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Ethiopia named best coffee growing country

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Ethiopia ranked first among top 10 coffee growing countries by a group of 11 roasters and writers.

Thrillist.com asked 11 coffee industry experts to rank their top three coffee growing countries.

The experts ranked Ethiopia the best coffee growing country with 25 points, while Kenya and Colombia stands second and third respectively with 12 and 10 points.

“With sweet fruit notes and delicate floral aromas, it’s hard to imagine a coffee that tastes better than a finely washed Yirgacheffe or a big, sweet, natural processed Sidama,” said Lorenzo Perkins, Director of Education at Cuvée Coffee.

Ethiopia is the genetic birth place of Coffee Arabica, which has been growing wild and harvested here for millennia, he said.

“Every time I drink coffee from Ethiopia, I can’t help but feel that this is how coffee is supposed to taste and everything else is an imitation, a copy of a copy, changed in some way inadvertently because of genetic drift or changing climates,” he added.

He acknowledged that there are many unclassified coffee varieties, which he said contributes to the ‘uniqueness of the cup character.’ For Ethiopia to produce ‘great’ coffee every year is because ‘it’s truly the birthplace of coffee’, according to Sarah Allen, editor of Barista Magazine.

She stated that it is native to Ethiopia means its producers ‘rarely contend with problems that can overwhelm’ coffee growers in Central and South America (where coffee is not native, but rather introduced).

She mentioned the recent example of the coffee-leaf rust that has plagued Central America this past year and wiped out thousands of farms.

“Because coffee is native to Ethiopia, it rarely incites climate or disease-born chaos. Coffee still grows wild all over Ethiopia, and there are thousands of undiscovered varietals in Ethiopia.”

“Specialty coffees from Ethiopia are known for their syrupy body, which is a result of the dry processing method still popular with Ethiopian producers, in which the coffee’s cherry skin is left intact. This process also lends the coffee an exceptionally fruity and floral character,” she said.

The largest producer of coffee in Sub-Saharan Africa, Ethiopia is the fifth largest coffee producer in the world next to Brazil, Vietnam, Colombia, and Indonesia, contributing about 7 to 10 percent of total world coffee production.

Coffee production is important to the Ethiopian economy with about 15 million people directly or indirectly deriving their livelihoods from coffee.

Ninety five percent of Ethiopia’s coffee is produced by small holder farmers on less than two hectares of land while the remaining five percent is grown on modern commercial farms.

Coffee is a major Ethiopian export commodity generating about 25 percent of Ethiopia’s total export earnings.

http://www.ertagov.com/news/component/k2/item/3279-ethiopia-named-best-coffee-growing-country.html

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State Minister Dewano meets Swiss business delegation

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State Minister Dewano Kedir met with the Swiss business delegation visiting Ethiopia on Monday (September 29).

Representatives from Swiss companies led by Ambassador Andrea Semadeni, the Swiss Ambassador to Ethiopia, discussed the investment environment, priority investment sectors and market opportunities of Ethiopia as well as ways to expand Swiss investment in Ethiopia.

State Minister Dewano emphasized that as economic diplomacy was now a central factor of Ethiopia’s foreign policy, Ethiopia would like to see the economic ties between Switzerland and Ethiopia be strengthened and expanded.

He explained the need for European investment in Ethiopia, adding that Europe’s investment, including Turkey, was larger than that of any other continent.
The State Minister noted the country’s peace and stability and detailed the investment and market opportunities available, pointing out the huge market potential of the growing economy.

He said that it was now “the third largest economy in Africa, after Nigeria and South Africa.”

Ambassador Semadeni and the delegation showed their interest in economic and business cooperation between Ethiopia and Switzerland and discussed matters which could enhance economic cooperation and increase Swiss investments in Ethiopia.

They also emphasized the Swiss investments already present in Ethiopia and the companies making assessment of the possibilities.

Ambassador Semadeni said he was willing to encourage other Swiss investors to come to Ethiopia.

The delegation was made up of representatives from 10 companies and 2 media organizations including BSI SA, Handelszeiitung/ Axel Springer Schweiz AG, Hoffman- La Roche, Metter Toledo Sales International GmbH, Motivation Africa, Swiss African business circle (SABC) and Switzerland Global Enterprise.

http://www.waltainfo.com/index.php/explore/15227-state-minister-dewano-meets-swiss-business-delegation-

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SNNP to build 154 secondary schools

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Some 154 secondary schools will be built in the SNNP Regional State this budget year, according to the regional state education bureau.

Government communication process representative at the bureau, Adane Niguse, told WIC today that the schools will be constructed with half a billion birr earmarked by the regional state.

He said indicated that sites selection and the schools’ layout have already been completed. Currently, contractors screening process is underway to commence construction.

According to Adane, the construction of the schools would raise the secondary school coverage in the region to 49 per cent from 42.5 per cent now.

He said over 476,000 students are enrolled in secondary education this academic year. More than 4 million children are also admitted to primary school.

Some 1.2 million adults will also get access to education this academic year, he noted.

http://www.waltainfo.com/index.php/explore/15246-snnp-to-build-154-secondary-schools

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Commission receives 3,380 reports of corruption last fiscal year

 

The Federal Ethics and Anti- corruption Commission (FEACC) said it has received 3,380 corruption reports from whistleblowers last Ethiopian fiscal year.

Ethics Education and Communication Affairs Directorate Director at FEACC Berhanu Assefa, told WIC that 43.5 per cent of the reports fell within the commission’s jurisdiction.

The Commission filed charges against reported corruption cases which were within its responsibility and mandate, he said.

According to Berhanu, the Commission filed charges against 868 corruption cases last year, of which the Court decided on more than 90 per cent of the files in favor of the Commission.

As part of the efforts to prevent corruption, the Commission also offered training of trainers (ToT) and awareness raising training for 1,250 and 44,360 people respectively, he said.

The Commission has so far registered assets of 80,000 government officials and high ranking appointees, of which 17,288 officials and appointees registered their assets last fiscal year alone, he said.

The Commission had also submitted a draft law to the Council of Ministers – a law that will provide the Commission a legal framework to tackle corruption in the private sector.

Ethiopia, one of the countries which signed the UN Convention against Corruption, will present its achievements in implementing anti-corruption measures at a forum to be held in Togo and Malta, he said.

http://www.waltainfo.com/index.php/explore/15219-commission-receives-3380-reports-of-corruption-last-fiscal-year-

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State Minister Dewano meets CPF President

State Minister for Foreign Affairs, Dewano Kedir, met on Monday (September 29) with Kasem Jarusawatd, President of the Tanzania branch of the Thai company Charoen Pokphand Foods Tanzania Limited and its Africa Project.

The CPF is the leading agro-industrial and food conglomerate in Thailand and plans to set up in Ethiopia.

The State Minister noted that CPF would open the door to a stronger, closer, cooperative partnership between Ethiopia and Thailand, adding that the launch of CPF’s project in the near future would help both countries improve and expand bilateral relations.

He noted that CPF’s engagement with Ethiopia in manufacturing suited the Government’s development policies and strategies and could be considered as a step forward for closer cooperation between the two business communities.

The State Minister promised that the Ministry of Foreign Affairs would provide CPF with what it needed, and added that other Ministries, including Ministry of Agriculture and Industry, would also contribute to the success of its efforts.

Jarusawatd said his company attached special importance to Ethiopia, a place of emerging business and investment opportunities.

He indicated that CPF was keen to assess the business potential in manufacturing animal feed, animal breeding and animal farming; poultry; meat processing; and feed-mill business in close association with small-holder farmers and others.

He also underlined that the company was committed to share best experiences, expertise and know-how with small-holders.

State Minister Dewano recently paid a five day visit to Thailand (September 15-20) on the occasion of the celebration of the 50th anniversary of Ethio-Thai bilateral relations.

http://www.waltainfo.com/index.php/explore/15231-state-minister-dewano-meets-cpf-president-

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Industrial zone creating more jobs for citizens

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The industrial zones being constructed in Ethiopia are creating more job opportunities for citizens alongside improving competitiveness of firms, the Industrial Zones Development Corporation said.

The first phase of the Bole Lemi I industrial zone constructed at the southern outskirts of Addis Ababa which lies at 156 hectares land alone creates job for 1,500 individuals, Shifarew Solomon Director of the Corporation told ENA.

The nation is working to create more jobs by developing additional industrial zones at the outskirts of the capital, Addis Ababa.

Expansion of the Bole Lemi industrial zone (phase II) and construction of new hub at Kilinto, 30km further south of Bole Lemi are expected to be launched soon.

Up on going operational, the two industrial zones in which their construction is financed by a 250 million USD loan secured from the World Bank, are expected to create jobs for 30,000 people.

These projects are part of the government’s initiative launched this September to improve employment through development of industrial zones.

Companies are waiting the opening of 15 industrial sheds being constructed at the Bole Lemi I site, he added, many companies have also shown interest to operate at the Bole Lemi II and Kilinto sites.

The Bole Lemi II and Kilinto sites will lie on 186 and 308 hectares land respectively.

In addition to increase employment opportunity, the sites will be home for export-oriented firms, will help to substitute specific products the country has been importing with domestic products and earn additional revenue by exporting the products.

The Bole Lemi I and II sites are dedicated for industries engaged in textiles and leather, while the Kilinto site is for companies in the pharmaceuticals, food processing and construction areas, among others, the Director said.

“The companies operating at the Bole Leli I site are engaged in garment and leather industries and similar companies are expected to operate at the Bole Lemi II site. The Kilinto site is left for companies engaged in pharmaceuticals, food, construction and related areas.”

Similar industrial parks will also be constructed in different parts of the country, Shiferaw said.

Assessments are being conducted in Kombolcha, Hawassa and Dire Dawa towns, in Amhara and Southen Nations Nationalities and Peoples states as well as Dire Dawa Administration respectively.

 http://www.waltainfo.com/index.php/explore/15239–industrial-zone-creating-more-jobs-for-citizens-

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Toshiba Concludes MoU with Ethiopian Electric Power

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Toshiba Corporation on Sunday disclosed that it has concluded a memorandum of understanding (MoU) with Ethiopian Electric Power (EEP) in geothermal power development.

With the agreement the parties collaborate in power generation projects and personnel development.

EEP, a publicly owned utility, engages in the development of geothermal resources and the construction of power plants.

Through the partnership with EEP, Toshiba said it will draw on its long-standing experience and expertise in geothermal systems to contribute to projects in Ethiopia.

More specifically, the company will develop and manufacture major equipment, create operation and management guidelines, cooperate in personnel development, and start a waste heat utilization business.

Ethiopia is geothermal rich, with resources estimated at equivalent to 6,000 megawatts. However, this potential has yet to be explored and developed, and over 90 percent of the country’s electricity is from hydropower sources.

Looking to the future, Ethiopia plans to increase its current installed generating capacity of 2,268 megawatts to 37,000 megawatts by 2037, and the development of geothermal power will play a significant role in reaching that target.

Toshiba commands the world’s largest market share for geothermal equipment with 24% of total installed capacity.

The company delivered Japan’s first geothermal turbine and generator, with a capacity of 20 megawatts, to the Matsukawa Geothermal Power Plant in Iwate in 1966.

Since then, Toshiba has delivered 52 geothermal turbines and generators with a total installed capacity of approximately 2,800 megawatts to North America, Southeast Asia, Iceland and elsewhere around the world.

According to Business wire, Toshiba will continue to promote various forms of renewable energy generation in the global market, including geothermal, wind, hydro and photovoltaic energy, to contribute to a reliable supply of renewable energy worldwide.

http://www.ertagov.com/news/component/k2/item/3264-toshiba-concludes-mou-with-ethiopian-electric-power.html

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 Weed invades most grazing land in Afar

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Prosopis juliflora, an invasive weed, is posing a threat in Afar regional state by invading most of the grazing lands, the region’s agriculture bureau said.

Prosopis juliflora is an invasive weed grows to a height of up to 12 meters and has a trunk with a diameter of up to 1.2 meters.

The weed has invaded almost all of the grazing land in the region, Ibrahim Mohamed deputy head of the bureau said.

The weed is also expanding to the neighboring states, Amhara, Oromia and Tigray, he added.

The weed invaded 1.7 million hectares land in Afar, he said quoting a study conducted by the Ministry of Agriculture and FAO.

Activities are being underway to eradicate the weed.

Crushing the fruit of the weed and bulldozing the plant are the activities being carried out, he added.

The federal government said it is working to destroy the weed in collaboration with stakeholders.

Efforts are being exerted to crush the fruit of the tree and provide for cattle as a fodder, Agriculture State Minister Dr. Gebre-Egizabher Gebre-Yohannes said.

A strategy is being prepared to destroy and control expansion of the weed, he added.

It will be effective after a month.

Prosopis juliflora is a shrub or small tree looking like a mesquite.

It is native to Mexico, the Caribbean. The weed has become established as an invasive weed in Africa, Asia, Australia and elsewhere.

A mature plant can produce hundreds of thousands of seeds, which remain viable for up to 10 years.

Seeds are spread by cattle and other animals that consume the seed pods and spread the seeds in their droppings.

It is estimated that the tree is was introduced to the region in the late 1970s and early 1980s, its aggressive growth leads to a monoculture, denying native plants water and sunlight, and not providing food for native animals and cattle.

http://www.ertagov.com/news/component/k2/item/3262-weed-invades-most-grazing-land-in-afar.html

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Written by Julius Omondi for Farmbizafrica

A virtual warehouse is assisting agro input companies conveniently reach farmers saving them cost and time at a time when delayed farmer access to farming materials has been blamed for delayed planting and ultimately poor harvest. Dubbed iProcure the innovation is already being used by several agro input firms which are now relying on it to distribute their products to farmers and has been created by Stefano Carcoforo.

Coming from a software development background, Stefano decided to set up a firm that would provide a solution to both the farmers, wholesalers and agro input manufacturers. “I first developed solutions and applications for individual companies depending on their needs. However, the quick solutions and apps I developed for the clients made me realize that I could provide a better solution for a problem that was turning out to be a menace to both farmers and input producers hence the birth of iProcure,” explained Stefano.

According to Stefano, he was creating a solution that was would multi task and offer several answers just with a mere click of a button. Apart from selling the products, iProcure will enhance the relationship among all people in the value chain like providing client profiles along with geo-located purchasing patterns, real-time agent performance and transaction analysis. The service would also help retailers better predict demand with business intelligence data, improve inventory management, and streamline distribution efficiency. “There are a lot of things happening around stockists or agro vets. For instance, the products may over stay on shelves and therefore delaying the timely payment to the manufacturer. However, with the new innovation, resources are only committed after creation of demand and therefore the payments are made within a day or two,” added Stefano.

