Foreign oil and gas companies have expressed their keen interest to tap into oil shale deposits in Ethiopia, it was learnt.

Reliable sources told The Reporter that two foreign companies recently approached the Ethiopian Ministry of Mines and are holding discussions to acquire oil shale exploration concessions in south western part of Ethiopia. The sources declined to reveal the names of the companies saying that the negotiations are at an early stage.

Oil shale also known as kerogen shale is an organic-rich fine grained sedimentary rock containing kerogen (a solid mixture of organic chemical compounds) from which liquid hydro carbons called shale oil can be produced.

Ethiopia has a huge reserve of oil shale in different localities. Delbi Moye, Illubabur zone in the Oromia Regional State is one of the localities known for rich oil shale deposit. According to the Ministry of Mines, the oil shale reserve in the south western part of the country is estimated at one billion tons.

Some years back oil shale production was not considered as a viable solution for the oil thirsty world as the price of fuel was low and the oil shale production technology was expensive. However, while the price of oil sky-rocketed and was hovering around 115 dollars a barrel, companies came up with a new oil shale production technology called “fracking” which is cost effective.

Fracking (hydraulic fracturing) is a well stimulation technique in which rock is fractured by a hydraulically pressurized liquid made of water, sand and chemicals to release oil from the rocks.

In the past four years American companies have been producing increasing amount of oil shale and this plumped the price of oil in the global oil market. Drilling shale oil wells is cheaper and takes less time. It takes at least two month and 50 million dollars to drill a regular oil well while it takes only a week and 1.5 million dollars to drill an oil shale well. In a recent mining conference held in Addis Ababa, Ketsela Tadesse (PhD), petroleum licensing and administration director with the Ministry of Mines, said that North American and European countries are producing gas and oil from oil shale by applying modern technology. “There is no reason why Ethiopia can’t produce petroleum products from the oil shale,” Ketsela said.

[TheReporterEthiopia]

[Image source: www.tigraionline.com]

Shaoxing Mina Textile Company said it will build a textile and garment factory in Sebeta, Oromia Regional State, with an outlay of over 15 million USD.

Company CEO, Wei Chang Jun said a dying and printing factory that has been under expansion on five hectares of land will also be completed within months as 95 percent of the equipment have already been imported from Italy and South Korea.

This was disclosed after President Mulatu Teshome held talks today with CEO Wei Chang Jun here in Addis Ababa.

The president said on the occasion Ethiopia has been giving prime attention to supporting investors that engage in the manufacturing sector.

The country has favorable investment atmosphere, cheap labor, market and geographical location, he added.

President Mulatu noted that the Sebeta railway and the expressway planned to connect the town with the capital city will further enhance investment.

The textile and garment factory plans to export its products to Europe, USA, Thailand, Turkey and other African countries, it was learned.

Upon going fully operational, the textile and garment factory would create 5,000 jobs.

[EthiopianNewsAgency]

[Image Source:tribune.com.pk]

Ethiopian greenfield brewer Habesha, majority-owned by Dutch brewer Bavaria NV [BVMVE.UL], said it plans to start selling beer in the second quarter of this year to tap rising domestic demand that has attracted global brands.

Bavaria NV is the latest beer maker lured by Ethiopia’s expanding middle class over the last five years and will compete with breweries owned by Heineken and Diageo.

The world’s leading brewers have turned their focus on emerging markets such as Africa as consumer demand in Europe has stagnated and the United States offers limited expansion opportunities.

“We expect to start selling beer in the second quarter of 2015. Say two or three months from now,” Thijs Kleijwegt, Habesha Breweries’ finance director, told the Reuters Africa Investment Summit.

Ethiopia’s average annual beer consumption of less than five liters per capita is about half the average for sub-Saharan Africa, excluding South Africa, offering scope for expansion among the population of 94 million, more than 60 percent of whom are Christian.

Bavaria NV bought a stake in Habesha Breweries in 2012, and has since increased its holding to 60 percent.

Habesha’s plant in Debre Birhan, around 120 kilometers (72 miles) north of Addis Ababa, will have a capacity to produce 350,000 hectoliters once it is completed, although production will start before then.

Heineken’s $130 million brewery near Addis Ababa is the largest in Ethiopia with a capacity of 1.5 million hectoliters.

The Dutch firm also owns the Bedele and Harar breweries it purchased from the state for a combined $163 million in 2011.

Diageo acquired Meta Abo Brewing in 2012 for $225 million, while Ethiopia’s BGI – considered the market leader in the country – was bought by French drinks company Castel in 1990.

“It is an interesting beer market,” Habesha Breweries’ Kleijwegt told Reuters. “I think the potential in Ethiopia is huge.”

[Reuters]

Ascent Capital has invested in an Ethiopian medical diagnostic laboratory company, Medpharm Holdings Africa, in its first private equity deal in Ethiopia.

The private equity firm effected a 2.5 million dollar equity investment in Medpharm Holdings Africa through its Ascent Rift Valley Fund arm. It did not, however, disclose the stake acquired.

Medpharm will use the funds to increase the number of tests and services offered to clients including cancer screening.

“Another area of expansion for Medpharm will be in wellness testing which will allow clients to identify areas of concern early through annual health reviews, hence reducing the burden on the government’s health budgets,” said Guy Brennan, a partner at Ascent Capital.

The investment will also fund country and regional expansion. For Ascent Capital and investors in the fund, the deal will offer access to Ethiopia’s healthcare sector that serves the second largest population in Africa.

Michael Mebaselassie, principal and country director Ascent Capital, told The Reporter that the fast economic growth, political stability and huge population make Ethiopia attractive for investment. “Ethiopia has been registering a dramatic economic growth in the past years and there are attractive and promising companies to work with,” Michael said.

According to Michael, Ascent is interested in financing manufacturing companies engaged in the production of fast moving consumer goods. “We are mainly interested in manufacturing companies whose products could be distributed to the majority of the population. We are trying to identify promising companies. We want to maintain strong relationship. It is a long term commitment. We are not here to fly in and out,” he said.

