05 April 2014 Ethiopian News Round-Up


Chinese vice foreign minister visits Ethiopia


President Dr. Mulatu Teshome received the visiting Chinese Vice Foreign Minister Zhang Ming at the national palace on Thursday.

The vice minister was also received by Deputy Prime Minister Demeke Mekonnen and Dewano Kedir, Minister of State in the Ministry Foreign Affairs(MoFA)  

Genet Teshome Asia and Oceania Affairs director general in the Ministry of Foreign Affairs told the reporter the discussion between the Chinese vice foreign minister and his Ethiopian counterpart was “fruitful” and “constructive”.

He added that the bilateral relationship between these two countries on economic partnership, development partnership, education and culture is growing from time to time.

The visit made by the Chinese vice minister of foreign affairs is aimed at strengthening and promoting this relationship to the highest stage both in the economic and political ties and bilateral relations, he said  

According to Genet, among the topics discussed were the issues of China’s partnership in the development endeavors of Ethiopia and the invitation of more Chinese investors to Ethiopia.

The director general told The Reporter that the eighth ethio Chinese economic development cooperation ministerial joint session will open here next week.  

At the session a joint strategic plan which aimed at promoting the development partnership into the highest stage will also be prepared and finalized.

Moreover he stated that the discussion between the officials was aimed at strengthening development partnership and cultural ties.

Relations between the People’s Republic of China and Ethiopia were established in 1970. Ethiopia has an embassy in Beijing and the People’s Republic of China has one in Addis Ababa.

Though the economic relation between these two countries is growing fast the trade relationship favors China more than Ethiopia, which mainly exports agricultural products and imports processed goods.  



Ethiopia, China agree to cooperation framework deal


Ethiopia, China agree to cooperation framework deal

The framework deal is expected to focus largely on the aviation, space sciences, tourism and mining fields.

World Bulletin / News Desk

Ethiopia and China have agreed to ink a comprehensive cooperation framework deal with a view to strengthening bilateral ties and maximizing mutual benefits, state-run news agency ENA reported.

The understanding was reached at a meeting between Ethiopian Deputy Prime Minister Demeke Mekonnen and a visiting Chinese delegation led by Chinese Vice Foreign Minister Zhang Ming, the news agency reported.

Speaking to journalists after the meeting, Ming said that trade and investment relations between the two countries were flourishing, adding value to the two nations’ already strong people-to-people ties.

The framework deal is expected to focus largely on the aviation, space sciences, tourism and mining fields.

Mekonnen, for his part, expressed Ethiopia’s desire to move to a new level of cooperation with China, especially in the aviation and space sciences sectors, among others.

Ethiopia-China diplomatic relations were first established in 1970.

In 2000, the China-Africa Cooperation Forum was launched, becoming an important platform for dialogue and cooperation between the two countries.

China is currently involved in Ethiopia’s road-building, manufacturing and telecommunications sectors, among others.



Chinese firm wins Ethiopian rail contract


CNR Corporation, a Chinese train manufacturer, has signed an agreement with the Ethiopian government to provide 41 custom-made locomotives for use on the Addis Ababa light railway, which is now under construction.

Chinese firm wins Ethiopian rail contract

The company said: “They will be able to travel at a maximum of 70kph and will be sunlight-resistant, with special components for their glass, rubber, paint and cables.” The first batch of locomotives should be delivered by the end of this year, according to the Ethiopian Ministry of Transport.

CNR is one of the largest train makers in China. In addition to locomotives and high-speed trains, it makes linear-motor subway vehicles and light-rail vehicles, as well as railway cranes and industrial machinery.



NBE issues reinsurance establishment directive


The National Bank of Ethiopia (NBE) issued directive that allows licensing, supervision and establishment of reinsurance companies which provide services for direct insurers.

The Reinsurance Company Establishment Directive No.746/2014 would be put into effect beginning May 8, 2014.

Bank Insurance and Supervision Directorate Director Temessgen Zeleke told a press conference yesterday that the demand for insurance services has been increasing due to the rapid economic growth of the country which necessitated the issuance of the directive. Accordingly, the Bank has prepared reinsurance directive that would play an important role in laying foundation for the establishment of national reinsurance companies, he added.

Reinsurance companies render insurance services to direct insurance companies. These companies are instrumental in promoting the financial capacity of direct insurance companies, he added.