The iProcure team is working with both farmer groups or cooperatives and individual stockists. The farmer group identifies a leader who then becomes their point man to the firm. “Our plug and play last mile distribution platform ensures that farmers are located near the point of sale and are never far off from what they need. iProcure is strongly present in remote rural locations where major distances are an obstacle for broad-access to these markets.” The farmers visit their point man and make their orders. The leader of the group then logs into his account of the application on the mobile smart phone and makes all the orders with details of the individual farmers plus the cash.

After a day or two, iProcure then delivers the ordered inputs to the farmer group and the transaction is effected thus helping farmers save time and resources while making the tedious trips to the shopping centers for input purchase. They supply the products at a whole sale price and get their returns from the small margins given to them by the producers.

The firm is already working with over 5000 Stockists and Farmer groups mainly from around Rift valley and Central regions. Stefano added, “We have expansion plans in the pipeline especially for non seasonal products like dairy inputs.”

The tool helps provide free marketing, tracking and traceability for the agro input firms and their products. Each agro input firm interested in using the module registers and is allocated its’ own account which displays all the needed data right from the quantity ordered, by who, from which location among other analytics. By so doing, the producer is able to trace who is using what product and what product is needed more in which area.

The application works on any android gadget and the team of iProcure gives their distributors and farmer group leaders hardware which is a smart phone which is pre installed with the application. The mobile based application can work both offline and online. “We have put into consideration that many of the farmers are located in the rural areas where there is poor internet connectivity due to poor Telco infrastructure and therefore we have designed our application to work also in offline mode,” noted Stefano.

Sourced here  http://www.farmbizafrica.com/index.php?option=com_content&view=article&id=1350:virtual-warehouse-allows-farmers-timely-access-to-inputs&catid=20&Itemid=142

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Ethiopia to issue international bond

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Ethiopia announced its plan to issue international bond at the end of this year, the first of its kind move by the country to join the international capital market.

The announcement came following the sovereign credit ratings given to the country by three top international rating agencies last May.

Ethiopia had secured a credit rating from Standard & Poor’s and Fitch assigned a rating of “B” to the country’s sovereign treasury bonds, while Moody’s gave a “B1″ (B+).

“On the basis of the ratings, the government of Ethiopia has decided to issue a 10-year international bond and access international capital market,” Sofian Ahmed, Finance and Economic Development Minister told journalist today.

“The bond sale would serve as a potential means for the government to know the risk premium,” he said. This, according to him, will help Ethiopian business to access international capital markets by providing a benchmark for risk assessment.

He further said that the fund to be obtained from the sale of bond would be utilized to finance infrastructure projects.

All the necessary preparations have been done to issue the bond, including selection of world top banks that will issue the bond on behalf of the Ethiopian government, he said.

An agreement would be signed soon with three banks to issue the bonds. Hiring of International law firms that provide legal advice is also underway, he added.

Asked about devaluation of Ethiopian birr, Sofian said, “The government has no intention to devaluate birr. There is no economic reason to devaluate birr. Ethiopia’s economy is now stable.

http://www.waltainfo.com/index.php/explore/15305–ethiopia-to-issue-international-bond

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Dangote Industries (Ethiopia) Ltd., Muger, Ethiopia

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Dangote Cement PLC has commenced project works of US$ 400 Million green field cement plant of 2.5 million tons/ annum capacity at Muger in Ethiopia. Mobilization of men and machinery is done and project execution is underway in full pace. The Plant is scheduled to be commissioned by the Q1 of 2015.

Dangote Cement’s foray into Ethiopia in the Oromia region close to Addis Ababa, comes at a time when the Horn of Africa nation is grappling with a severe cement deficit amidst rising demand as a result of substantial investments in infrastructure like roads, dams, bridges and railways. Currently, Cement demand in Ethiopia is around 7 to 8 MTPA, while production stands at 2.4 MTPA forcing the nation to import the deficit for several years. Over the next five years, demand is expected to soar to 13.8 MTPA, while local supply will reach 8 MTPA when existing manufacturers complete the upgrading of their factories. This provides Dangote Cement an ideal investment opportunity to bridge the deficit and consolidate its operations.

Key Features

Name of the Plant : Dangote Industries (Ethiopia) Plc, Muger, Ethiopia
Capacity : 2.5 million tons/annum

Raw Material Sources

Limestone : Muger Mines
Shale : Muger Mines
Red Soil : Muger Mines
Gypsum : Muger Mines
Power Source : 1 x 30 MW Coal Based Captive Power Plant
Fuel Source : Coal, LPFO
Cement Packing : 3 Roto Packers of 2400 Bags/hr Capacity
Cement Loading : Auto Loading of 8 Trucks simultaneously

http://dangcem.com/index.php?page=98

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European businesses plead for urgent improvement in business licensing, taxation

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Ahmed Shide

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“We are here to listen to you and make swift improvements,” Ahmed Shide, MoFED

The European Union Business Forum Ethiopia (EUBFE) pleaded for an urgent improvement of the business climate in Ethiopia on Thursday during an event held at Addis Ababa Hilton.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2595-european-businesses-plead-for-urgent-improvement-in-business-licensing-taxation

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Ethiopia, Switzerland Sign Memorandum of Understanding

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Ethiopia and Switzerland signed on Monday, October 06, 2014 a memorandum of understanding that strengthens their bilateral relations.

The memorandum of understanding was signed by Foreign Affairs State Minister Ambassador Berhane Gebrekristos and Yves Rossier, Swiss State Secretary for Foreign Affairs.

According to Ambassador Berhane, the MoU would help the countries collaborate on political issues at bilateral and international forums.

Switzerland would also provide training on federalism and extend technical assistance in science and technology as well as other spheres, it was learned.

Switzerland State Secretary for Foreign Affairs, Yves Rossier, expressed his appreciation for the role Ethiopia is playing in the Intergovernmental Authority Development (IGAD).

”The strength of IGAD is only the strength of its member states and the role of Ethiopia is determinant,” he said.

Rossier added that the agreement helps the two countries to work closely in various issues.
Ethiopia and Switzerland are expected to sign agreements in economic and technical areas soon, it was learned.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2371:ethiopia-switzerland-sign-memorandum-of-understanding&Itemid=260

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Ethiopia’s economy shows 10.1 per cent growth

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President Mulatu Teshome said Ethiopian economy has shown a 10.1 per cent growth on average during the past four-year implementation period of the Growth and Transformation Plan (GTP).

The President made the remark here today while opening the fifth term joint session of the House of Peoples’ Representative (HPR) and the House of Federation (HoF).

He further said the county managed to register 10.3 percent growth last Ethiopian fiscal year. He also predicted the economy to show 11.4 percent growth this budget year.

According to President Mulatu, agricultural productivity grew by 21.7 quintals per hectare on average, while tax revenue has surge by 17.6 per cent.

More than 18,800 kebeles (districts) have become beneficiaries of telecom services, thereby attaining 96 per cent of the target set out in the Growth and Transformation Plan (GTP), he said.

He further said that more than 26 million people have participated in the watershed development and natural resource conservation activities carried out across the country
The mega project being carried out in the country has created jobs for 2.7 million people, he said.

The president also told the parliament about the activities to be carried out in this budget year.

He said efforts would be made to maintain the single digit rates of inflation as well as improve education quality in this budget year.

He said the government is doing to solve the current power interruption and alleviate problems facing the manufacturing industry sector.

Efforts would also be made to make the upcoming general election fair, free and participatory, he noted.

He said the country would consolidate its efforts to bring about durable peace in the region, especially in Somalia and South Sudan.

http://www.waltainfo.com/index.php/editors-pick/15307-ethiopias-economy-shows-101-per-cent-growth-

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Rwanda seeking 400MW electricity from Ethiopia

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Faced with a high cost of energy, Rwanda is planning to import 400MW of electricity from Ethiopia in the medium term.

Kigali is exploring other avenues that will enable it achieve its ambitious second Economic Development and Poverty Reduction Strategy (EDPRS II) target of 70 per cent access rate to energy and an electricity generation capacity of 563MW by 2017.

For it to achieve its desired access rate, the government is planning to supply 1.7 million customers with electricity. Currently, the country’s total energy generation stands at 119MW.

Rwanda has designed a five-year electricity strategic plan in which it projects to deliver about 232MW of hydropower, 310MW geothermal power and 300MW from methane gas, as well as strengthen and expand transmission lines by an additional 2,100km.

Hydropower projects in the pipeline include Rusumo falls, Rusizi III and Nyabarongo II.

However, because most of them are in their infancy, the rising demand for energy will partly be met through significant energy imports, which is cheaper than generating energy from costly thermal projects.

Currently, 50 per cent of Rwanda’s energy is generated via thermal means which is expensive largely due to fuel costs.

Fuel – in particular diesel and heavy fuel oils – account for approximately 40 per cent of the country’s 119MW installed energy capacity. Hydropower accounts for 59 per cent and methane gas 1 per cent.

Last year, for example, the energy sector requested the government for $46.7 million for buying fuel to be used in thermal power generation but received only half the amount.

This cost is passed on to consumers; hence Rwandans pay higher per unit cost for power than their neighbours in the region.

Rwanda’s current generation portfolio stands at $0.24/kWh compared with Kenya’s $0.15/kWh, Uganda’s $0.17/kWh and Tanzania’s $0.05/kWh.

Rwanda’s energy deficit is hampering its plan to achieve a middle income status by 2020 by empowering the private sector.

As part of plans to boost its capacity, Rwanda has signed a memorandum of understanding with Ethiopia.

However, the expression of interest is not a guarantee that the flow of electricity from Ethiopia will be immediate, as Rwanda must first sort out infrastructure and regulatory challenges.

http://www.ertagov.com/news/component/k2/item/3316-rwanda-seeking-400mw-electricity-from-ethiopia.html

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Kessem to commence sugar production

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Kessem will commence production by the coming December, according to general manager of Kessem sugar development project.

The factory is under construction in Afar Regional State, 50 kilometers far from Metehara sugar factory.

“The factory is now 90 per cent complete and it will begin trial production after three months,” Kaba Merga, general manager of Kessem sugar development project told WIC.

The factory is being built mainly by Complant Group Inc., a Chinese construction and engineering company, he said.

Two Chinese sub-contractors and SATCON Construction Plc, a domestic construction firm, are also participating in the construction activities of the factory, he noted.

He said based on the agreement signed between Ethiopian Sugar Corporation and Amibara Agriculture Development P.L.C, the latter is developing sugarcane on 6,000 hectares of land.

The Corporation and Amibara Agricultural Development plc signed an out-grower agreement on March, 2014, – the latter to develop sugarcane on 6,000 hectares of land and supply it for the factory.

Kessem sugar development project itself is developing sugarcane on 1,800 hectares of land, he noted.

Factory division deputy general manager at Kessem sugar development project, Worku Chekol, on his part said the factory will use improved sugarcane crushers and modern technology to alleviate contamination.

Pastoralists, who were benefited from the villagization program carried out in connection with the sugar development project, are currently engaged in crop production, it was noted.

Kessem sugar development project is part of the government’s drive to increase the country’s sugar production capacity to 2.25 million tons during the Growth and Transformation Plan (GTP) period.

http://www.waltainfo.com/index.php/explore/15280-kessem-to-commence-sugar-production-

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Chinese company plans to produce gas by 2018

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- Prepares bid documents

The Chinese company that acquired the Calub and Hilala gas fields in eastern Ethiopia, POLY GCL Petroleum Investment Limited, this week announced that it plans to start extracting natural gas from the gas fields by 2018.

On November 16, 2013, the Ethiopian Ministry of Mines and POLY GCL Petroleum Investment Limited signed petroleum exploration and development agreements in Addis Ababa.

The agreement enables Poly GCL to develop the Calub and Hilala gas fields found in the Ogaden basin in Eastern Ethiopia. The agreement also allows Poly GCL to prospect for oil and gas in Blocks 3&4, 11&15, 12&16, 17&20 exploration blocks in the Ogaden basin.

According to Li Wei, general manager of Poly GCL, since signing the PSA, Poly GCL organized a competent project team and set up a management system in accordance with international petroleum industry practice. “We have submitted the 2014 work program and budget, finished the comprehensive geology and geophysical study, signed the contract with a company to begin the Environment Impact Assessment (EIA) study,” Wei told The Reporter via email.

According to Wei, Poly GCL is in the process to hire a company that would undertake a seismic survey and drill exploration wells for additional discovery. “We are preparing bidding documents for seismic and drilling work tender,” Wei said.

According to the current plan, the first stage of the project will produce around 3 million tons of LNGs (Liquefied Natural Gas) annually and is expected to go into production in 2018. According to the exploration and development plan, 4 billion cubic meters of natural gas will be produced each year from Calub and Hilala block and option is to transport the gas northward through a pipeline of 800 km long to Djibouti port and finally market the products in the international market.

As to the figure of total investments, the company said it can only be estimated after certain exploration work and the completion of the Master Development Plan.

“Empirically, we have started both the exploration and construction work, for instances, the site survey, the bidding process for different packages, the Preliminary Front End Engineering Design (Pre-FEED) studies, the renovation and construction of the camp site, etc.”

The company said it is planning to start the seismic acquisition of exploration in 2015 and the construction and the installation for surface engineering in 2016.

The Calub gas field was first discovered by an American oil company, Tenneco, in 1972. The Hilala gas field was discovered by Soviet Petroleum Exploration Expedition (SPEE) in the 1980s. The total gas reserve is estimated at 116 billion cubic meters. (4TCF). Eight gas production wells were made ready for production by Zhongyuan Petroleum Exploration Bureau (ZPEP), a Chinese petroleum exploration company.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2598-chinese-company-plans-to-produce-gas-by-2018

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Ethiopia Main Beneficiary of Hotels Forum

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Left to right Wayne Trouhton, CEO of HTI Consulting, Michael Wale of the Star Wood Hotels, Simon Vincent, from Hilton World Wide, Wolf gang from Rezidor Hotel, Oliver Jacques of the Mangalis Hotel Group, and Jean-Jacques of the Accor Hotel Group on the discussion of Africa’s hotel market.

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If the third African Hotel Investment Forum (AHIF) has proved propitious for any of the participating countries, one might well earmark Ethiopia. The burgeoning nation now has the prospect of seeing its international hotel brands growing to 10, with the signing of six agreements between international hotel management groups and Ethiopian real estate owners.