Ascent Capital is a new private equity firm based in Mauritius with offices in Ethiopia, Kenya and Uganda.

Ascent on Wednesday announced that it received an investment commitment of one million dollars from the Kenyan Media Conglomerate, Nation Media Group pension fund.

Ascent, announced in July 2014 the first close of the Ascent Rift Valley Fund (ARVF), which raised USD 50 million to be invested in growth enterprises in Ethiopia, Kenya and Uganda. At this close Kenya Power and Lighting (KPLC) pension fund committed to invest 4 million dollars making it the first pension fund in East Africa to do so. The Nation Media Group pension fund now followed in the footsteps of KPLC.

Ascent which raised USD 50 million to be invested in growth enterprises in Ethiopia, Kenya and Uganda recently opened an office in Addis Ababa. Officials of the company announced that the company will invest 20 million dollars in Ethiopia over the next three years. The amount could be raised ten times in three years time.

Ascent Capital was established two years ago and got commitment for the fund a year ago. The company has 25 shareholders including Norwegian Fund (Norfund), Austrian government fund (OeEB), , European families and East African institutions, such as pension funds and insurance companies.  With ten million dollars Norfund is the largest investor to be followed by OeEB with five million dollars investment.  Ascent is the second private equity fund to operate in Ethiopia, next to SGI.

[TheReporterEthiopia]

The enormous potential in the Extractive and Mineral industries and its contribution for foreign currency earning was highlighted as opportunities for making the sector competitive. This was underlined during a symposium organized by the Addis Ababa Chamber of Commerce and Sectoral Associations on the concluding event of the 19th Addis Chamber International Trade Fair held Tuesday.

Delivering a presentation entitled ‘Competitiveness in selected Ethiopian Industries: The case of Extractive and Mineral industries” on the symposium, Process Owner at the Ethiopian Revenue and Customs Authority Amelework Olana said that the sector sits next to coffee as the highest foreign exchange earner racking up more than 19 per cent of the total export, and can put in significant role in export diversification.

She said the fact that the country’s minerals are untouched or untapped means that they present enormous potential for so many investors. Besides these factors, the sector’s contribution to the GDP alongside the job opportunities created and its potential for job creation gives the sector the edge for its competitiveness, according to Amelework.

She also attributed the condusive environment and the government’s incentive offerings as pluses, while also pointing out challenges, like limited technical capacity and technological innovation in the sector, shortages of professionals, among others, to be held within the sector.

She recommended for the government and the ministry to give great attention to develop human resource capacity and establish mining institute together with other suggestions.

CEO of the National Mining Corporation Melaku Beza on the symposium for his part said that the attractive proclamation and directives play a huge role in attracting investment towards the sector.

He also said that the acceptance of Ethiopia’s candidacy into Extractive Industries Transparency Initiative will help bring transparency on how the country manages and supervises its mining sector.

This symposium is part of the City’s Chamber effort to create the platform for experience and knowledge sharing for local companies and industries.

[TheEthiopianHerald]

Ethiopia has various agro-ecological zones which could grow more than 100 species of spices

The Ministry of Industry said exploiting the untapped spices resources for export market is essential for earning foreign currency which supports other economic sectors.

At the opening ceremony of the workshop which reveals the strategic development study on spices industry prepared by the Ministry of Industry in collaboration with the Addis Ababa Science and Technology University, Industry State Minister Dr. Mebrahtu Melese said that though Ethiopia has various agroecological zones which could grow more than 100 species of spices, the utilization of the sub sector is negligible. As a result, the nation has not been able to benefit from the sector as it deserves.

According to Mebrahtu, traditional production system, lack of value chain and market integration, among others, are various constraints to tap the resources. As to him, the strategic study revealed at the workshop could be a vital input to tackle the inherent problems of the sector.

He further said that the government has already employed multidimensional approach to modernize the sub sector gradually and to that end capacity building to the actors in the sector, provision of technology and credit facilities have been provided. In addition, investors involved in the production, processing and marketing have been provided support to become competent in their endeavors and some of them have been able to take part in experience sharing journey abroad.

Spice Sub Sector Industry Strategy Plan Preparation Team Leader Dr. Atsede Asefa on her part said that the Ethiopian spice industry is hindered constraints faced in the process of production, processing, lack of post-harvest handling technologies and value chain. To combat these problems and make the country competitive at the international market all the stakeholders in the sub sector industry, growers, handlers, brokers, processors and exporters need to participate in promoting the proper practices at each stage of the value chain and thrive for satisfying local and international customer requirements in a coordinated approach to tap the market at optimal level.

According to a recent report, in the country 73.3 million hectares of land is suitable for agriculture out of which 3.7 million hectares of land already enclosed for local and foreign investors for the production of spices with better technology and the necessary inputs, she added.

 [TheEthiopianHerald]

[Image source: www.oryxwildlifesafaris.com]

The Ministry of Trade conducted a three-day discussion with stakeholders on quality and standard issues here on Monday.

On the occasion State Minister of Trade Ali Siraj said: “Total quality management transcends the product quality approach, involves everyone in the organization, and encompasses all its functions: Administration, communications, distribution, manufacturing, marketing, planning, and training. We have about 40 water producing factories and yet only two of them use the Ethiopian Standard Mark on their production.”

Quality should be the motto to penetrate any market and it must begin with purchasing the raw materials and selling the production to the wholesalers and retailers. It should be governed by the system and make every one play fairly relying on the same, he added.

“An informed society should be in a position to determine the market and not be influenced by human affiliation. Any institution which seconds quality would be profitable and make sustainable profit. The Ministry would start to publicize these institutions in relation to safety matters.”

Market Surveillance Officer with the Ministry Zeradam Asegahagne on her part said that to protect the safety of the society and the environment the Ministry has implemented its legal mandate giving quality certification to 17 water factories with 17 more on the way but 10 factories have not started yet the quality surveillance procedures.