As the country has been undertaking a number of mega projects, the reinsurance companies are expected to provide financial security and better risk management systems, Temesgen added.

According to the Director, the establishment of national reinsurance companies promotes the existence of national reinsurance companies make treaty negotiation, settlement of claims and payment of ceded premium in domestic currency with the shortest time possible. Reinsurance companies enhance underwriting capacity and solvency of direct insurers by providing technical support and cover against accumulated and catastrophic losses, he added.

He further indicated that interested reinsurance companies should have the minimum paid up capital of 500 million birr which ought to be fully paid up in cash and deposited in blocked bank account in the name of the insurer under formation.

Temesgen also said that shareholders, except the Federal Government or public enterprises fully owned by the government, cannot exceed 5 per cent of the total subscribed capital separately or jointly. The reinsurance company should be wholly owned by Ethiopian nationals or organizations owned by Ethiopians.

Company organizers, managers, influential shareholders, CEOs are required to meet the competencies and skills stated in the directives.

Indicating the overall contributions of the reinsurance company in ensuring and sustaining the country’s economic growth, the Director said that the Bank is ready to serve and cooperate reinsurance companies as of the aforementioned time period.

Currently, Ethiopia has no single reinsurance company.



UK companies’ complaints get PM’s attention


UK companies operating in Ethiopia stepped into the Prime Minister’s office on March 7 with complaints over logistics, transport and customs clearance and received an encouraging response from Prime Minister Hailemariam Desalegn. 

“It was encouraging that the prime minister was willing to engage with British businesses. This meeting was a great opportunity for him to hear about current problems, some of which he has undertaken to try to resolve. But he was also able to learn of the companies’ enthusiasm for doing business in Ethiopia and their very positive take on the long-term potential of this country.” Greg Doery, UK ambassador to Ethiopia explained to The Reporter via email.

PM Hailemariam urged the various federal institutions to resolve the problems as quickly as possible afterwards, The Reporter has learnt. Diageo, the owner of Meta Brewery, Tullow Oil, Pittards, New Age, Startex International, and Unilever, which is currently aiming to opening its factory to produce detergents in Ethiopia are among the companies that reached out to the office of the premier. Major problems raised during the meeting relate to logistics, transport and customs clearance which are typically related with long delays and hence high transaction costs.

Moreover, slowness in issuing mining exploration licenses, fast-tracking imports for oil and gas exploration industry, challenges with power supply and tendering system with new central bank ratios of debt/equity (50/50) which contrasts with international norms were central in the discussion.

Trade between UK and Ethiopia recently increased as Ethiopia’s export has grown by nearly 50 percent and import to Ethiopia has grown by nearly 30 percent despite the fact that this figure was higher in 2012. The trend with UK investors has also increased as investment up markedly over the past six years. The companies’ joint statement uttered through the ambassadors assure that Ethiopia has become a place of attraction for many UK investors and companies, however, they put their resentment forward that those problems indicated shall have adjusted to promote the opportunity to save the government money and reduce the scope for corruption.



Tullow starts drilling Shimela well


The Shimela drilling site

The Shimela drilling site


– Undertakes community development projects

The British oil company that is prospecting for oil in southern Ethiopia, Tullow Oil, on Tuesday started drilling the third exploration well in the South Omo basin, near Chew Bahir.

The well, dubbed Shimela, is named after an abundant bird in the area. The drilling site is located in Hamer and Bena Tsemay Weredas of South Omo zone.  The drilling rig is owned and operated by the Polish company, Oil and Gas Exploration Company (OGEC).  The well will have a depth of 2800 m and it will take three month to finalize the drilling, if everything goes according to schedule.  

A recent report prepared by Tullow indicates that the company and its partners have completed a 1,174 kilometer 2D seismic program in the Chew Bahir Basin on the eastern portion of the South Omo Block. According to the report, the survey identified a number of prospects and leads. The report said the Shimela prospect has been identified as the first well in the area, adding that a second well location is also being considered for 2014.

Previously, Tullow drilled the Sabisa1 and Tuletule1 in the South Omo Block. Oil and gas shows were noted in the first well while the second well was abandoned as a dry hole.

In a related news, Tullow Oil is undertaking various community development projects in the areas, where it is prospecting for oil at a cost of 19 million birr.