Playing a major role in all of these agreements was Calibra Hospitality Consultancy & Business Plc, whose managing partner, Yonas Moges, remembers an international company moving a conference four years ago from Ethiopia, where it was intended to take place, to Dubai, because it wanted to find a hotel able to accommodate all 500 of its guests. The two international standard hotels at the time, Hilton and Sheraton, had 100 rooms each.

“This forced them to change the meeting to Dubai,” he said.

The AHIF was officially launched on Tuesday, September 30, 2014, at the Sheraton Addis Hotel, by Prime Minister Hailemariam Dessalegn. It drew 500 participants, including international branded hotels, consultancy firms and hotel developers, from around the world.

The Forum, organised by Bench Events, was intended to take place at the Intercontinental Hotel in Nairobi Kenya, but, ironically, had to be moved to Addis Abeba because of space limitations. It had more than 37 sponsors, including ACCOR, Carlson Rezidor Hotel Group, Hilton Worldwide, Mangalis Hotel Group, Marriott International, InterContinental Hotels Group (IHG), Starwood Hotels & Resorts International and the Wyndham Hotel Group. The event is organised at a time when Addis Abeba has only three internationally-branded hotels in business – Sheraton Addis, Hilton Addis and Radisson Blu – with 869 rooms. These numbers pale in comparison to some major African countries, such as Nigeria and Morocco, with 40 and 29  international hotels, respectively, with 6,514 and 4,828 rooms, according to data from World Hospitality Group. Egypt has 21 such hotels, according to Yonas.

However, tourist flows to Ethiopia continue along an upwards trajectory, reaching 724,000 during the 2013/14 fiscal year – a 12pc growth. It is, however, still lagging behind Kenya’s 1.5 million tourists and Tanzania’s 1.2 million.

Prime Minister Hailemariam, in his speech at the Forum, said that his government was aware of the problems and had set up the Tourism Transformation Council, which he chairs, with 16 members, including ministers, regional state presidents and industry stakeholders.

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Haile Gebresillasie, Olympic gold medalist and hotel owner (left) explaining about Ethiopian hotel industry for Patric Fizgibbon, senior vice president development, Europe and Africa of the Hilton World Wide (right), and Yonas Moges, managing partner of Calibra Hotel Hospitality & consultancy business.

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The shortage of international hotels in Africa, especially Ethiopia, where diplomats are coming for African Union (AU) and United Nations (UN) conferences, is what is driving the development of such hotels, according to David Tarsh, managing director of Tarsh Consulting and head of media at the AHIF. Addis Abeba stands at third position globally with 118 diplomatic missions, following Brussels with 185 and Washington with 176.

The two-day forum, which attracted 115 hotel development investors, with half of the 500 participants from Africa – mainly Kenya, South Africa, Nigeria and Ethiopia – saw a flurry of talks and deals among stakeholders, with several hotel groups signing deals with counterparts in Ghana, Nigeria and Uganda, in addition to Ethiopia, in the days before, during and after the Forum. At the conference venue itself, a management agreement was signed between the Wyndham Hotel Group’s Ramada Brand and Ethiopia’s ADM Business Plc for the development of a four star hotel, with 136 rooms. It was also announced that Radisun Blu, of the Mangalis Hotel Group, had agreed to sign contracts with two businesses from Uganda and Ghana.

The other cooperation agreement signed during the event was between World Hotels, which has 500 hotels worldwide, and the African Azalai Hotels Group, with 20 hotels.

There were six agreements in all for international hotel brands in Ethiopia. Marriott has had a deal with Sunshine Construction for the past four years, and their hotel, located on Cameroun Street, is expected to begin operations in 2015. The latest deals, however – signed between Saturday, September 27,2014 and Tuesday, September 30, 2014 – included Aschalew Belay Hotel Projects and the Louvre Hotel Groups to open the Golden Tulip Addis; Tsemex and Intercontinental Hotels Group to open the Crowne Plazza Addis; Wyndham Hotel Group and ADM Business Plc for the Ramada Addis Hotel; Accor Hotel Group with Enyi General Business for the Pullman Addis Hotel and Best Western International with Great Abyssinia Plc and Noah Real Estate for the Best Western Plus and Best Western hotels. All these hotels are expected to be opened between 2015 and 2017, with the next year seeing Crowne Plaza-Marriott and Ramada Addis coming into business. Last on the list will be Pullman Addis in 2017.

“All of these deals are taking place in Africa at this time because the economic tourism growth of Africa is four percent, while it is just 2.5 percent on other continents,” said Tarsh.

According to data obtained from the Ministry of Finance & Economic Development (MoFED), the contribution of tourism in income revenue to Ethiopia’s economy has increased over the last three years – from 17 billion Br in 2010/11, to 18.7 billion Br and 22.2 billion Br, respectively, over the next two years.

Investors want to invest their money where the returns are high, and in countries where there are efficient local partners to work with; this attracts international hotels to come and invest in Ethiopia, said Trash. However, David Grossnikalus, Starwood Hotels representative, operating with 1,200 hotels in 100 countries, including the Sheraton, feels that architectural designs in Ethiopia fail to meet the standards of international hotels.

On the other hand, inbound tourist arrivals and planned events and conferences are growing faster than the supply of international standard hotels and accommodation in Addis Abeba, with the gap expected to widen, according to a 2011 study by Awash International Bank. Awash estimates that the gap will increase from 1.3 million hotel nights in 2015 to 3.1 million in 2020, the research use the number of the rooms for all sample years is same with the 2011.

Amin Abdulkadir, Minister of Culture & Tourism, says that the Tourism Transformation Council, Ethiopian Tourism Board and the Ethiopian Tourism Organisation will solve all problems in the sector starting from the next fiscal year, citing as evidence that his ministry will finally be able to implement the long awaited hotel standardisation by the end of this fiscal year. He also believes that graduates from government training institutions will address the lack of skilled human resources.

“Within the coming two years, international branded hotels will be common in Ethiopia,” said Tarsh. “So, the old hotels should be refurnished, relaunched and reflagged, in order to balance the hotel development of the country.”

So far, three additional international brand hotels will join the Ethiopian sector soon and make the total number six, along with the Hilton, Sheraton and Radison Blu. The management companies who have signed agreements to join the sector are the Marriott, Golden Tulip Addis Abeba and Crowne Plaza Addis.

In addition to the 209-room Courtyard by Marriott Addis Abeba, opening in 2016, there will also be a 104-unit Marriott Executive Apartments Addis Ababa, opening in 2015.

The government is ready to amend policies that are bottlenecked for the development of the whole tourism value chain, creating problems related to customs and logistics, said Solomon Tadesse, chief executive officer (CEO) of the Ethiopian Tourism Association.

http://addisfortune.net/columns/ethiopia-main-beneficiary-of-hotels-forum/

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Credit Suisse delays USD 1.4 bln loan for railway project

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Credit Suisse, a syndicate of banks and Export Credit Agencies, has delayed a USD 1.4 billion loan, which it has agreed to extend to the Government of Ethiopia  for the financing of the Awash-Woldiya railway project, due to the Environment Impact Assessment (EIA) report, The Reporter learnt.

According to reliable sources approached by The Reporter, the reason that prompted the bank to withhold the anticipated loan is in connection with the impact assessment that was carried out and submitted by the Ethiopian Railways Corporation (ERC) that is said to have failed to meet the Equator Principles up on which the bank considers it as a guiding principle for evaluating EIA. Equator Principles is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects and is primarily intended to provide a minimum standard for due diligence to support responsible risk decision-making.

The Corporation has been planning to build the second longest railway line in the country that stretches from Awash to Woldiya/Hara Gebeya passing through Kombolcha town. The planned 447-km-long railway also includes an underground tunnel which is some 25 KM long.

Credit Suisse had hired Pricewaterhousecooper (PwC) as its main consulting firm with a responsibility of reviewing and evaluating the EIA conducted by the corporation.

This railway project, which is estimated to cost of some USD 1.7 billion, demands a strict EIA, already undertaken by a couple of companies in four lots. The findings of the impact assessment was provided to Credit Suisse earlier and was expected to draw the required project finance under long-term loaning scheme.

The Equator Principles and the International Finance Corporation (IFC) Performance Standards are crucial requirements set by the bank to meet the issues raised in the EIA. From a total of 37 subheadings that are expected to be met under the Equator Principles the EIA have failed in 17 subheadings, according to sources.

Meanwhile, sources said that if the concerns raised in the EIA could be rectified then the Corporation would be able to get the financing for the project.

However, Dereje Tefera, communications directorate director at the ERC, denied the report and claimed that the loan has already been secured.

However, The Reporter has learnt that the required loan, which was expected from the Turkish EX-IM Bank has not been earmarked until last week. Ethiopian Foreign Minister Tedros Adhanom (PhD), who was in New York last week to attend the 69th UN General Assembly, twitted from from the Big Apple that he had a “fruitful” meeting with his Turkish counterpart and discuss on possible ways of securing the loan.

The Ethiopian government awarded the turnkey project to a Turkish company – Yapi Merkezi – two years ago while the Turkish EX-IM Bank agreed to lend some USD 300 million.

However, an official of the Ethiopian Railways Corporation, who requested anonymity, told The Reporter that the project may commence this week. Asked about the source of finance the official declined to comment on the issue.

The project connects the northern and eastern economic and traffic corridors of Ethiopia and provides a vital link to Addis Ababa and the Djibouti Port – the main import and export terminal for the region. The railway will connect the lines from Mekele to Hara Gebeya and then Addis to Djibouti.

http://www.thereporterethiopia.com/index.php/news-headlines/item/2599-credit-suisse-delays-usd-14-bln-loan-for-railway-project

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Filed under: Ag Related, Economy, Infrastructure Developments, News Round-up Tagged: Addis Ababa, Business, Economic growth, Ethiopia, Ethiopian government, Investment, Millennium Development Goals, Sub-Saharan Africa, tag1

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SOP production from kainitite brine proving commercially viable

Positive implications for upcoming Allana Potash SOP focused PEA due in December – January

South Boulder Mines (ASX:STB) has completed the prefeasibility study preliminary process design for potassium sulphate (Sulphate of Potash) production at its Colluli Potash Project in Eritrea.

Additional metallurgical test work has reduced Capex and Opex from the initial design. This, along with improved yields, is expected to have a positive economic impact on the project.

Achieving all this through a simple, proven and reliable process with low energy inputs and high yields is another positive.

Potassium yields of more than 80% have been achieved to date with higher yields expected from the brine recovery circuit.

The company expects to deliver the Pre-Feasibility Study in February 2015 and the Definitive Feasibility Study in mid-2015.

South Boulder has been pursuing a modular and scalable approach towards developing the project, which has a large resource of 1 billion tonnes of potassium bearing salts, all of which are suitable for the production of potash fertilisers, and is close to the coast.

The company also has a relationship with the Eritrea Government. It and the Eritrean National Mining Company (ENAMCO) are equal shareholders of the Colluli Mining Share Company (CMSC) which will develop the Colluli Potash project.

“The most exciting thing about the Colluli development path is that we actually lower our cost base to make a product with a substantial price premium,” managing director Paul Donaldson said.

“We are extremely happy with the progress the project team has made on the processing plant design and testwork.

“The simplicity of the process, the utilisation of all potassium bearing salts, the highly favourable yields and the robustness of the mine plan are positioning the project for an exciting future.

“Colluli is a potash resource of global significance and the work that has been done over the past 18 months is creating a solid platform that underpins a compelling development story.

“We are looking forward to the completion of the preliminary feasibility study, and are in the process of collecting samples to provide feed material to pilot a number of elements of the process to support the definitive feasibility study.

“Building a platform for growth and adopting the principles of modularity, resource utilisation and risk mitigation are at the core of our go forward strategy, and the Colluli Mining Share Company board is aligned to that approach.”

Preliminary Process Design

As part of the PFS processing design, the company has successful completed further metallurgical test work that was resulted in the elimination of some grinding and thickening infrastructure from the initial process design.

Potassium yields from flotation tests in excess of 80% have been achieved from test work to date.

Overall recovery will be further enhanced by capturing the brines leaving the processing plant and processing them through a series of recovery ponds.

The precipitated potassium salts from the recovery ponds will be reclaimed and combined with the processing plant feed streams.

Colluli Potash Project

The Colluli Potash Project is located within the Danakil Potash belt and has a shallow Resource of 1 billion tonnes of potassium bearing salts, all of which are suitable for the production of potash fertilisers.

It is also just one of three projects globally to contain kainite salt – the key salt for Sulphate of Potash (SOP) production – in solid form.

SOP has historically enjoyed a 35% price premium over potassium chloride though this has grown to over 80%, making it likely that Colluli would produce additional revenue of more than US$290 per tonne.

Colluli is also the closest SOP resource to the coast globally and has the most favourable coastal access from the Danakil depression.

It is just 75 kilometres to the designated loading point at Anfile Bay and 180 kilometres from the Port of Massawa – a 4 berth bulk and container terminal.

The project’s location on the east coast of Africa also allows the product to be export to Asia and Europe.

The switch to SOP production has also resulted in a substantial reduction in strip ratio to 2.3:1 from 14:1, which has in turn reduced estimated mine cost to $75 per tonne from $224 per tonne.

Mine life has also soared to 200 years from the previous 17 years.

The production process is also simple and proven.

Colluli’s key salts – kainite and sylvite – can be purified using simple liberation and conventional flotation processes.

The combination of the purified salts results in an ambient temperature, high yield conversion directly to SOP.

In addition, Colluli has the advantage of starting with salts rather than brine, which reduces footprint size, improves reliability of productivity, and reduces complexities of brine chemistry management.

South Boulder has also adopted a modular development philosophy offering expandability rather than a single large scale development.

This has the impact of reducing capital risks; optimising processes; better capital management; and ease of Expandability.

Its infrastructure solution is also based on modularity, simplifying logistics and reducing earthworks.

Drilling to secure samples for chemical analysis is underway while field work has also been completed to confirm the location of the recovery ponds for the processing plant; map and inspect the road route between Colluli and Anfile Bay; and determine suitability of material along the route as road aggregate.

Analysis

Proactive Investors believes the improved capital and operating costs combined with improved yields from Colluli are expected to have a material positive economic impact for South Boulder Mines.

To add to the attraction, the use of floatation to process Colluli salts is a low cost and well understood process that could place the project in bottom quartile of operating costs for SOP production.