The Ministry has the will to keep sensitizing the factories to work in line with the set quality standards but if factories failed to abide by the rules and regulations they would be forced to publicize it. The Ethiopian Herald was informed by the Ethiopian Conformity Assessment Enterprise (ECAE) only two factories of bottled water and spa have secured the Ethiopian Standard Mark. The Ministry has given three additional months for those water bottling factories to finalize the process of conforming to the set standards.

Factories Surveillance Officer within the Ministry, Yeshimebet Simon said: “A holistic approach to long-term success that views continuous improvement in all aspects of an organization as a process and not as a short-term goal is what the factories should be engaged in. Factories should aim to radically transform their organization through progressive changes in the attitudes, practices, structures, and systems.”

The stake holders raised complaints on the prolonged time it takes to secure certification and the high cost.

It was learnt that the Ethiopian Conformity Assessment Enterprise and the Ethiopian Standard Agency would work jointly to enforce factories to meet standards of production.

[WaltaInformationCenter]

Ethiopia has clear and attainable trade policy which helps to develop and ensure broad international market linkage and thereby generate large amount of foreign exchange. Likewise, the country has put in place an appropriate investment policy that enables to attract foreign investment which is at the center of the country’s economic diplomacy.

The economic diplomacy policy of the country is, therefore, helping the nation to diversify its trade, investment areas and widens the international market horizon that vividly accelerated growth in these sectors of the economy.

Today, a number of companies and investors from Asia, Europe, America, the Middle East and Africa are highly interested to invest in Ethiopia more than ever. Many countries are also growing their diplomatic relations to more intensified economic ties with Ethiopia.

Recently, a two-day Ethio-Canada Business Forum was held here in Addis pursuant to Canada-Africa Business Summit held in September 2014 in Toronto where Ethiopia was showcased as a country of focus. This year marks the 50th anniversary of the beginning of diplomatic relations between Ethiopia and Canada. Canada is the third largest bilateral country donor to Ethiopia while Ethiopia is the second largest aid-recipient of Canada.

The recent business forum aims at changing the 50 years cordial relations of the two nations to a more comprehensive win-win approach based on trade and investment, for their relations in these areas is lagging behind.

Available sources indicate that trade flows between Canada and Ethiopia are modest but with the potential for growth in the short – to medium – term and are subject to significant year-to-year changes due to the one-time order of high-value products like aircraft. In 2013, the two-way trade came to $39.2 million, with $21.3 million in Canadian exports to Ethiopia and $17.8 million of imports from Ethiopia into Canada. The year before, 2012, had seen a large boost in Canadian exports to Ethiopia, which stood at $123.6 million that year, due to the delivery of a number of Q400 aircraft from Bombardier to the Ethiopian Airlines. Bombardier has also set up a regional maintenance facility for the Q400 aircraft in Addis Ababa. Canada’s imports from Ethiopia consist mainly of agri-food products, such as coffee, team spices and oil seeds.

Some Canadian companies have been investing in mining and energy in Ethiopia, to date. According to a documented source from the Ministry of Mines, 13 Canadian companies have signed contracts for the exploration of potash and precious and base metals, with a registered capital of $6.5 million. In January 2010, Canada concluded an Air Services Agreement with Ethiopia. Ethiopian Airlines flights from Addis Ababa to Toronto began in July 2012. According to a Memorandum of Understanding signed between Canada and Ethiopia in 2003, Ethiopian exports of textile and apparel goods have tariff-free access to the Canadian market.

Minister of Mines Tolossa Shagi said that there is huge investment opportunity in Ethiopia for Foreign investors and the country is looking for genuine development partners. “In our growth and transformation program and our natural resources and infrastructural development, we need your capacity and experiences. With regard to mineral, our policy envisions the mineral to be back bone of industry and one of the most important export commodities to generate foreign currency,” said Tolosa.

Ethiopian Ambassador to Canada, Birtukan Ayano said, “the Canadian business mission would understand ample investment opportunities in the emerging economic landscape of Ethiopia.”

“Ethiopia counts Canada as a key partner of its development which has been witnessed in our poverty alleviation programs. As we celebrate our 50 years of friendship, it is high time to complement it with a robust participation of Canadian private sector in the country’s economy. This mission is, of course, part of the ongoing effort to promote Ethiopian trade and investment opportunities to Canadian companies and investors,” she said.

The effort to strengthen the trade and investment bonds is becoming auspicious trend as attested by the strong interest of Canadian companies to explore the business opportunities available in Ethiopia, according to Birtukan and she expressed her confidence that it would bear fruit in the no distant future.

President of the Ethiopian Chamber of Commerce and Sectoral Associations Solomon Afework emphasized the importance of such discussions and that it would help both to better prepare and cooperate in the future with a view of further reinvigorate the trade and investment ties of the two nations. “It is necessary for all of us to work together to put into practice the wealth of commitments that we have just conceived, for there are wide gaps that we need to fill in the trade and investment relations of the two countries,” he said.

According to Solomon, the total trade volume between Ethiopia and Canada was only 39.2 mln. USD in 2013 – with 21.3 mln. USD in Canadian exports to Ethiopia and 17.8 mln. USD of imports from Ethiopia into Canada – which is quite small compared to the existing potentials and trade ratio that Ethiopia has with other major trading partners.

Solomon stressed that the business communities of the two countries should work aggressively to enhance the trade and investment relations through exchanging business and trade information, organizing trade fairs. “We members of the Ethiopian business community in general would like to assure you that we will be standing in realizing our common interest and benefits,” said Solomon.

Head of Canadian Business Mission Senator Don Meredith said: “We are here today to further develop the growing commercial relationship between Canada and Ethiopia. The business delegates are looking at investment opportunities in ICT, agriculture, energy, housing, infrastructure as well as finance. There exist great opportunity in this country for us to be able to create jobs especially for a young people. We need to find ways to economically engage them and create job opportunities for them and eliminate the possibility of radicalization and hopelessness. And this is necessary investment in Ethiopia and will help the country grow forward.”