We also continue to highlight other drawcards at Colluli such as the large 1 billion tonne, the suitability of the resource for SOP production, its proximity to coast, the modular approach to development and the company’s relationship with the Eritrea Government.

Share price kickers ahead include:

- Finalising the Resource in the third quarter of 2014;
– Results from Colluli drilling;
– Delivery of the Pre-Feasibility Study in February 2015;
– Delivery of the Definitive Feasibility Study in mid-2015;
– Completion of the Social Environmental Impact Assessment in the third quarter of 2015; and
– Mining Licence application in fourth quarter of 2015.

The company is well-funded with $9 million in cash at the end of June 2014, and also recently attracted a $1.8 million investment from the Hong Kong based Kam Lung Investment Development Company (KLID).

KLID will look to secure an offtake deal for potassium sulphate on commercial terms acceptable to the CMSC board.

Sourced here  http://www.proactiveinvestors.com.au/companies/news/57964/south-boulder-mines-lowers-opex-and-capex-at-colluli-potash-project-57964.html

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Related posts

-  Allana Potash Initiates Preliminary Economic Assessment On Production Of Sulphate Of Potash

-  Allana Potash’s Underappreciated Rich Potassium Sulphate (SOP) Resource – An Analysis

-  Africa’s First MOP/SOP Producer Could Be A Game Changer

-  Ethiopia’s rich Danakhil MOP & SOP resource may prove a National Treasure in a thirsty & hungry future

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Note: This article does not necessarily express the opinion of this blogger, although some points I believe are worthy of consideration, and I think China, the US, India, Turkey, the Middle East and others deserve mention in the conversation. In fact it appears the entire world has more a hand in Africa than any other continent. Hopefully the AU’s efforts at cohesion and self determination will change that dynamic in due course.

Part 1 here  The new scramble for Africa (part 1)

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June 25, 2014 — In a way starkly reminiscent of colonialism, multinational corporations are supporting the construction of new roads and railways that will facilitate the extraction of African resources.

The Berlin Conference (1884 – 1885), the outcome of which was the dismantlement of the African continent and nations and the artificial construction of the 1872 Colonial Africa

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The author of Capital in the Twenty-First Century has spurred an energetic debate about capitalism and inequality. Here, he talks to The Africa Report about democracy, markets and industrialisation.

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Thomas Piketty – economist / Professor of inequality

7 May 1971
Born in Clichy, Hauts-de-Seine, France

1993
Earned a doctorate in economics from the Ecole des Hautes Etudes en Sciences Sociales

1993-1995
Worked as an assistant professor at MIT, the Massachusetts Institute of Technology

2006 
Helped to establish the Ecole d’Economie de Paris

2014
Published Capital in the Twenty-First Century in English

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The Africa Report: What lessons on inequality are there for Africa from Europe’s 20th century?

Thomas Piketty: It’s important to think ahead about the kind of institutions, in particular progressive taxation and welfare states, that we gradually want to develop in order to ensure that this growth that will come [in Africa] can be distributed in a balanced manner and we don’t get to the kind of extreme and excessive concentration of wealth and economic power that we had in Europe up until the First World War.

In France in 1914, people didn’t want progressive taxation, even with a top rate of 2%. Then suddenly in 1920, the same political groups that refused the income tax with the 2% tax rate voted for an income tax with a top tax rate of 60%. This is largely due to the war-related shocks but also after the Bolshevik revolution in 1917.

Many rich people in France and in the West thought, after all, maybe it’s better to have progressive taxation than to have expropriation.

Do you need shocks? Won’t democracy do the trick?

I believe in democracy and in democratic forces, so I’m certainly not saying that you need wars, violent shocks or revolutions to make things happen. You can achieve a number of things through democracy, and I certainly believe in new forms of mass mobilisation using new information technologies to spread information.

But sometimes the elites invent a kind of persuasion apparatus that can be quite powerful in order to avoid the consequences of universal suffrage and electoral democracy. Democracy can be captured, in particular the laws governing democracy itself and the financing of political parties.

The financing of the media is important. In the US today there is certainly a big concern that rising inequality leads to rising inequality in political power and the capacity to influence the political process.

What about in emerging economies, where a hot topic is democracy versus authoritarian states?

I think the rise of democracy, the rise of a legitimate state and government, and trust in the government’s ability to control a significant part of the countries’ resources, raise tax revenue and spend it well – all these processes go together.

It’s very difficult to talk about the rise of democracy or the rise in trust in an elected multiparty system without talking about the substance of what the government is delivering: if the school system is working and if the roads are being repaired.

And so each country has its own very complicated political, cultural and social history of how people come to agree or come to disagree about what the government can do, and should the government exist with these kinds of boundaries or this kind of political community of people that you put together.

I think what has been very harmful in Africa and across the world is the belief after the fall of the Berlin Wall that all we need is market competition and we don’t want strong government, in fact we need weak governments.

I think this was a terrible mistake because if you want to have a well-functioning market institution, you also need strong governments that are able to pay their teachers, their judges, their policemen, their nurses well so that they do their jobs.

There’s no way that with 10% of GDP in tax revenue or sometimes less in some African countries, you can talk about democracy or talk about exchange because the bottom line is that you don’t have money to pay your teachers or road builders [...] I think, in a way, we’ve been playing with Africa as a field experiment, with a very radical discourse against government, which of course we did not apply at home or at least not as radically.

What about industrialisation? How difficult would that be given that, as you point out, 20% of African capital is held by foreigners. Does it complicate matters?

Foreign investment is complicated – it’s like a drug or slow poison. It can be useful as long as it doesn’t take proportions that are too large. When you have a significant part of your capital owned by foreign entities, it often leads to cycles of political tensions and big political cycles with groups either supporting the foreign owners, sometimes in a very unfair and inequitable manner, and sometimes expropriating the foreign ownership in a way that is not so efficient. I think it’s important to realise that basically no country in history has become rich through foreign investment.

What about African countries that struggle with inequality?

In the case of South Africa, we have some of the data and there’s evidence that in the dreams of the post-apartheid period, if anything the top income groups have taken a bigger share of income growth. To be honest, at least we have the data for South Africa. There are countries where maybe there’s been the same situation or one that is even worse, but we don’t see it.

What about the view from another side of the debate? One of Margaret Thatcher’s ministers said that the only problem with unearned income is that there’s not enough of it. That’s why they’re going to broaden the base of home ownership and privatise state companies.

To some extent I believe in broad ownership of capital, and I believe in private property, not only as the condition of economic efficiency but also as a condition for personal freedom. It’s just that I want to make sure that we’re indeed going to increase the spread of wealth, which is often heard in order to defend privatisation or other policies, but in fact that’s going to benefit only a small group of the population.

Also, whatever the level of equitable property distribution that you achieve, I think it’s important to balance the rights of capital owners with the rights of the workers and the rights of other parties involved [...] In France, the success of German exporters and German corporations is making some people change their view on this debate. Workers have voting rights on the boards of German corporations even when they don’t have any stake in the capital. Apparently that is not preventing them from producing good cars.

After the fall of the Berlin Wall some people thought that having a shareholder company with all power given to the shareholders is the only way to organise human activity, but this is crazy. This old debate, about what we used to call the mixed economy, has taken new forms today. In a way, it’s only beginning.

Sourced here  http://www.theafricareport.com/North-Africa/foreign-investment-is-like-slow-poison.html

Africa’s share of world agricultural trade has increased in recent years after decades of decline, and trade among African countries has been on the rise. Both trends have boosted Africans’ ability to access food and distribute it to the neediest during hard times, according to a report released today at the annual Regional Strategic Analysis and Knowledge Support System (ReSAKSS) conference in Addis Ababa, Ethiopia.

The conference, which focuses on this finding and others from the 2013 Africa-wide Annual Trends and Outlook Report (ATOR), is organized by the African Union Commission (AUC), in partnership with the International Food Policy Research Institute (IFPRI).

Conference delegates will discuss the importance of improved agricultural trade performance and competitiveness to enhancing the resilience of the poor and vulnerable. They will review the latest evidence tracking Africa’s agricultural progress against key Comprehensive Africa Agriculture Development Programme (CAADP) indicators. They will also discuss countries’ progress toward evidence-based policy planning and implementation through the establishment and operation of Strategic Analysis and Knowledge Support Systems (SAKSS) platforms and the strengthening of mutual accountability through regular and comprehensive agriculture joint sector reviews.

The report found that Africa’s agricultural exports accounted for 3.3 percent of world agricultural trade in 2009-2013, up from 1.2 percent in 1996-2000. While still small, the jump represents a threefold increase. Moreover, Africa’s agricultural exports have quadrupled in value terms and doubled in caloric terms. And the share of intra-African trade has doubled: nearly 34 percent of agricultural exports originating from African countries now go to other African countries.

The findings are significant because agricultural trade in general, and intra-African trade, in particular, can be a critical element to ensuring that the poor and vulnerable are able to remain resilient in the face of economic shocks and severe weather events.

“While the situation is far different from that of the 1960s, when African countries dominated global markets, the recent performance indicates that Africa can become a major player again,” said Ousmane Badiane, Director for Africa at IFPRI. ”Now countries need to sustain the policies and institutional reforms and scale up the investments that made this change possible.”

The report attributed Africa’s growing share of world agricultural exports to improvements in trade infrastructure, such as telecommunications, success in integrating global and regional markets through preferential trade agreements, improved economic growth, and an increase in world prices of some raw materials.

It also found that diversity of crops had helped boost trade. At the end of the 1990s, the top 10 agricultural exports made up 51 percent of Africa’s total agricultural exports. Since then, African agricultural exports have become more diversified and more competitive, so that by 2010, the top 10 agricultural exports accounted for 40 percent of total exports.

Fueled by both economic growth and population growth, agricultural imports have risen considerably faster than exports. As a result, the agricultural trade deficit rose from less than US$1 billion to nearly $40 billion. This highlights the tremendous challenge facing African countries and the need to deepen the reforms and scale up the efforts that have accelerated exports over the last 10 years.

“The renewed commitment in Malabo by African heads of state and government to redouble efforts to boost competitiveness and trade, in global as well as intra-African markets, could not have come at a better time,” said Abebe H. Gabriel, director of the Rural Economy and Agriculture Department at the AUC. “It is a step in the right direction.”

The report’s findings show that African countries have become more competitive in regional markets and that faster growth of demand in these markets has also contributed positively to trade performance by African countries. The findings also show that decreasing barriers to regional trade would further boost the recent growth of intra-African trade and allow countries to take advantage of the stabilizing effects that often accompany expanded regional trade. Domestic food markets can be stabilized by expanding regional trade to buffer shocks to individual countries. Regional trade can help mitigate the effects of weather shocks in any one country. The report shows that about 40 percent of the time over the last 30 years (four out of every ten years), the impact of losses in maize production due to drought might have been mitigated by trade.

Trade policies should be aimed at reducing transport and other transaction costs and increasing agricultural productivity to improve the livelihoods of the poor and vulnerable and enhance their resilience to shocks. For instance, the report notes that, in the case of the Economic Community of West African States (ECOWAS) and the Common Market for Eastern and Southern Africa (COMESA) countries, reducing overall trading costs by 10 percent would raise regional cereals exports by about 20 percent on average over the next 15 years. The impact would be at least 2.5 times that much in the case of major staples such as roots and tubers. Raising yields by the same magnitude would have an even bigger impact on regional exports, with increases of at least 30-40 percent across nearly all commodities. Specifically, the report recommends that governments should:

Expand markets with better transport infrastructure to make it easier to move crops from surplus to deficit zones;

Invest in science and technology to raise agricultural productivity and enhance the capacity of domestic agricultural sectors to supply local markets and adjust to shocks;

Eliminate nontariff cross-border barriers to foster market integration at the domestic, regional, and international levels; and

Invest in social safety net programs and adopt more conducive policies to mitigate the potential destabilizing effects of trade while maximizing its positive short- and long-term benefits for growth and food security.

Sourced here  http://africagreenmedia.co.za/recent-expansion-of-africas-agricultural-trade-bodes-well-for-food-security-resilience/

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Africa keeps it interesting for Bayer business development boss

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“There are so many more interesting things to tell when coming back from the bush in Côte d’Ivoire or Tanzania or Ethiopia, than coming from a meeting in Brussels or Frankfurt.”

So says French-born Eric Bureau, head of business development for Africa, at Bayer CropScience, a division of the German healthcare and chemicals giant Bayer.

Two years ago the company reviewed its African operations and came up with a plan to significantly ramp up its presence. “A number of multinational companies are looking at Africa with new eyes. Africa is experiencing strong growth in many sectors, and agriculture is clearly also part of that growth,” Bureau told How we made it in Africa at the company’s headquarters in Monheim, Germany.

Selling more seed

Bayer CropScience produces a variety of agricultural chemicals and seeds. In Africa it especially wants to boost seed sales – notably cotton and rice – an area where it has been lagging some of its competitors.

Its first genetically modified (GM) cotton seeds were sold in South Africa last year, and cotton trials have been conducted in Cameroon.

Many African countries however don’t allow the growing of GM crops, and the challenge is to ensure GM seeds don’t find their way into neighbouring countries where they have not been approved. Bayer however is comfortable in Cameroon because the cotton industry is tightly controlled by a government-owned company which distributes inputs to small-scale farmers.

But the lead times for these projects are significant. The company started its first cotton trials in Cameroon in 2012 and expects regulatory approval next year. Sales are only anticipated to start in 2018.

Courting small-scale farmers

Agriculture in sub-Saharan Africa remains dominated by small farmers. And although Bayer’s business traditionally focused on large commercial projects and government tenders, it is now actively targeting small-scale farmers. “This smallholder sector was relatively unknown and untouched by us, and also many of the agricultural input suppliers,” explains Bureau.

Doing business with these millions of small farmers – who live in remote areas with little access to finance – is however easier said than done. Bayer has therefore introduced smaller, more affordable pack sizes and is also involved in ‘demonstration farms’ that highlight the benefits of modern farming technologies.

Competing for talent

Human resources also pose a challenge to Bayer’s African expansion plans. “In many African countries it is difficult… to recruit people who have the skills, the knowledge and also the business approach we are looking for,” says Bureau.

And retaining talent can also be difficult. “Particularly at a time when not only Bayer is investing in Africa, but a number of multinational companies. So there is a clear competition to attract and retain the best people.”

Local manufacturing not yet feasible

In Africa, Bayer CropScience currently only manufactures in South Africa, the continent’s most sophisticated economy. While it has some initiatives to locally refill and repackage products, Bureau says the limited size of individual markets and cross-border trading challenges make full-scale manufacturing in other countries unfeasible.