He reaffirmed that the Canadian companies have showed their strong interest in doing business in Ethiopia. The Ethiopian export to Canada must be improved by Canadian side. He also lauded the Ethiopian agriculture policy.

State Minister of Foreign Affairs, Dawano Kedir, said in interview with The Ethiopian Herald that this economic relation between Ethiopia and Canada can be taken as a reflection of the recently growing of Ethiopian consular to Embassy in Canada.

“Though our relation has been for a half century, it was limited to aid. We did not go deep into economic ties. However, because of our conducive policy, power and energy potential and cheap labor, many countries are coming to Ethiopia for investment. As a result, Canadians have also showed interest in the areas of agriculture, infrastructure, ICT and some other sectors. So, our part is to help them explore these opportunities,” he said.

In fact, liberalization of the economy, good markets access, availability of cheap labor, reliable natural resource base and commitment of the government to the private sector are the major factors for the growth in the flow of FDI in the country. However, much more is needed to exert utmost effort in the areas of employment. The more investment expands, the larger number of job opportunity is created for citizens. The country’s GDP as well as foreign exchange rate grows, too.

[AfricanGlobe]

Italian and Greek investors are in Addis Ababa, capital of Ethiopia, to assess business and investment opportunities and discuss with Ethiopian counterparts on possible partnerships.

Companies engaged in floriculture, coffee, leather, mining and energy are taking part in the Ethio- Italy/Greek joint business forum, which was kicked off here yesterday.

Speaking on the occasion, Ethiopian State Minister for Foreign Affairs, Dewano Kedir expressed hope that the forum would create opportunity for the companies to work in partnership.

Ethiopia has been on the investment radar for many investors, due to the development of the country, Dewano said.

The political stability and economic development, conducive investment atmosphere and favorable policy, combined with abundant natural resources and cheap labor makes the nation favorable investment destination, he said.

Regarding investment, Italy has already become one of the major FDI sources, Italian investment in different sectors including industry, agricultural and construction is growing, he said.

Some 200 investment projects with an aggregate capital 6.2 billion Birr owned by Italy companies are operating in Ethiopia between 1994 and 2014, adding, the government is keen to support investors. “We in Ethiopia are committed to work hard to encourage Italian involvement in investment areas.”

Although there are projects owned by Geeks with a combined capital of close to 350 million Birr, but it is not as desired, he said.

“We also have very positive relationship with Greek. So we have to develop this relationship particularly in the areas of economy, investment and trade. In this regard we need to work hard to further strengthen that situation,” he said.

“Ethiopia has everything that you need, … including conducive business environments, political stability and cleaner business climate,” he said.

Representative of Natalepelli, an Italian leather company, Rorberto Natale told ENA that Ethiopia is conducive for investment. “Ethiopia is very good for investment, to do business and its airlines play vital role in this regard.

“I found Ethiopia very good for investment and do business” he said.

[EthiopianNewsAgency]

Bahru Jemal, deputy manager of Feleke Trading Plc which is a manufacturer of Hamad foam relates the edible bread with the inedible foam when he tries to explain the manufacturing of foam. Just like a small amount of yeast rises the dough when bread is baked, so do a small amount of mixed chemicals, such as polyethylene, give rise to almost a one meter thick foam, says Bahru.

Hamad joined the market in 2007 on a 2,000sqm manufacturing land located at Nifas Silk-Lafto District. Unfortunately, a fire accident destroyed the factory in 2013 and it had to discontinue its production until 2014. In September 2014, the factory had joined the market again, establishing its manufacturing in Alemgena town, 26Km from Addis Abeba, with a 20,000sqm land with 20 million Br initial capital, stated Bahru.

The chemicals which are inputs for the production of foam, are mostly imported from China. The amount of chemicals and their combination will determine the density of the foam, which in return determines the quality of the foam. Foam, with a high density also known as HD foam products represents a high quality, having longer durability and comfort while medium density results an average quality and the lower density (LD/star) is known for being a lesser quality product.

Different factories use different standards of density level in accordance with the market demand however, there is no description or any other way a customer can differentiate between them. Most of the customers who come to purchase foam have a habit of pressing down the foams with their hands in order to find out the foam’s quality, stated Hana Nega, salesperson of Ethio-Foam. Samuel Tadese is one of the customers Fortune met with at Ethiopian Household & Office Furniture Enterprise (ETHOF) Stadium Branch while he was trying to find out the quality of the foam subconsciously extending his hands to press down on the product.

“I honestly do not know what I was trying to find out by pressing down up on the foams” he stated with a grin.

If the foam gets back up quickly to its place after you press down on it, that means it has high quality. However, low quality products stay down or take a longer time to get back to their original shape, explained Bahru. The production of foam has a set standard by the Ethiopian Standard Agency, stated Shimelis Arega, public relations at the Ministry of Trade. However, the standards are not forced by law as they are not a mandatory standard, which has an immediate effect to health or environment, he added.

The production of foam will not end once it is baked. Next, the baked foam will be left for eight hours to cool down and maintain its shape. After that it will be slashed down to different thickness ranging from 12cm to 24cm. And the standard width will be 75cm, 90cm, one meter, 1.5 meter having 1.9 meter height. Factories also accept a customized order from an individual customer, stated Mulat Foge, general manager of Amaga Plc.

The final process of manufacturing foam involves wrapping and sewing the produced foam with locally produced sheet printed with the company’s brand. The sewing machine will require two people, one to hold down the foam in place while the other sews and operates the machine.

After it is wrapped, the foam will be ready for the market. Mostly, universities and hospitals buy the bulk of the products directly from the factory whereas wholesalers and retailers will take care of the individual market demand by providing various brands of foam from different factories. The market consists of older brands such as Kangaroo, Addis Abeba, Rainbow foam and newcomers like Tiger, New Flower and Metiket foam. Currently, there are 69 factories that are engaged in the foam manufacturing business, according to Ethiopian Investment Agency, including three from China and one from Yemen. However, in 1992 there was a sing company, Kangaroo Plastic PLC until it was joined by Rainbow Plastic and Foam Industries PLC a year later.