“Establishing a plant in Africa would only make sense if there is easy access to other countries, and this is not the case today. There is not one single country, apart from South Africa, that can justify a manufacturing unit. The others do not have sufficient market size to justify investment in a plant.”

Feeding the world

The crop protection and seeds industries are fiercely competitive. Bayer’s competition includes generic products from India and China as well as companies such as Syngenta, BASF and DuPont.

However, the gap between Africa’s agricultural potential and actual output is so wide that there is certainly ample room for all players in the market.

Bureau is astonished that Africa still imports $35bn of food every year, especially considering the continent’s favourable growing conditions.

“Africa is certainly part of the solution to feed the planet in the year 2050, or the next century, because there is huge potential to increase the yield of already existing crops.”

http://www.howwemadeitinafrica.com/africa-keeps-it-interesting-for-bayer-business-development-boss/43971/

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Ethio-Djibouti Railway Project Well Underway

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Some 55 percent of the Sebeta-Dewele railway project, which is part of the bigger project that would connect Ethiopia with Djibouti, is completed, according to Ethiopian Railway Corporation.

Briefing the 6th Ethio-Djibouti Joint Commission Meeting that opened on Wednesday, October 7, 2014 on the progress of the project on the Ethiopian side, Chief Officer of Ethio-Djibouti Railway, Yehualashet Jemere, said the Sebeta-Mieso 317 km and Mieso-Dewele 339 km construction, including the bridges, anti-pulling test for bolt, static load test, and other civil works are well in progress.

He said about two third of the project was finalized in the past two years. Activities are currently underway to complete the rest of the work in the next 18 months, Yehualashet added.

His Djiboutian counterpart Mohammed Khaire said 50 percent of the project on the Djiboutian side is also finalized.

Ethiopian Transport Minister Werkineh Gebeyehu told ENA that the Sebeta-Djibouti Railway Project is progressing as per the schedule.

The Minister underlined that the railway would add value to the nation’s economy by reducing transportation cost and attracting investors.

The railway will enable Ethiopia to be competitive in the international market by curbing logistical costs caused by the current poor transportation system, Werkineh indicated.

According to him, the railway system will reduce the travel time from Ethiopia to Djibouti by half, to less than ten hours with a designated speed of 120kms/hour.

The railway will have 17 major stations and passes through major cities including Bishoftu, Adama, Metehara and Dire Dawa. The 107km from Sebeta to Adama line is a double track while the rest 549 km is a single track rail, it was learned.

Djiboutian Minister of Equipment and Transport, Moussa Ahmed Hassan, on his part said the project is implemented effectively and is progressing well on both the Ethiopian and Djiboutian side.

Aware of the importance of railway infrastructure, Djibouti and Ethiopia decided to build a new railway line with standard gauge (1.435 m) and electrical traction, the minster stated, further appreciating the Ethiopian competency in railway construction projects.

http://213.55.98.22/enae/index.php?option=com_k2&view=item&id=2384:ethio-djibouti-railway-project-well-underway&Itemid=260

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Bombardier Transportation lands rail contract in Ethiopia

BERLIN – Bombardier Transportation has landed a contract to deliver mainline signalling for a 400-kilometre stretch of rail in Ethiopia.

The order awarded by Turkish construction company Yapi Merkezi, which is delivering the design and construction of the project, has a value of approximately US$45 million.

“This is one of the longest lines tendered as a turnkey project in sub-Saharan Africa,” Yapi Merkezi board member Erdem Arioglu said in a statement Wednesday.

“Yapi Merkezi went through a very detailed selection process to determine its suppliers and subcontractors and Bombardier was selected due to its proven track record and its successful, long-term co-operation with Yapi Merkezi on similar projects worldwide.”

Bombardier Transportation is headquartered in Berlin and is a unit of Montreal-based Bombardier Inc. (TSX:BBD-B.TO – News).

https://ca.news.yahoo.com/bombardier-transportation-lands-rail-contract-ethiopia-195933446.html

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International hotel companies focusing on Ethiopia

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Last week government delegations, investors and senior executives from some of the world’s leading hotel brands descended on Ethiopia’s capital, Addis Ababa, for an annual hotel conference. The more than 500 delegates at the Africa Hotel Investment Forum (AHIF), discussed investment opportunities in the region, announced deals and forged partnerships.

The AHIF was initially planned for Nairobi but in June organisers announced it would be moved to Ethiopia due to limited space to accommodate increased numbers of exhibitors.

However, some stakeholders in Kenya believe the move might have been prompted by insecurity and travel warnings against Kenya at the time.

Demand far exceeds supply

Ethiopia is one of the fastest growing economies in Africa and often cited as an attractive destination by business leaders because of its 90m population and vast agricultural resources.

However, Ethiopia has a significant shortage of quality hotel rooms. A September report by Awash International Bank projected demand for hotel nights will hit 1.3m next year. But the East African nation currently has just three international hotel brands, namely Sheraton, Hilton and Radisson Blu.

This is set to change following announcements at AHIF by other players seeking to enter the market. The Wyndham hotel group announced it will open its first property in Ethiopia early next year. The US group has signed a management agreement for a 136-room hotel to be named Ramada Addis.

Adugna Bekele, owner of the Ramada Addis, said the fourth international hotel brand to launch in “one of the most vibrant and economically robust cities of Africa” will have an impact both on employment and investment.

“Once open, Ramada Addis will create job opportunities for over 250 people, serve Africa’s capital city to host its multitude of conference guests, and play a vital role in bringing foreign investment into the market,” said Bekele.

Marriott International also plans to expand into Ethiopia, as well as grow its footprint in countries such as South Africa, Nigeria, Uganda, Ghana and Rwanda. It recently acquired South Africa’s Protea Hotel Group.

Sunshine Business plc, a company owned by Ethiopian business magnate Samuel Tafesse, will open the “two five-star Marriott hotels with a total expenditure of over US$100m”. The company is developing Courtyard by Marriott Addis Ababa and the Marriott Executive Apartments Addis Ababa, which will be targeted at international travelers and executive expats seeking luxurious apartment living with hotel services.

In addition, both Best Western International and InterContinental Hotels Group announced they will launch new properties in Ethiopia over the coming two years.

“Addis Ababa is evolving at pace, with infrastructure such as the Bole International Airport now serving almost 20m passengers a year,” said Pascal Gauvin, InterContinental’s chief operating officer for India, the Middle East and Africa. “This being our first hotel in Ethiopia we will now have a presence in 13 countries across Africa.”

http://www.howwemadeitinafrica.com/international-hotel-companies-focusing-on-ethiopia/43928/

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Tanzanian cabinet ratifies Nile deal

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The Tanzanian cabinet has ratified the 2010 Comprehensive Framework Agreement (CFA) signed by upstream Nile Basin countries, known as the ‘Entebbe Agreement’.

http://www.ertagov.com/news/component/k2/item/3353-tanzanian-cabinet-ratifies-nile-deal.html

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Ethiopia – Universal health coverage for inclusive and sustainable development: country summary report

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Abstract

A low-income country, Ethiopia has made impressive progress in improving health outcomes. The Inter-agency Group for Child Mortality Estimation reported that Ethiopia has achieved Millennium Development Goal (MDG) 4, three years ahead of target, with under-5 mortality at 68 per 1,000 live births in 2012. Significant challenges remain, however, with the maternal mortality ratio at 420 out of 100,000 live births.

The government has introduced a three-tier public health care delivery system to deliver essential health services and ensure referral linkages, with level three as specialized hospitals (one per 3.5 million 5 million population), level two as general hospitals (one per 1 million 1.5 million), level one as primary hospitals (one per 60,000 100,000) with satellite health centers (one per 15,000 25,000) and health posts (one per 3,000 5,000).

One initiative contributing greatly toward universal health coverage (UHC) is the Health Extension Program (HEP) that provides free primary care services at health posts and communities. The country is at its early stage initiating insurance schemes to provide financial protection for its citizens: Social Health Insurance (SHI) for formal sector employees and Community-Based Health Insurance (CBHI) for rural residents and informal sector employees. Public facilities are expected to provide exempted services for free, and there is a fee-waiver system for the poor.

http://documents.worldbank.org/curated/en/2014/08/20272190/ethiopia-universal-health-coverage-inclusive-sustainable-development-country-summary-report#

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Investors urged to prefer Ethiopia for manufacturing

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The industrial zones being built in four major cities of Ethiopia would create opportunities for the expansion of the manufacturing industry, according to Ministry of Industry.

Speaking at a consultative meeting held on Wednesday State Minister of Industry Dr. Mebrahtu Meles said the manufacturing sector is a priority area for the government, particularly at the industrial zones of Diredawa, Hawassa, Kombolcha and Addis Ababa.

Utilizing these, Ethiopia should be a leading nation in Africa in light agro-processing industry by 2025, he said.

Dr. Mebrahtu urged the investors to use the country’s abundant human resources to realize their ambitious goal of benefitting from the sector.

During the last Ethiopian budget year, the country has obtained 68 million USD from export of food, beverages and pharmaceutical goods, it was indicated.

On the other hand, the country earned 76.2 million USD from the export of meat and dairy products during same period.

http://www.ertagov.com/news/component/k2/item/3355-investors-urged-to-prefer-ethiopia-for-manufacturing.html

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Nation capable of earning $5 billion from mining, study reveals

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Ethiopia has the potential to earn five billion US dollars annually from mining sector, a study revealed.

The study report entitled “Strategic assessment of the Ethiopian mineral sector” was launched on Tuesday, October 07, 2014 at the Hilton Hotel. The study was reportedly conducted by the assistance of the World Bank and other developmental partners from Australia, Canada, Denmark and United Kingdom.

Speaking at the launching ceremony of the study, Minister of Mines Tolosa Shagi said the country has secured more than 2.3 billion US dollars from export of gold, tantalum, opal, marble and other minerals during the last four years.

“The mineral and petroleum exploration conducted so far on limited part of the country both by the Geological Survey of Ethiopia and private companies, showed that Ethiopia is endowed with a favorable geological environment that hosts a wide range of mineral and geo-energy potentials,” he said.

Currently, over 130 companies are working in the solid minerals operations and oil and gas activities, according to the minister.

The minister noted that there is still a need for adequate transport and accountability system in order to manage the resources effectively.

Besides, Ethiopia has not benefited from its mining sectors due to limited geological data and technical and regulatory capacity, he indicated.

Senior Mining Specialist at World Bank, Kirsten Hund said Ethiopia has strong geological opportunity, which enables it to attain sustainable development which needs commitment in working hard in the sector.

Midroc General Manager, Dr. Arega Yerdaw on his part pointed out that the country would benefit a lot from the sector if it could provide fast services and make available plenty of skilled manpower in order to attract investors.

Africa’s mining income reached 120 billion USD in 2012, it was learned.

http://www.waltainfo.com/index.php/explore/15343-nation-capable-of-earning–5bl-from-mining-study-reveals

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UPDATE – KEFI Minerals re-activates mining licence application for Ethiopia project as it agrees funding

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                                  Diamond drill work at Tulu Kapi.

Panelists of the Ethiopian Extractive Industries Forum (pictured, above)

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By Kaleyesus Bekele 

Ethiopia is not much known in the mining world. Except for the small-scale gold, tantalum and gemstones exports, the country is not among the list of major mineral exporters in Africa.

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Cotton shortage hampers Textile sector earning

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Ethiopia had hoped to generate USD 350 million from textiles and garments last year. However the nation’s efforts were hampered from the low supply of cotton, power interruption and other outside challenges. In reality garments and textiles earned USD 111 million which is 31 percent of what they had hoped.

Investors are saying that there is not enough supply of cotton to meet demands. They also hope that educational institutions will focus on the industry so that more qualified textile professionals emerge.

During a meeting with stakeholders in the textile industry at Capital Hotel on October 8, Ahmed Abtew, Minister of Industry, said the government has been doing many things to help the textile industry flourish. He pointed out that three years ago the country earned USD 65 million USD but currently the textiles and garments have brought in USD 111 million.

He added that the fact that many investors do not have enough skills and low agricultural supply are other factors. The country plans to earn USD one billion from textiles at the end of the Growth and Transformation Plan (GTP), however, in the past four years it has earned USD 435 million .

When the GTP began the idea was to increase textile manufacturing companies by 48 when the GTP sunset in 2015 but currently there are 33. Seleshi Lemma, Director General of the Textile Industry Development Institute added that the cotton supply is something that really need to be addressed. He also added that companies should begin working when they say they will.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4632:cotton-shortage-hampers-textile-sector-earning-&catid=35:capital&Itemid=27

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Sugarcane farmers use beetles to tame pest

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Written by Julius Omondi for Farmbizafrica

Sugar cane farmers in Uganda are using specially bred beetles to tame the voracious white scale pest that has robbed farmers off any harvest because of their destructive nature on sugar cane.

The innovative mode of scientifically wiping out the pest was discovered and introduced among cane farmers by Dr. B. Ramesh an entomologist from Kinyara Sugar factory. The budding scientist who joined the company in 2010 found the pest a major menace in both out grower and company plantations. “Generally farmers were no longer interested in cane farming due to the losses accruing from the pest and this prompted my quick intervention,” noted Dr. Ramesh.

While on a field research, the scientist realized an outstanding observation in one of the affected cane. The cane which was affected by white scales had an internodes section that seemed to be clearing up of the pests. He took the sugar cane to the laboratory for further analysis and realized that there was a beetle (bio predator) feeding on the pest. According to him, the discovery of a bio predator was a milestone in the fight against the destructive pest. Initially the company had tried to apply the use of chemical spray which was unhealthy as well as not attainable. “In order to control the white scale using chemical, the sprayed chemical has to mix with sap in the plant for the pest to suck and eventually die. Ultimately, this means contaminating the cane hence rendering the whole procedure useless,” explained Dr.Ramesh.

Out of the 110 days of the life cycle of a beetle, the larvae stage takes about 25-30 days of the cycle period. During this stage, the larvae exclusively feed on the white scales of the sugar cane. Dr. Ramesh scientist then embarked on mass rearing of the beetle in order to use them to control the pest. The company gives out grower farmers the bio predator for free as part of their Corporate Social Responsibility.

The larvae are introduced in the sugar cane plantation at an interval of 15 days. Sugar cane cuttings from the laboratory laced with the larvae are introduced at various points of the plantation and the larvae then move into the canes in search of their food which is the sugar cane white scales pest. The larvae feed on the white scales relieving the cane of the menace and offering farmers a life line on their investment returns. One hectare of sugar cane plantation is introduced with about 250 grams of the beetle larvae.