The price for foam in the market roughly ranges from 500 Br to 1200 Br depending on its thickness and size. However, the LD foams which make it to the market without a wrap can be sold for 200 Br to 300 Br. Factories produce LD foams with a low production cost in order to make the products available at lesser price possible, stated Mulat. Wholesalers spend a total of 70 Br to 100 Br for wrapping LD foams with sheet.

[AddisFortune]

[Image Source: www.foaminspain.com]

The Kaduna Chamber of Commerce, Industry, Mines and Agriculture (KADCCIMA) has indicated willingness to establish and boost business relationship between Kaduna state and Ethiopian business community.

Speaking in Kaduna at the weekend during a courtesy visit by the Ethiopian Ambassador in Nigeria, Alemu Ayele Gesuma, the President of KADCCIMA, Dr Abdul-Alimi Bello, lamented the lack of trade/business relationship between the business community in Ethiopia and Kaduna State.

“Here in Kaduna,” he said “there is little or no trade/business relationship between the business community in Ethiopia and Kaduna State. What we can only testify is that our members patronize Ethiopian Airways for their internal traveling. It is our sincere hope and belief that with the coming of His Excellency, the Ethiopian Ambassador to Nigeria, another page for business relationship between our members and the Ethiopian business community will be opened.”

[DailyTrust]

It’s called the Grand Renaissance Dam — and the clue is in the name.

With some 8,500 laborers working around the clock on its construction, the imposingly-named dam is surely one of Africa’s most ambitious infrastructure projects, reaffirming Ethiopia’s ambitions of becoming a big regional player and a major exporter of power.

When completed, the project will generate around 6,000 megawatts of electricity for both domestic use and exports.

The most striking aspect of the nearly $5 billion enterprise is, however, that it is entirely funded by Ethiopia, without any foreign investment. According to the authorities, 20% of the project is financed from bond offerings to Ethiopians, and the remaining 80% from tax collection.

“It was seen as a strategically important initiative that the government and the Ethiopian people are financing it 100%,” says Zemedeneh Negatu, managing partner at Ernst & Young Ethiopia.

“They have come up with a very creative and innovative way that I think will be a lesson for other African countries who want to embark on such large infrastructure projects, and want to have the flexibility to do it themselves,” he adds.

Hydroelectric powerhouse

So far, Ethiopians at home and abroad have contributed about $350 million, and the government says that the 170 meter tall dam is on track for a 2017 opening, with 40% of the work already complete.

Ethiopia’s per capita income might be one of the lowest in the world, but the country has enjoyed an impressive economic growth since 2000, averaging 10.9% annually, which has resulted in a 33% reduction of people living in poverty.

If the Grand Renaissance Dam and other hydroelectric projects, such as the Gibe III dam on the Omo river, are completed on time, The World Bank estimates Ethiopia could earn $1 billion a year from electricity exports. Negatu says that this would make the country the largest exporter of power in Africa, and second only to South Africa when it comes to installed capacity.

Unhappy neighbors

Yet, not everyone is happy about Ethiopia’s energetic drive to harness its water resources. The Grand Renaissance Dam is being built on Blue Nile, a tributary of the Nile River which has been powering the agriculture of Sudan and Egypt — through which it flows — for millennia. These countries have opposed the project in the past, fearing that the dam will reduce their share of the Nile water. The ousted Egyptian president Mohamed Morsi had even threatened to defend “each drop of Nile water with our blood if necessary” back in 2013.

Passions have been calmer more recently, and today the Reuters news agency reported that representatives of Egypt, Sudan and Ethiopia reached a preliminary agreement in Khartoum on how to operate the dam. Negatu is convinced that a compromise will be reached, as he thinks that the dam will ultimately benefit not just Ethiopia but most other East African nations.

“This is actually a regional project because up from Egypt all the way down to Rwanda, countries are going to buy the power that’s generated by this dam,” Negatu says, adding that both Rwanda and Kenya have already agreed to purchase thousands of megawatts once the project is finished.

A lack of reliable power has long stunted Africa’s development, with 600 million people on the continent not connected to the grid and getting by on a mix of generators, kerosene lamps and candles. In Ethiopia, only 15 to 20% of the population has access to power according to a study by Chatham House.

“It’s Africa’s Achilles’ heel,” says Negatu. “With anyone who wants to build a factory in Africa, the first thing they ask is infrastructure, and within infrastructure, whether there is sufficient electricity. Industrialization has always been about electricity, and this [dam] addresses this basic need.”

He adds that, after depending on exporting raw commodities for decades, governments across Africa should be pursuing a strategy of industrialization, following the example of China.

“We’ve got to move up the value chain, and it’s what Ethiopia is doing right now. Its strategy is industrial-based — not to export commodities but to manufacture value-added things, and other African nations are trying to emulate that. But without electricity there won’t be industrialization in Africa.”

[CNN]

The European Union (EU) -Africa Chamber of Commerce is set to host the EU-Africa business to business (B2B) Forum from May 6-8, 2015 in Mons (Belgium).

This high level Business-to-Business (B2B) event aims to bring together business professionals to discuss mutual opportunities, expectations and needs. Over five hundred (500) participants are expected for each day. The EU-Africa B2B Forum will enable business contacts between professionals from African and European private sectors, but also between European businesses themselves.

The chamber hosts the forum in partnership with Euronews as main media partner. The EU-Africa B2B Forum has also partnered to this year European Business Summit: Forty-five (45) African Business Leaders will have a privileged access to the European Business Summit on May 6, 2015, according to the press statement the organizers sent to newbusinessethiopia.com.

B2B meetings will take a predominant part of this event but the EU-Africa B2B Forum will also offer sessions for investment pitches and on key topics such as Energy, ICT, Mining & Raw Materials, Agro-business, Rail & Road, Business Law and Tourism, the organizers said.

Private sector organizations from more than fifteen African and ACP countries have been invited, including: South Africa, Rwanda, Kenya, Cote d’Ivoire, Burkina Faso, Togo, Kenya, Senegal, Ethiopia, Benin, Cape Verde, Senegal, Madagascar, Morocco, Uganda, Angola, South Africa, etc.

High-level organizations, such as the European Commission, the African Union, the European investment bank, as well as the African Development bank have also been invited to discuss opportunities and challenges for “Doing Business with Africa”.

The second day of the forum (08 May) will focus on the Tourism industry. The idea is to put in the spotlight a sector that brings benefit to different parts of the African private sector where the informal sector is still important.  On this point, Serguei Ouattara, President of the EU-Africa Chamber of Commerce said: “We believe that the development of a sustainable tourism industry in Africa can be a powerful engine for economic growth and job creation, and can stimulate the development of other sectors.”

The EU-Africa B2B Forum will take place in Mons, the Belgian city that is this year European Capital for Culture.

The EU-Africa Chamber of Commerce (EUACC) is headquartered in Brussels since 2012. The EUACC’s mission is to promote the development of the African private sector and to encourage win-win and sustainable business partnerships between the European and African private sectors.

[NewBusinessEthiopia]

The Banque pour le Commerce et l’Industrie – Mer Rouge (BCIMR) a subsidiary of the French bank BRED, official celebrated the opening of its representative office in Ethiopia, on Thursday February 26.

Olivier Klein CEO of BRED, during the ceremony promised that the bank will do everything possible to assist the fast development witnessed in the Horn of Africa region, especially in Djibouti and Ethiopia.

“We opened a representative office here aiming to facilitate trade and business between Djibouti and Ethiopia. As the two countries are very much linked, we believe having a representative office here will be a good thing for the two countries. If we can also contribute to the development of trade and all the business between Ethiopia and Djibouti, we think that we can also help in developing some business between France and Ethiopia and Ethiopia and Europe,” the CEO said in an exclusive interview with Capital.

“We are here, first, to facilitate the trade with Djibouti; to facilitate the economic integration that is developing between Djibouti and Ethiopia. That is first thing. Secondly, we will work to boost bilateral relations between France and Ethiopia,” the CEO said.

BCIMR opened the first branch in Djibouti 1954 and is today the most respected bank in the Horn of Africa and has contributed greatly to the development of the Horn of Africa, explained Klein.

Olivier Klein was accompanied by Jean-Pierre Gianotti CEO of BCIMR (Djibouti) and Ali Abayazid Moussa Deputy Director General of BCIMR.

Ali Abayazid said that the Bank’s representation office opening is a solid indication of its confidence in the region. He also affirms that the bank will do whatever possible to help the bilateral relations between Djibouti and Ethiopia.

The Deputy Director General further said that the bank will help small and medium enterprises to boost their production capacity and their export performance. “We will focus on all areas of businesses, we will also help SMEs to get better access for their product,” Ali added.

Amin Abdulkadir, Minister of Culture and Tourism, State Minister of Finance and Economic Development Ahmed Shide, French Ambassador to Ethiopia Brigitte Collet, and Djibouti Ambassador to Ethiopia Mohammed Idriss Farah attended the ceremony.

Djiboutian government and BRED owns BCIMR. From its base in Djibouti, the BCIMR has played a significant part in over fifty years of economic development of the region.

BCIMR offers a diverse and complete range of services from retail banking, financing and investment banking and trade services, for all operations involving documentary credit, international guarantees and stand-by letters of credit.

Founded in 1919, BRED Bank is one of the largest regional banks in France. The bank has 330 branches in France and has a strong overseas presence through its subsidiary BCI with 74 branches located in Guadeloupe, Martinique, Saint-Barthélemy, Reunion, New Caledonia and South East Asia.

[CapitalEthiopia]

Addis Ababa is to get another world class hospitality image before the end of the year when the AU Grand Hotel managed by Westin Hotels and Resorts inaugurates its seven star hotel in the African Union (AU) compound.

The multibillion birr investment owned by the billionaire Sheik Mohamed Hussein al Amoudi will be inaugurated before the coming European Christmas, according to an insider source. MIDROC Ethiopia Project Office Contracting and Management Services Plc. (MEPO), which is a collaborative partner of the MIDROC Group that develops, constructs and manages property, undertakes the construction of the hotel which is in its final stages. A two year prior cost estimation of the seven star hotel was USD 350 million. “The project cost can jump by more than 20 percent by completion of the work than the previous estimate,” the source added. The hotel that will be the fourth international brand on the country after Hilton, Sheraton and Radisson Blu will also have several extraordinary facilities that shall serve heads of states and top officials.

“The project will be one of the top investments for the billionaire in Ethiopia,” sources at MIDROC told Capital.

On his initial investment in Ethiopia, Sheik Mohamed had established the five star luxury collection hotel Sheraton Addis at a cost of over USD 200 million. It is now approaching a two decades service mark.  Until now, no other similar facility is erected in the capital or elsewhere in the country.

MIDROC has been negotiating with one of the prominent hotel chains owner in the world, Westin Hotels and Resorts, to lease out the management of the new hotel. Westin is part of the Starwood’s Hotels and Resorts chain. It was acquired by Starwood in 1994.

Especially in the last decade, Westin has focused on expanding globally and since 2005 its number of hotels has grown from 120 in 24 countries to over 192 in 37 countries by 2013. Sources told Capital that Sheik Mohamed had got the contractor replace the cladding recently to stay in tip-top shape with the Westin brand. Installation of the polarized glass has also commenced.

Sources also said that the billionaire has ordered MEPO, which congregates professionals from different countries, to finalize the project before the end of 2015.

For the interior work, the contractor has ordered several European companies including from Spain and Italy to supply superior quality equipments. “The improvements made on the design and replacing the cladding has forced the contractor for more work,” the source said.