White scale pests usually establish on internodes covered with leaf sheath. The leaves of infested canes show signs of tip drying and unhealthy pale green colour and with continued infestation turn yellow. Desapping leads to non-opening of leaves also, which also turn yellow and finally dry out. Nodal region is more infested than internodal region. In the case of severe infestation, the cane stalks are almost entirely covered by scales. When gravid, the female’s body is 1.8 mm long and 0.9 mm wide.

After egg-laying, the female shrinks and loses her pink colouration. Eggs are laid under the females scale. Upon hatching the crawlers which are young immature mobile stage wander looking for a feeding site. They insert their needle-like mouthparts and suck plant sap and do not move again.

The white scale is a serious pest of sugarcane causing yield loss both of canes and sugar content and making extensive replanting necessary. Yields losses of over 30percent percent have been reported in Tanzania while some farmers in Masindi area had reported 100 percent yield loss prior to the introduction of the bio predators. Infested crop losses its vigour, canes shrivel, growth is stunted and the internodal length is reduced drastically. Ultimately cane dries up. Such canes when slit open appear brownish red. Thus yield and quality suffer. The yield loss could range from negligible to total crop failure.

According to Dr. Ranesh, water logging, high temperature and humidity favour buildup of scale insect population. Rainwater and high wind velocity facilitate dispersal of the pest. It spreads to new areas through seed material. Men and animals passing through the infested fields also lead to spread of the pest to the adjoining areas.

http://www.farmbizafrica.com/index.php?option=com_content&view=article&id=1362:sugarcane-farmers-use-beetles-to-tame-pest&catid=19&Itemid=142

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Africa must reform energy sector to boost growth

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LONDON: Sub-Saharan Africa’s energy sector needs overhauling to help power its economic and social prosperity, instead of being an obstacle to its development, the IEA said.

The International Energy Agency, unveiling its first-ever Africa Energy Outlook at a London press conference, said increasing access to modern forms of energy was critical in a region where two thirds of the population — or 620 million people — currently live without electricity.

“A better functioning energy sector is vital to ensuring that the citizens of Sub-Saharan Africa can fulfil their aspirations,” said IEA executive director Maria van der Hoeven.

“The energy sector is acting as a brake on development, but this can be overcome and the benefits of success are huge.”
The Paris-based IEA, energy watchdog to the world’s industrialized nations, added that almost 730 million people in Sub-Saharan Africa relied on dangerous and inefficient forms of cooking, with solid biomass — fuelwood and charcoal — outweighing all other fuels combined.

Van der Hoeven told journalists in London that Africa’s energy sector needed to become “a driver rather than brake” to economic growth.

The organization concluded in its report that Africa’s energy resources were “more than sufficient” to meet the population’s needs, but also identified three specific recommendations.

The IEA called for an extra investment of $450 billion (355 billion euros) in power generation, in order to halve power outages and gain universal access to electricity in all urban areas.

It urged deeper regional co-operation and integration, which would enable large-scale power generation and transmission, and stimulate cross-border trade.

The agency also appealed for better management of energy resources and revenues in the region, with “robust and transparent processes” to encourage more effective use of oil and gas revenues.

These three recommendations would help boost Sub-Saharan Africa’s economic growth by almost a third by 2040, according to the IEA.

It estimated that they would deliver an additional decade of growth in per-capita incomes by 2040, while the proposals would also bring electricity to an extra 230 million people.

“Poor electricity infrastructures is a major barrier to economic and social developement in the continent,” added the IEA’s chief economist Fatih Birol.

“Currently if there are $3 invested in the energy sector in sub-Saharian Africa, $2 go to the project which exports African energy to other continents (Europe, North America, Asia) and $1 goes to provide domestic energy services to the Africans.”

He added: “600,000 people die every year prematurely because of the indoor pollution created by use of biomass for cooking — and this is the second cause of premature death in sub-Saharian Africa after AIDS.”

http://www.arabnews.com/economy/news/643911

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Annual conference focuses on the importance of intra African Trade

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The annual Regional Strategic Analysis and Knowledge Support System (ReSAKSS) conference was held this week at the African Union Commission from October 8 to 10.

The conference’s main discussion included the importance of improved agricultural trade performance and competitiveness to enhancing the resilience of the poor and vulnerable.

“Equitable and sustainable agriculture and rural development in Africa requires strategic investments in agriculture, natural resources and the social sector in order to enable rural communities to engage in dynamic and rewarding economic activities,” stated Professor Tekalign Mamo, State Minister of Agriculture in his opening remarks.

The decision made by African Heads of State in Maputo, Mozambique last year where it was agreed that governments should spend 10 percent of national budget for the development of agriculture, was an essential milestone in the African economic transformation. The decision put agriculture as the engine of growth for African nations to address food security and poverty alleviation programs, he said.

Ethiopia has been one of the leading countries in allocating an adequate budget for agriculture and that along with other strategic interventions, it has helped the country to register significant annual agricultural growth over the past 10 years, he added.

According to Tumusiime Rhoda, Commissioner for Rural Economy and Agriculture, during the Maputo conference, African governments also agreed to boost intra-Africa trade in agricultural commodities and service and enhancing resilience of livelihoods and production system to climate variability and other risks.

“The pursuit and achievement of these goals will also be in line with the theme of the just concluded 50th Anniversary of the OAU/AU, which is Pan Africanism and African Renaissance. It is also part of the Africa Agenda 2063 on the Africa We Want,” Rhoda stated.

During the ReSAKSS conference held this week, the delegates discussed countries’ progress toward evidence-based policy planning and implementation through the establishment and operation of Strategic Analysis and Knowledge Support Systems (SAKSS) platforms as well as the strengthening of mutual accountability through regular and comprehensive agriculture joint sector reviews.

Studies show that Africa’s agricultural export accounted for 3.3 percent of the world’s agricultural trade in 2009-2013, which is an increase when compared with previous years. The share of intra-African trade has also doubled. Currently, nearly 34 percent of agricultural exports originating from African countries go to other African countries.

“While the situation is far different from that of the 1960s, when African countries dominated global markets, the recent performance indicates that Africa can become a major player again. Now countries need to sustain the policies and institutional reforms and scale up the investments that made this change possible,” said Ousmane Badiane, Director for Africa at the International Food Policy Research Institute (IFPRI).

Studies also show that, fueled by both economic growth and population growth, agricultural imports have increased significantly faster than exports. As a result, the agricultural trade deficit rose from less than USD 1 billion to nearly USD 40 billion.
“This highlights the tremendous challenge facing African countries and the need to deepen the reforms and scale up the efforts that have accelerated exports over the last 10 years,” conference participants stated.

The conference was organized by the African Union Commission (AUC), in partnership with the International Food Policy Research Institute (IFPRI).

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4627:annual-conference-focuses-on-the-importance-of-intra-african-trade&catid=54:news&Itemid=27

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Large Quantity Importers to Benefit from Door-to-Door Delivery Service

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-  The new system will enable manufacturers to pay tax as they use their products, rather than paying for all stocked commodities

The Ethiopian Shipping & Logistics Services Enterprise (ESLSE) is delivering shipments directly to the warehouses of large quantity importers who import full containers, in an arrangement with the Ethiopian Revenues & Customs Authority (ERCA).

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The decision followed what the Enterprise called a successful pilot in September for factories at the Easter Industry Zone, which has a bonded warehouse – a requirement for the service.

This approach will mitigate the cargo congestion problem at the dry ports and enable manufacturers to receive the imported cargo on time, says Ewnetu Taye, Director of multimodal services at the ESLSE.

The multimodal system started in 2012, with a directive from the Ministry of Transport (MoT) to transport goods under a single contract, but with two different means of transportation. The carrier is liable for the entire journey, including the shipment’s delivery at the final destination. The transportation can be performed by sea, rail and or road.

The directive instructed all government shipments transported through the ESLSE to be delivered to dry ports and warehouses that are authorised by the ERCA to receive shipments. All private importers are also ordered to bring their container shipments to the dry ports and warehouses of the ERCA.

But the system faced problems from the outset, leading to the reintroduction of the uni-modal system within the same year. The Enterprise had organisational and management problems in facilitating the multimodal system, says an official at the Modjo Dry Port.

After some adjustments, the Enterprise restarted the multimodal service, transporting cargo from Djibouti to the Modjo Dry Port – 72km from Addis Abeba – and to the Comet Transport SC located in Kality. The cargo are moved to importers warehouses after tax clearance.

For the latest door-to-door delivery of containers, importers need a license for bonded warehouses – a building or other secured area to keep the imports. This arrangement allows manufacturers to clear taxes at their warehouses, only for the amount of the imported goods they have used – not all at once for all stocked commodities at the warehouses – according to Ewnetu.

“For this type of tax clearance, the importers should get a permit from the ERCA,” said Ewnetu.

A leather factory executive says that the new approach will not only cut the delivery time for shipments, but also the costs of transportation to their warehouses, as the Enterprise could hire transporters that offer low prices.

http://addisfortune.net/articles/large-quantity-importers-to-benefit-from-door-to-door-delivery-service/

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Ethiopia’s foray into Int’l capital market – lessons from Africa

For the most part, African countries long have had to rely on foreign aid or loans from international financial institutions to supply part of their foreign exchange needs. When compared with other emerging regions, Africa is the most dependent on multilateral and bilateral financing. At the end of 2011, those two sources jointly accounted for more than two thirds of public (and publicly guaranteed) external debts in Africa. In fact, half of African countries have no alternative way of accessing external financing.

Official donors’ flows are now on a declining trend in real terms as the ongoing financial crisis have pressed donor governments to tighten their budgets. African countries would also like to reduce dependence on the usual aid providers and attain policy independence and finance projects that such donors have been unwilling to fund.

Now, for the first time many of them are able to borrow in international financial markets, selling mainly Sovereign bonds. A Sovereign bond is a debt security issued by a national government. Known as a Eurobond, is denominated in a foreign currency (usually the dollar, rather than, as its name would suggest, the Euro). Still only 14 out of 54 countries have been able to issue Eurobonds on international markets, in part because the process is rather complex. In addition, many countries remain unrated and are still subject to political instability.

What is new?

The developed world has been rocked by a succession of economic and financial crises while Africa has maintained solid growth over recent years, averaging about 5% per annum. The chief global economist at Renaissance Capital estimates the economy of Sub-Saharan Africa to grow 15-fold over the next 35 years; from $2 trillion to $29 trillion. Hence, they have considerable infrastructure necessities — such as electricity generation and distribution, roads, airports, ports, and railroads, which often require resources that exceed aid flows and domestic savings.

For many African governments, Eurobonds are a means of diversifying sources of investment finance and stirring away from conventional foreign aid. Not only do these bonds allow such governments to raise money for development projects when domestic resources are lacking, they also help reduce budgetary deficits in an atmosphere in which donors are not willing to boost their development assistance. In addition, bond issuances come with fewer strings attached than money from multilateral institutions. Governments also have more control over where they direct the money.

Changes in the institutional environment, reduced debt burdens, large borrowing needs, and Low borrowing costs are some of major factors propelling the burgeoning bond sales. Reduced debt burden also allows countries to borrow in international markets without straining their ability to repay. (The median government debt–to-GDP ratio in SSA is below 40%) In addition, many countries have strengthened their macroeconomic management and improved their ability to measure debt sustainability. Sovereign credit ratings, which are a good measure for the creditworthiness of a country, capture factors like a country’s sustainability of its external financial operations, the ratio of external debt to exports; and macroeconomic stability (mainly measured by inflation performance).

Analysts credit this surge in borrowing to factors such as rapid growth and better economic policies, low global interest rates, and the economic stress in many advanced economies, especially in Europe. In several cases, African countries have been able to sell bonds at lower interest rates than distressed European economies like  Greece and Portugal could. Although borrowing costs are historically low, yields of Eurobonds from Africa are high enough to draw foreign investors.

African Eurobonds

Attracted by the prevailing low interest rates, cash-strapped African countries looking to borrow money on international private markets are increasingly turning to Eurobonds. In 2006, Seychelles became the first country in SSA (except South Africa), to issue bonds in 30 years time. After a year Ghana followed by raising $750 million. Since then Gabon, Senegal, Côte d’Ivoire, D.R. Congo, Nigeria, Namibia, Zambia and recently Kenya have joined them.

Africa’s largest economy, Nigeria, entered the markets in 2011 with a 10-year Eurobond. In September 2012, Zambia made a splash on the international private market, launching a 10-year bond at $750 million. Rwanda followed suit in 2013 with a $400 million Eurobond. Kenya made a heavily oversubscribed inaugural debut in June to finance infrastructure projects raising $2 billion. According to Moody’s, a global credit rating agency, African countries raised about $8.1 billion in 2012. Financial Times reports investors placed orders for more than $8 billion showing the strong appetite for frontier market bonds.

What are the benefits?

The main benefits of international sovereign bonds are capital expenditure financing, benchmarking and raising visibility with a larger pool of international investors. In 2007, Ghana used bond proceeds to finance energy and transport projects. The proceeds of Senegal’s $500 million Eurobond issuance let the continued construction of a major highway and the upgrade of its energy infrastructure.

Sovereign bond issuance is usually the first step for a country’s wider access to private capital as it provides a benchmark for other national issuers and acts as a indication point in the appraisal of country risk for international investors. Benchmarking for the corporate bond markets is the most important development that African economies are experiencing. For example, following the inaugural $750 million Eurobond from Ghana in September 2007, Ghana Telecom placed a $200 million issue in the international market two months later.

Countries in SSA that issue inaugural bonds to raise at least $500 million will be qualified for inclusion in JP Morgan’s Emerging Market Bond Index (EMBIG). This elevates their visibility with a larger pool of investors and set a benchmark yield for local corporations and banks that desire to issue internationally.

Although some countries were able to issue 10-year paper or above, long-dated issue remains rare, thus most debt remains constrained at one year or below. The absence of a long yield issue in these countries is attributed interest rate and inflation volatility, public finance risk and lack of demand from investors.

Is it sustainable?

Whether this borrowing spree is sustainable in the medium-to-long term is open to question. The low interest rate environment is e expected to change in near future thus raising borrowing costs and reducing investor appetite. The current fast economic growth may not continue making it harder for African countries to service their loans. Furthermore, political instability in some countries could also make it harder for both borrowers and lenders. Political instability is also a factor that could put a twist in the whole process, reducing economic growth and increasing interest rates.