“Despite the adjustment that needs to be embodied, the project will be accomplished in the original timeframe,” sources at MEPO told Capital. When it opens, the hotel will be the first seven star luxury facility in the country.

The African Union Grand Hotel (AUGH) is a complex, multipurpose hotel that is designed to cater presidents, diplomats and business travelers. It has suites, standard rooms, meeting rooms, restaurants and bars, swimming pool and spa, grand club, a multipurpose ballroom, business center and parking lot.

The hotel has 610 rooms including 27 presidential and 31 ministerial suites. AUGH will also have 3,500 seating capacity conference hall, which will be the biggest conference facility under A hotel business, and another one with a capacity of 2,200 seats for banquets. The hotel will also have eight medium-sized meeting rooms.

The hotel is mainly intended to accommodate high government officials who come to the capital city for meeting as well as various other reasons.

Initially, the Addis Ababa City Administration had allocated 90,000 square meters of land to MIDROC, but based on the company’s request an additional 12,000 square meter was given by the city administration for a security area and parking lots.

Sheraton Addis, the other luxury hotel owned by Sheik Mohamed, is also managed by Sheraton Hotel and Resort, which was formed in 1937 and is one of the luxury brands under Starwood. Sheraton Addis has 294 rooms and 33 suites. This hotel has 11 conference rooms, and the biggest Lalibela Hall can accommodate 1,500 people at once.

Sheraton Addis shared the business with Hilton hosting major events and it became a  preferred  retreat for top government officials who visit the country.

MEPO has six ongoing projects including AUGH. MEPO will soon start 11 new projects which also includes an expansion project of Sheraton Addis.

Sheik Mohamed has over 70 companies in Ethiopia in different sectors.

Currently, interest of international hotel brands who aspire to join the hospitality industry is increasing.

Unhappy of the meager turnover by the current meat and dairy export, the Ethiopian Meat and Dairy Technology Institute (EMDTI) is poised to export its products to Chinese market to boost up the income expected from the sector. Targeting to get USD 250 million from meat and dairy export in the last fiscal year of 2013/14, the sector however brought in USD 76 million.

The sector is crippled by a failure to expand the market, low quality chain management, lack of emphasis on veterinary care for animals, to name a few. To fulfill the huge deficit in the income, Ethiopia has now started looking at other markets in Asia.

Dr. Tekeba Eshete, Vice Head of EMDTI told Capital that the institute is negotiating with Chinese higher officials and companies to enter into the Far East market.

“We are discussing with the Chinese government to export meat and they have welcomed our idea. Now, what is left for the experts is to examine the quality of the meat.”

The quality assessment covers a range of quality assurance benchmarks including the health facility in abattoirs, traceability and live animals registration.

The Ministry of Agriculture has started a pilot project that incorporates traceability and livestock registration in some rural areas and this project is expected to be applied fully throughout the nation in less than two years time.

“It is a great opportunity to enter the largely populated Chinese market and I hope the Chinese technical committee will conduct the evaluations soon so we can commence the export of meat to the Chinese market’’ he added.

He also said that EMDTI is looking forward to entering other Asian markets giving much emphasis to exporting good quality products.

Saudi Arabia and United Arab Emirates import large amounts of Ethiopian meat while Sudan, Egypt, Somalia and Yemen also import smaller amounts.

Workneh Ayalew, Livestock Value Chain Director with Agricultural Transformation Agency, hailed the EMDTI initiative to expand the export of meat.

“It is good to search other markets and good progress has been made so far, but protecting livestock  for good quality export is an issue that all stakeholders should care about.’’ Recently, a national roadmap was prepared to handle the traceability and registration of livestock on a regular and mandatory basis. Yet, the plan is only in a draft form and it waits for ratification by parliament.

[CapitalEthiopia]

[Image Source: www.foodproductiondaily.com]

Ethiopia targets countries in the Middle East for its agricultural products and live animals export, the Ministry of Trade disclosed.

Saudi Arabia and United Arab Emirates (UAE) are the countries the government eyes for its export destinations, Yeshak Tekaligne, Director of Bilateral and Regional Trade Relation and Negotiation told ENA.

These countries are the largest destinations for Ethiopia’s agricultural products, with Saudi Arabia and UAE receive 35 and 17 percent of the country’s exports destined in the region respectively.

Live animals, coffee and sesame are among the major export items of Ethiopia to the region. Ethiopia has exported agricultural products worth at 11.45 billion USD to Saudi Arabia and UAE alone during the past four years.

Most of the countries in the region are highly dependent on imported agricultural products for food, mainly because of effect on the limited water resource and the cost of desalination.

Countries like Saudi Arabia are planning to stop growing wheat locally, and entirely rely on imports beginning from 2016, because of the pressure on water resources and a shift towards overseas food investment. Saudi Arabia imported 3 million tons food in 2014, which makes it the sixth largest wheat importer that same year.

The shift will benefit Africa in general and Ethiopia in particular, because of its potential and geographical proximity.

According to Yeshak, the government understands the high demand for food items in the region and working to increase export volume and items.

Besides its geographical proximity to the Middle East, Ethiopia’s high soil fertility and abundant water resources position the country among potential suppliers of food items and investment destination for Middle East companies.

The director noted that both the volume and amount of Ethiopia’s agricultural export to Middle East countries have shown steady progress in the past 5 years.

“Our export volume to the region has been growing from time to time. The export trade has shown a 14.7 percent annual growth in average during the past 5 years. … When we see the amount we exported to the Middle East in 2009, it was worth around 312 million USD. This number grew to 538 million USD in 2013.’’

The total revenue Ethiopia earned from agricultural products exported to Middle East countries in the past four years is 2.191 billon USD. Share of the Middle East countries in terms of Ethiopia’s export trade is 19.16 percent.

It was indicted while Asia has the lion’s share in Ethiopia’s import-export trade; Middle East countries also play a significant role in the country’s trade.

Yeshak said the government works to maximize its benefit from the export trade and bilateral trade agreements were inked with Middle East countries to facilitate trade ties.

In terms of agricultural items, coffee accounts for 9 percent, meat and sesame consist 5.51 and 5.19 percent respectively of the country’s total export to the region in the GTP period.

Ethiopia has captured the attention of Saudi investors owing to its high soil fertility, the amenability of its climate towards the cultivation of a diverse range of crops, and the comparative abundance of its water supply.

Middle East companies including Saudi Star Agricultural Development plc, owned by Saudi Tycoon Mohammed Hussein Al Amoudi, are investing in Ethiopia in the agriculture sector.

Five projects owned by companies from Saudi Arabia, UAE and Kuwait have licensed during the past four years.

[EthiopianNewsAgency]

[Image Source: www.kalanta.com.tr]

The first ever electric car assembly plant in Africa is going to be built in Ethiopia.

President Mulatu Teshome held a discussion with America’s Ambassador to Ethiopia, Patricia M. Haslach, and Global Electric Transportation Ltd. Chief Executive Officer, Ken Monter, at the national palace.

Global Electric Transportation CEO Ken Monter said the company would start building the assembly plant in Ethiopia in September, 2015. The assembly plant will have 4 million USD starting capital and the exact location where the plant would be built is under study, the CEO said. The plant could produce 10,000 electric cars within three months.

United State Ambassador to Ethiopia, Patricia M. Haslach, said on her part America is expanding its strong relationship with Ethiopia in peace and security to the economic sphere.

The plant that is going to be built is part of this initiative, she added. The cars would contribute to reducing car accidents in the country, Haslach stated.

President Mulatu said Ethiopia is working to expand green economic development. The plant that would be built should therefore be encouraged as it is going to produce carbon free cars.

He further urged the company owners to implement the project quickly.

[EthiopianNewsAgency]

An essential element in the diet of not only humans but also animals and one of the most effective and most widely used of all food preservatives, industrial, medical and other purposes, salt.

In the past salt has served as money at various times and places. The Ethiopian rock salt, commonly known as Amolee apart from being used as food substance, was a medium of exchange, and paid in the form of tax and salary among others. In the old days, it played deceive role in Ethiopian domestic transactions. Salt still plays matchless role in making foods delicious and in factory inputs.

The Afar State is the major supplier of the salt in demand in Ethiopia. Osman Mekbul, Afar State Finance and Economy Development Bureau Head, said that implementation of programs aimed at bringing development and ensure good governance in the state was started 23 years ago. Since then, the government has facilitated conducive conditions for investment. In this budget year alone the state has prepared about 500 hectares of land for investment in zone three, he added.

At present, some 423 investors are engaged in extraction of salt from Afdera Lake and are supplying it to domestic market. About 300 thousand quintals of iodized salt is produced monthly from Afdera alone. In other sectors, along the Awash River Basin, especially in zone one and zone three Ethiopian and Ethiopian origin investors are producing cotton, sesame and other cash crops.

Afar has registered commendable achievements in the area of education, health, pastoralist development and agriculture sectors as well according to the Bureau Head. The people in the state in cooperation with the state government have recorded multifaceted economic development, Osman said.

Osman further said as Afar is the only salt producer in Ethiopia, salt extraction has been given due emphasis to keeping the public from health and related negative impacts. Hence, iodized salt is prepared by making it suitable for public health.

Apart from meeting domestic salt demand, investors who are engaged in salt extraction are planning to export salt. Salt will significantly contribute to the development of the Afar State, according to Osman. It is also an important mineral product useful for tannery and chemical industry and cotton factories, he added.

The Bureau plans to earn about 60 million birr from salt related tax by the end of this budget year. However, the income will be exceeded if salt is exported.

What is more, in order to enable the pastoral community to get access to potable water supply, health and education facilities among others, the government has carried out settlement programs and introduced modern animal husbandry systems.

In 32 woredas of the state, the government has constructed various schools, colleges, and alternative schools for the pastoral community. One university, four colleges, over six hospitals exist in the state, he said.

Currently, the State has been engaged in implementing various socio-economic development projects, like road construction and health institutions.

Afar has untapped natural resources and conducive conditions for investment. Infrastructures like air and road transport facilities are available in the state. “I urge investors to come and invest in Afar,” he said.

The government has endorsed various proclamations and directives that help improving its tax collecting systems. These directives and tax collection procures in turn help to enhance the state’s Growth and Transformation Plan, according to Osman. The agricultural income tax and animal husbandry income tax are among the directives that have already been implemented. The Bureau has also organized various awareness raising programs for eight thousand tax payers. By implementing various tax procedures and systems like preparing manuals, the Bureau has increased the state’s revenue to 450 million birr, he said.

[FBC]

[Image Source: www.volcanodiscovery.com]

The Dow Water and Process Solution said it is opening an office in Addis Ababa to showcase its world famous water treatment innovations. Representatives of the company told reporters on Wednesday at the Radisson Blu Hotel that they have held a successful Exclusive Customer Seminar whereby they met potential customers to their Ultrafiltration (UF) and Reverse Osmosis (RO) technologies.

“Ethiopia is a highly strategic market and this seminar is a milestone in extending the Dow Water and Process Solution’s footprint across East Africa,” commented Zakia Bahjour, Regional Commercial Manager for the company.

Though Dow Executives declined to tell Dire Tube as to how much money they put into the project, they said their technology products can be used in business ranging from mining to food and beverages. More than 50 people from the manufacturing, leather, textile, flower and representatives from the Ministry of Water, residential and commercial developers have attended the Dow meeting.

Sand filters are currently the most conventional water treatment technology in use in Eastern Africa. During the press conference, the Dow team  highlighted the main benefits of Ultrafiltration and Reverse Osmosis technologies. They said Dow’s technologies include more consistent filtration quality, lower footprint and easier maintenance and expandability.

[DireTube]