In a commentary entitled “First Borrow,” Amadou Sy, deputy division chief at the, points to recent sovereign defaults such as; the Seychelles default on a $230 million Eurobond in 2008, after a sharp fall in tourism and Côte d’Ivoire’s missed $29 million interest payment in 2011, after election disputes forced it to default on a bond issued in 2010. Government issuers also bear exchange-rate risk on the service of foreign currency debt. If repayment of the bullet maturity of the Eurobond coincides with a sharp depreciation of the exchange rate, the fiscal cost of repaying will be even higher.

Ethiopia – Reasons and Prospects

Ethiopia, Africa’s fifth biggest economy and one of the fastest growing frontier markets, is to become the latest entrant into international capital markets. Ethiopia attained its first sovereign credit rating in May, in which the popular rating firms Standard & Poor (S&P), Moody’s and Fitch rated her creditworthiness as B, B1(B+) and B, respectively. The ratings put Ethiopia in the same cluster with other strong African economies such as Kenya, Ghana and Zambia. Following this, she announced to make her maiden sovereign bond debut of a 10-year note by early January. Reports show that the government carried out preparations including the selection of three international banks (Barclays, Citi and BNP Paribas) that will help to select firms that will sell the bonds on behalf of the government and also a French advisory firm, Lazard Ltd.

The bond proceeds are expected to provide financing for her various infrastructure projects (such as roads, airports and railroads) and especially projects that IFI’s have been unwilling to finance like the Great Ethiopian Renaissance Dam (GERD). This in turn reduces the domestic borrowing pressure on the economy. The expected successful issuance will make Ethiopia eligible for inclusion in JP Morgan’s Emerging Market Bond Index (EMBIG) raising her FDI visibility and set a benchmark yield for local corporations such as EthioTelecom and EEPCo that may wish to issue internationally.

According to Moody’s analysis, only a few countries could raise a $500 million Eurobond internationally without distorting their economic and financial equilibrium, issuance representing below 5% of GDP, and a debt increase below 10%.. In Moody’s estimate, of a hypothetical $500 million Eurobond issuance would represent 1.1% of Ethiopia’s GDP and a debt increase of 4.7%, which will be 7.1% of general government revenue.

Strong economic growth and a low total debt to GDP ratio of 51.6% relative to western nations put Kenya in a strong position in its heavily oversubscribed maiden Eurobond issue in June in which she raised $2 billion, the largest debut for an African nation. This came in spite of a terror attack that killed 48 people. Analysts suggest expected 2014 GDP growth of about 5.8 % might have prompted investors not to ask for a much higher yield than the 6.875% interest Kenya offered for its 10-year paper.

With a total debt to GDP ratio of 35% and an expected 2014 GDP growth of 9% (Fitch Ratings), Ethiopia is expected to achieve similar success. Julians Amboko, a research analyst at Stratlink Africa believes Ethiopia is better positioned than many SSA countries because of its debt to GDP ratio of 35%, which is much lower than Kenya’s  51% and its budgetary structure that makes it a lot more debt reliant than Kenya and therefore, could easily surpass the one billion mark in its maiden debut.

http://hornaffairs.com/en/2014/10/14/ethiopias-foray-into-intl-capital-market-lessons-from-Africa/

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World Bank Floats New Infrastructure Financing Facility for Developing Regions

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http://www.ventures-africa.com/2014/10/world-bank-floats-new-infrastructure-financing-facility-for-developing-regions/

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Bole Int’l airport expansion vital: Star Alliance

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It’s imperative to build a new airport in Addis Ababa but until then the current one should be upgraded without delay, according to Star Alliance CEO Mark Schwab. The capacity of the existing airport is saturated and cannot accommodate the rapidly growing venture of Ethiopian Airlines as well as other carriers passing through the Addis Ababa Bole International Airport, he said.

Ethiopian Airports Enterprise is currently upgrading Bole International Airport at a cost of USD 250 million.

Schwab told Capital in Frankfurt, Germany, that after the new airport is ready however, the current Bole International Airport should not be used as a second airport as it will not be economically viable to operate both of them.

Three places are slated for potential new airport construction, Dukem, 25 Kilometers East of Addis Ababa; Mojo 75 Kilometers East of Addis; or Teji 30 Kilometers West of Addis.

When asked why it was necessary to make a USD 250 million expansion at the Addis Ababa Bole International Airport, if it is going to be idle when the new airport goes operational, the CEO said that the current expansion project is vital for the growth of the industry and the city too.

“One air plane nowadays costs about USD 200 million and when you have a lot of those planes on the ground; the money spent on the expansion is relatively low when compared to what the expansion will bring in terms of revenue for the city,” he said.

“A study made 15 years ago showed that Chicago’s O’Hare International Airport generates some USD 22,000 for the city every time a plane lands; so the expansion is beneficial not only for the airline but for the city too,” the CEO explained.

The Star Alliance CEO was in Addis Ababa recently to meet with Ethiopian Airport Enterprise and Ethiopian Airlines officials to discuss the new airport expansion project. One of Star Alliance’s services to its members is to consult and support new construction and improvement projects of airports and hubs so as to build in a collaborative manner a facility focusing on a seamless travel experience for passengers.

Meanwhile, Star Alliance plans to introduce its seamless hub project in Addis Ababa next year, which involves facilities such as common check-in facilities for Star Alliance members with high components of self-service; and a ‘smooth transfer experience’ for transit passengers.

Ethiopian Airlines joined the Star Alliance group in 2011.

The new expansion project of the Addis Ababa Bole International Airport, already underway by the Ethiopian Airports Enterprise will triple or even quadruple the terminal’s capacity.

The expansion project includes the construction of a new passenger terminal as an extensions of the existing Terminal 1 (domestic and regional terminal) and terminal 2 (international terminal) as well as the construction of a new VIP passengers’ terminal.

A USD 250 million loan for the project has been obtained from the government of China, and the agreement has been signed by the Ethiopian Ministry of Finance and Economic Development and the Chinese government. The Chinese construction company, China Communications Construction Company (CCCC), is undertaking the expansion project.

The French company, ADPI formed in 2000 as a subsidiary of Aéroports de Paris, is consulting the expansion project. ADPI’s landmark projects include Terminal 3 at Dubai International Airport, the final assembly line factory complexes for the Airbus A380 at Toulouse and the A400M at Seville, the passenger terminal extension at Bogota Airport. The design work of the expansion project was done by a Singapore company, CPG and the project is expected to be completed within three years.

In a related development, Star Alliance has begun to migrate the operations of member airlines of the alliance to the new Terminal 2 at Heathrow Airport in London, where it built the Star Alliance Hub Airport.

Star Alliance has built one of the most modern airport hubs in London, with 23 of the Alliance airline members, will migrate their operations to this hub at Terminal 2 until the 22nd of October; 14 carriers including Ethiopian Airlines have already joined the new terminal.

The Star Alliance is the world’s largest global airline alliance, headquartered in Frankfurt  Main, Germany. It was founded on May 14, 1997 and the 27 current members have more than 18,500 daily departures combined. These flights reach 1,316 airports in more than 192 countries, with an annual number of more than 637.6 million passengers, representing 24.4% of the global travel market.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4633:bole-intl-airport-expansion-vital-star-alliance-&catid=35:capital&Itemid=27

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MH Gets 40m Br Contract to Design Ethiopia’s Largest Stadium

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-  The tender was announced two years ago, but was delayed following complaints from bidders

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Adey Abeba the first stadium in its kind.

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The interior design and night time view of Adey Abeba Stadium.

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Exterior grounds and main entrance view

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The Federal Sports Commission (FSC) has awarded a close to 40 million Br contract to MH Engineering Plc for the design, supervision and contract administration of a new stadium, which will accommodate 60,000 people – double the capacity of the National Stadium.

The agreement was signed by Messle Haile (PhD), MH’s general manager, and Sport Commissioner, Abdisa Yadeta, at a ceremony held at the Kuriftu Resort in Bishoftu (Debre Zeit), on Monday, October 7, 2014. The contract includes 24 million Br for design and a 640,000Br monthly fee for at least two years while the construction lasts – amounting to at least 39.3 million Br.

The tender was announced two years ago, but was delayed because of complaints from bidders over the outcome of the tender. Three out of the seven bidders were selected on architectural creativity; these included JDAW Consulting Architects & Engineer, Yohannes Abey Consulting and MH. MH emerged as the winner in both the technical and financial evaluation.

The new Adey Abeba stadium, which could cost around two billion Birr, according to Tibebu Gorfu, facility director at the FSC, will be built on the grounds of FCS Sports Academy, along the ring road near Bob Marley Square at the old Imperial Hotel. The Sports Academy rests on 67ha of land, with 30ha already dedicated to the construction of a swimming pool, volleyball field, basketball field, football field and other additional facilities.

So, the remaining 27ha will be used for the new stadium. The whole plot was given to the Commission by the government for the success of the Ethiopian football team in the tenth African Cup of Nations in the 1980s.

“The project will be wholly financed by the Ethiopian government, and we have already received 205 million Br for initial works, before the construction begins,” said Tibebu.

MH will finalise the design by February, Messele says. It will be the first Ethiopian stadium built to fulfil the requirements of FIFA (Fédération Internationale de Football Association) and the IAAF (International Association of Athletics Federations) for World Cups and Olympic Games, says Messle.

According to the document – FIFA: Technical Recommendation and Requirements for Football Stadiums – such stadiums built for hosting World Cup final games should have at least 60,000 seats, parking spaces for 10,000 cars and a 100sqm warm up area for each team.

“Other additional requirements are related to the safety of the spectators, surveillance, the technological inputs needed for the stadium, space that has to be left for different stakeholders and other general requirements,” said Messle. “MH Engineering’s design will be conducted in accordance with this document.”

MH Engineering Plc, established in 1997, has previously been engaged in the design, supervision and contract administration of stadiums in Bahir Dar, Gambella, Assosa and Nekemte. The Bahr Dar Stadium is now the largest in Ethiopia, with 50,000 seats. The company has also conducted more than 400 buildings and 15 road projects over the past 10 years, according to its website.

http://addisfortune.net/articles/mh-gets-40m-br-contract-to-design-ethiopias-largest-stadium/

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Gibe IV, V: next national projects

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Ethiopia is trying to finance the construction of Gibe IV and Gibe V hydro electric power projects that will have a combined generating capacity of over 2100 MW as part of a series of cascade dams on the Gibe River. Sources told Capital that the feasibility study of the two power plants is being finalized and the government is looking for financers for the project that will consume billions of dollars.

The projects that will be managed by the Ethiopian Electric Power will have a generation capacity of 1470 MW (Gibe IV) and GIBE V will have a capacity to generate 660 MW.

“These two dams will be the next big projects of the country right after the commissioning of Gibe III which does have a generating capacity of 1870 MW,” sources said.

The Gibe III hydropower project is now more than 80 percent complete. It is expected to start generating power early next year, when its first turbine becomes operational. The other nine turbines will be installed and become fully operational by April 2016. The power house of the project contains 10 units each having a capacity of producing 187 MW.

The Gibe III Hydro-power project, with its potential to double the current electric power generating capacity of the country, is a key part of Ethiopia’s 5-years Growth and Transformation Plan (GTP).

The financial costs of the dam and hydroelectric power plant have been estimated to be 1.55 billion Euros. The cost of a transmission line from the power plant to the nearby Wolayta Sodo Substation has been estimated at 35 million Euros.

Gibe III when completed, will supply power need for neighboring countries such as Kenya with cheap power.

Currently Ethiopia is building Africa’s largest dam (The Grand Ethiopian Renaissance Dam) on the River Nile, which is a controversial issue between Ethiopia and Egypt. GERD when commissioned will have an installed generating capacity of 6,000 MW.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4634:gibe-iv-v-next-national-projects&catid=54:news&Itemid=27

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Ethiopia eyes $2.5bln revenues of agricultural exports

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Ethiopia is planning to earn a total of over $2.5 billion revenue from its exports of agricultural products during the current budget year, which began in July, an official with the Ministry of Trade said on Sunday.

“The stated amount of revenue will be secured from the export of more than 1.1 million tons of agricultural products,” Abdurrahman Se’id, Public Relation Deputy Head of the Ministry, told Anadolu Agency.

He said the products include coffee, oil seeds, cereals, khat, spices, natural gum and incense among others.

“The revenue is projected to surpass by 16.3 percent that of the $2.1 billion income earned during the previous budget year,” he added.

The target is taking into consideration the growth of agricultural products, market system efficiency, capacity of the exporters and suppliers of the products, he said.

The biggest export item will be coffee followed by oil seeds, Se’id said.

Around $862 million of the total revenue is expected from the export of coffee, which contributes the lion’s share in the country’s economy, he said.

“The country will also export 362,422 tons of oil seeds and secure over $724.8 million revenue in this fiscal year,” he added.

Coffee is believed to have been first discovered in Ethiopia’s south-west region of Kaffa/Caffa, with its name derived from the region.

Africa’s largest coffee producer, Ethiopia generated some $718 million from coffee exports during the 2013/14 financial year.

http://www.turkishweekly.net/news/173383/ethiopia-eyes-2-5bln-revenues-of-agricultural-exports.html

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Ethiopia: Agriculture to industry

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Chief Economic Advisor to Ethiopia’s Prime Minister, Neway Gebreab talks to CNN about creating economic opportunities.

Video link here  http://www.msn.com/en-us/news/world/ethiopia-agriculture-to-industry/vi-AA6LLfc

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Government Set to Buy Two Million Quintals Milling Wheat

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The 6.5 million quintals of wheat planed to be import during this fiscal year exceeds the last five consecutive year’s imported amount.

cost_per_quintal

The country’s expense to import wheat increased from 1.11 billion Br in 2009/10 to 3.2 billion Br in the 2012/13 fiscal year.

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The government is importing two million quintals of milling wheat, in addition to the four million quintals it has already bought by the beginning of the current fiscal year, leaving only 500,000ql for its plan for the year.

Public Procurement & Property Disposal Service (PPPDS), on behalf of the Ethiopian Grain Trade Enterprise (EGTE), announced the international tender to buy the wheat three weeks ago on the state-owned daily newspaper, The Ethiopian Herald. Financial opening is expected to take place on October 22, 2014.

The government has been importing varying amounts of wheat for years for market stabilisation purposes. In 2009/10, it had imported 5.3 million quintals, then nearly half, 2.58 million the following year. In 2011/12 and 2012/13, the imports were 4.2 million and 5.6 million quintals, which again was slightly down to five million quintals in 2013/14.

The price per quintal at which the government bought the wheat has also increased from 353 Br in 2009/10, to 507 Br, 534 Br and 549 Br through consecutive years until 2012/13.

At the global market, the price of the wheat is estimated to be 468 Br per quintal on October 9, 2014, according to USDA Market News.gov, a United States based website. Accordingly, the latest order could cost the government somewhere around 936 million Br. Nevertheless, the first batch of wheat the government bought this fiscal year has cost 600 Br a quintal excluding transport cost.

Following the problem of wheat shortage in the local market, the government bought four million quintals of milling wheat from Ukraine for 2.4 billion Br. The government made the order to six companies.

As of October 10, 2014, the EGTE has received 2.1 million quintals, which is stored at the central warehouse between July 29, 2014, and October 7, 2014. So far the EGTE has distributed 1.2 million quintals to 288 flour factories throughout the country, according to Etenesh Gebremichael, public relation & trade information head at the Enterprise.

The distribution takes place from warehouses at each regional capital every 15 days. These 288 factories supply flour to 5,000 bakeries identified by the Ministry of Trade and regional trade & industry bureaus.

In the first distribution for this fiscal year, between July 29 and August 19, warehouses at Addis Abeba and Mekelle were the biggest recipients, with 97,950ql and 89,598ql, respectively. Adama and Bishoftu had 47,787ql and 41,999ql, respectively, while Bahr Dar and Dessie each had 36,820ql.

The cost of the wheat to the government, including transport, is 776 Br, says Ali Siraj, state minister for trade. The government sells this to the mills at a subsidized price of 550 Br a quintal.

The mills make 73kg of flour of a quintal, according to Ali, which they sell to bakeries for 796 Br. A special consideration in Addis Abeba is that 4,520ql out of its biweekly quota of 113,000ql of mill will be distributed to people considered as lower income.

The government has been importing wheat with a total expense of 8.47 billion Br between 2009/10 and 2012/13. In the 2013/14 fiscal year, it had bought five million quintals during the last fiscal year for market stabilisation.

http://addisfortune.net/articles/government-set-to-buy-two-million-quintals-milling-wheat/

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Ethiopia cuts extreme poverty, hunger by half

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Ethiopia has achieved the MDG goal one, halving extreme poverty and hunger by 2015, the Ministry of Agriculture said.

Ethiopia is among the 63 developing countries have reached the MDG target.

Ethiopia is also among the 25 countries that achieved the more ambitious World Food Summit (WFS) target of halving the number of undernourished people by 2015.

The nation has managed to reduce undernourished people to 35 percent, which 20 years ago was 75 percent, the Ministry said.

The various activities being undertaken by the government to increase food security has contributed for the success.

According to the Ministry, Ethiopia along with the other countries will be honored at the 150^th FAO Conference to be held in December.

The agriculture sector, growing by 8 percent in average is contributing for the overall development of the country and this achievement, the Ministry said.

According to reports, Ethiopia has made commendable progress towards reaching most of the MDGs. Apart from the overall decline in poverty, positive gains have been made in terms of education, health and reducing the prevalence of HIV and AIDS. These advances are owed largely to the Government’s efforts, with substantial support from the UN.

The State of Food Insecurity in the World (SOFI 2014) report issued by FAO confirmed a positive trend which has seen the number of hungry people decline globally by more than 100 million over the last decade and by 209 million since 1990-92.

The overall trend in hunger reduction in developing countries means that the (MDG) of halving the proportion of undernourished people by 2015 is within reach, the report said.

To date, 63 developing countries have reached the MDG target, and six more are on track to reach it by 2015.

http://www.waltainfo.com/index.php/explore/15456-ethiopia-cuts-extreme-poverty-hunger-by-half

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Food, drinks, pharma sectors should generate more foreign currency

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The Ministry of Industry was hoping to bring in USD 110.1 million from 48 major drug, beverage and food companies, however it only actually earned USD 68 million, 61.8 percent of the target, although it was 33 percent more than the year before. Twenty major companies exported food products bringing in a combined USD 59.7 million which is 79.6 percent of the target goals.

On the beverage sector, twenty-one major companies exported their products generating a revenue of USD 5.1 million while the target was USD 25 million, which is 20.7 percent of their target. The pharmaceutical sector is also another disappointment. The sector generated USD 3.1 million, 31.2 percent of the expected target which was USD 10.1 million.

Mebrhatu Melesse, state minister of Industry says things should improve with better infrastructure land management and testing laboratories to attract foreign investors. He added that change does not occur over night and that with wise investment more money will begin coming in.

“Some things, like global market prices, are not controllable. Other things like improving the power supply and lessening bureaucracy are controllable,” he said.

The state minister added that his ministry is taking a holistic approach to improving the export situation. Elias Genet exports oil seeds, one issue he points to is farmer’s need to get a fair price for their labor. He says that because food prices have gone up it is hard to attract investors. Mulat Abegaze exports sesame and he said that when companies fail more assessment should be done to improve the business climate. Previously Ethiopian Airlines discounted transportation for horticulture to improve that sector and some wonder if this could also be done for the food and beverage industry.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4629:food-drinks-pharma-sectors-should-generate-more-foreign-currency-&catid=35:capital&Itemid=27

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Hibret Manufacturing Moves with Brakes On

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-  MetEC’s company plans to substitute import and to export different brakes for vehicles

The new brake factory will be the sixth factory which is incorporated under Hibret Manufacturing and Machine Building Industry which are engaged with manufacturing of machineries and spare parts.

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Hibret Manufacturing & Machine Building Industry (HMMBI) is going to manufacture brake at a new 350 million Br plant at Awash Arba town in Afar Regional State.

HMMBI, one of the 15 semi-autonomous and integrated manufacturing companies that are operating in nine different sectors under the Metal & Engineering Corporation (MetEC), is building the factory, which is 95pc complete, on a 40,000Sqm plot of land 240kms east of Addis Abeba, according to Mikael Desta, head of Corporate Communications at the MetEC.

The brake factory will commence production by the beginning of January 2015 by manufacturing three types of brakes, for both of local and global market, according to Mikael. HMMBI’s other factories produce industrial machineries and spare parts.

The brake factory will produce drum brakes, brake shoe, and disc brakes.

Production capacity of the factory is 1.3 million drum brakes, 792,000 brake shoes and 200,000 disc brakes, annually. The plan is import substitution, says Mikaeal. All the machines for the new factory have already been delivered from China, and installation is already underway at the factory.

Established in 1945 and incorporated into MetEC in 2010, Hibret is a family of six factories, including the new one. The new factory will have a total of 290 workers to manufacture the brake for all types of vehicles form automobile to the big trucks in three levels small, medium and large, according to Mikael.

It targets supplying the domestic and East African market in the near future, Mikael told Fortune.

http://addisfortune.net/articles/hibret-manufacturing-moves-with-brakes-on/

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 Tullow moves out staff, machinery

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-  Calls exploration results “a nightmare”

The British oil company which is prospecting for oil in the South Omo basin of Ethiopia, Tullow Oil, is moving its staff and machineries out of Ethiopia. 

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Ethiopia-to-Djibouti Rail to Be Complete in a Year, PM Says

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By William Davison Oct 17, 2014

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An electrified rail link from Ethiopia’s capital along its main trade route to neighboring Djibouti will be completed by October 2015, Prime Minister Hailemariam Desalegn said.

The Railways Corp. project, funded with a $1.6 billion advance from the Export-Import Bank of China and by Ethiopia’s government, is half complete, he said yesterday in the capital, Addis Ababa.

“Priority has been given to it,” Hailemariam said in response to questions from members of parliament. “Next October, the line will be finished.”

The 656-kilometer (408-mile) railway is part of a five-year growth plan for Ethiopia started in mid-2010 that seeks to spend 569.2 billion birr ($28 billion) of public and private funding on infrastructure and industry. The new route to Djibouti may halve travel times, according to the government.

Seven out of 10 cane factories being built by the state-owned Sugar Corp. will also be completed in a year’s time, with the rest finished in the subsequent six months, the premier said. “We will be able to export the sugar they produce this year,” he said, referring to the Ethiopian calendar year that ends Sept. 11.

Sugar Corp. signed $580 million of government-guaranteed loans last October with the China Development Bank to finance six processors in the South Omo region, while China’s Ex-Im Bank provided a credit line of $500 million in May for a sugar plant in the northern Tigray region, according to data on the Finance Ministry’s website.

Increase Output

In September 2011, the government said it planned to increase sugar production almost eightfold to 2.3 million metric tons by mid-2015, leaving a surplus for export of 1.25 million tons. Plans to build 10 sugar factories, a 2,395-kilometer rail network and boost power supply fourfold to 8,000 megawatts haven’t been fully achieved, said Girma Seifu, the only opposition legislator of 547 members of parliament.

“At this point in time we’re just importing sugar,” he said by phone from the capital yesterday. “The plan is just for propaganda purposes rather than implementation.”

Turkish contractor Yapi Merkezi Insaat VE Sanayi AS has commenced work on a northern railway line from Awash to Woldiya, while a Brazil-funded project to the southwest hasn’t begun, Hailemariam said. Russia plans to fund a link to Kenya, according to the Railways Corp. “Because there is an economic slowdown those countries have not been able to release the loans,” Hailemariam said.

Loan Maturities

An advance of $300 million from the Export Credit Bank of Turkey funds the Turkish project at the six-month London interbank offered rate plus 3.75 percent, according to the Finance Ministry. Credit Suisse Group AG (CSGN) is loaning $450 million at the same rate and $415 million at six-month Libor plus 4.59 percent for the line, the data shows.

All the agreements were signed July 7. The maturity of the recent loans for rail and sugar is about 12 years. That compares with a four-decade repayment period for World Bank advances, which come with interest rates of about 0.75 percent.

The first Credit Suisse funding was released in August for the “essential infrastructure” project that will be finished in three years, bank spokesman Adam Bradbery said in an e-mailed response to questions. Its financing for the 389-kilometer track is split into a $450 million, seven-year maturity commercial loan involving lenders from Europe, Africa, the Middle East and the U.S., he said today.

The bank’s other loan is backed by Sweden’s Exportkreditnamnden, Denmark’s Eksport Kredit Fonden and Swiss Export Risk Insurance, and will be paid back over 13 years, Bradbery said.

Ethiopia is on the “cusp” of going from a low to moderate risk of debt distress, the International Monetary Fund said this month. “Commercial loans to finance large public investment projects by state-owned enterprises could increase the risk to Ethiopia’s public debt sustainability,” it said.

To contact the reporter on this story: William Davison in Addis Ababa at wdavison3@bloomberg.net

To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net Michael Gunn, John Bowker

http://www.bloomberg.com/news/2014-10-17/ethiopia-to-djibouti-rail-to-be-complete-in-year-s-time-pm-says.html

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Ethiopia’s fast-growing capital aims to become greener and cleaner

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By E.G.Woldegebriel

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ADDIS ABABA (Thomson Reuters Foundation) – Ethiopia’s capital city, Addis Ababa, has a name that means “new flower” but for up to four million people living there, it’s more likely to conjure up images of worsening pollution and traffic gridlock.

The city administration started rolling out a 10-year master plan in 2012 aiming to make the rapidly developing city in Africa’s fastest-growing economy greener, cleaner and pleasant to live in. Many residents aren’t convinced it is working yet.

Alemu Dagne, 48, an engineer and father of two, says he misses the clean air of the once-sleepy city.

“Every day I have to set out for work at 6 am (on public transport) and commute back home starting early at 4pm, as the road is clogged with cars, which not only crowd the roads but also pollute the air,” he told the Thomson Reuters Foundation.

He hopes the city’s new light rail system, powered by electricity – with the first stage scheduled for launch in January – will provide a cleaner, faster mode of travel.

Asamenewe Tekleyohanes, legal affairs officer at the Addis Ababa City Government Environmental Protection Authority, said the capital suffers four types of pollution: air, water, soil and noise.

His organisation is working on a study with a local green group on air pollution, especially from cars, and looking at potential technologies to reduce it.

The authority says it has overseas tools to measure the greenhouse gas emissions of the city, the nation’s economic hub.

“Development has its own adverse effects so, in addition to awareness training, we are carrying out inspections on industries to check whether they have put in place cleaner technology to offset potential pollution,” Tekleyohanes said.

CRACKDOWN ON INDUSTRY

The Ministry of Environmental Protection and Forestry gave industries five years until January this year to control pollution or face consequences ranging from warnings to closure.

The agency is now taking administrative and legal measures against non-compliant industries but Tekleyohanes said the problem of vehicle fumes was harder to tackle.

The authority plans to check emissions levels in its next annual inspection of cars, regardless of model and age, at facilities with modern equipment and trained personnel.

One solution proposed could be to take old cars off the road by restricting imports of secondhand vehicles and replacing them with new environmentally friendly cars.

Ethiopia is aiming for net zero carbon emissions by 2025. Prime Minister Hailemariam Desalegn told a U.N. Climate Summit in New York last month that the government was targeting double-digit economic growth so it can become a medium-income country by 2025, while at the same time curbing emissions.

Part of that plan involves investing in clean and renewable power, he added. By the middle of next year or soon after, Ethiopia will have increased power generation from renewable sources to 10,000 megawatts (MW) from the current 2,268 MW.

Abrehet Gebrehiwot, another official with the city’s environmental protection authority, believes forests could help.

Her office is striving to protect local forest cover, especially in the city’s northern districts, while also replacing the foreign eucalyptus tree – known for soil leeching – with local tree varieties like olive, juniper and hygenia.

The city’s rising population and increasing demand for land – whether for private, industrial or residential needs – are becoming a threat to some of its most treasured forest areas.

The city master plan envisages forest cover of 22,000 hectares or 41 percent of its area but it remains at 14 percent.

“We want to use Addis’s forests as a carbon sink, (for emissions) coming from cars, factories and homes, in addition to using it as protection against dangerous rays and foul smells,” said Gebrehiwot.

Negash Teklu, executive director of the PHE Ethiopia consortium which groups NGOs, researchers and government agencies working on population, health and the environment, is confident Addis Ababa’s rising pollution can be addressed.

“We want to initiate a comprehensive strategy to make the city green – be it sewerage systems, industrial plants and parks – using the city’s own master plan,” he said.

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Nation working to boost coffee production by 20%-25%

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The Ethiopian Coffee Exporters Association (ECEA) announced various tasks aimed at boosting the country’s coffee production by 20%-25% are under way.