Sisay Zerihun, corporate communication advisor at Tullow, told The Reporter that Tullow has been undertaking various community development projects in South Omo since 2011. Sisay said the project comprises assistance to the health, water and education sectors.  The company has granted three ambulances for pastoralist and semi-pastoralist weredas in South Omo zone. It has also donated modern medical equipment for four health stations.

In a statement sent to The Reporter, Tullow said it drilled five water wells and maintained seven more water-wells in the zone. The company said it distributed desks, blackboards, uniforms, books and other educational materials for six primary schools.  It also offered entrepreneurship courses for 100 youths residing in Humer, Dasenech, Natsemay weredas and South Omo zones. Tullow said it is planning to undertake similar developemt projects in South Omo zone, and in the Borena zone of  the Oromia Regional State.  The company said it was working on  development projects based in a need assessment survey conducted by the community and local administrations.

In addition to the community development projects being undertaken in the exploration areas Tullow has been assisting the Paulos Hospital Millennium Medical College in Addis Ababa.  Sisay said Tullow has a firm commitment to executing corporate social responsibility adding that it will continue assisting community development projects in different parts of the country.



Ethiopia, Djibouti sign cross-border water supply agreement


Finance and Economic Development Minister Sufian Ahmed and his Djiboutian counterpart Ilyas Moussa Dawaleh signed an agreement for the construction of a water pipeline linking the two countries last Sunday, Djibouti’s La Nation reported.

Under the agreement, Djibouti will construct a pipeline to carry water from the Ethiopian town of Hadagala 70 kilometres to the Guelileh border crossing, then all the way to Djibouti City. Ethiopia will in turn share water without charge. The project will take an estimated 18 months to complete and will supply Djibouti with 100,000 cubic metres of water, an increase from its current rate of 20,000 cubic metres.

The agreement, signed during Sufian’s visit to Djibouti, is one of several co-operation accords to integrate the economies of the two countries, including the construction of a railway linking Makalle in Ethiopia and Djibouti’s Tadjourah Port and the rehabilitation of the railway linking Addis Ababa and Djibouti City.



Institutions sign MoU to jointly work on good governance


The Institution of Ombudsman and the Ministry of Civil Service signed a memorandum of understanding (MoU) to jointly work in good governance.

Chief Ombudswoman Fozya Amin said on the occasion that the MoU would help improve good governance related problems jointly handled by the two sides and introduce accountability.

It could also make the works underway to consolidate the systems in civil service institutions entertain grievances effectively, she added.

Besides, it would create a situation whereby citizens can get solutions for their grievances within their neighborhoods, according to the Chief Ombudswoman.

Civil Service State Minister Temesgen Tilahun on his part said the MoU focuses, among others, on ensuring the supremacy of law and urged executive bodies to work in accordance with the law.

He said the MoU would help create an environment in which all citizens are served transparently and with accountability.

The State Minister said many citizens are suffering from red tape as the various organizations have failed to realize the Citizens’ Charter, adding that the MoU would help carry out efficient and productive activities.



Five consulting firms bidding to supervise Bole airport expansion project


The final draft design of the Addis Ababa Bole International Airport terminal expansion project

The final draft design of the Addis Ababa Bole International Airport terminal expansion project


Enterprise to negotiate with contractor on price

Five international construction consulting firms are bidding to supervise the Addis Ababa Bole International Airport passenger terminal expansion project and consult the planned new mega-airport that will be constructed outside Addis Ababa. 

The Ethiopian Airports Enterprise recently floated a tender inviting international consulting companies to supervise the Addis Ababa Bole International Airport passenger terminal expansion project and consult the enterprise on the new mega international airport planned to be constructed outside the capital city. Chief executive officer of the Ethiopian Airports Enterprise Tewodros Dawit told The Reporter that 38 companies bought the bidding document but only five of them submitted their proposals to the enterprise.

According to Tewodros, the bidding committee was evaluating the bid proposals adding that the evaluation work will be finalized within three weeks. The design of the expansion project is drafted by a Singapore company called CPG Airport Architects. Different professionals of the enterprise and the Ethiopian Airlines are commenting on the final draft design. The final design will be unveiled after two weeks.

It is to be recalled that the Ethiopian Airports Enterprise was under preparation to undertake a major expansion work at the Addis Ababa Bole International Airport passengers’ terminal at a cost of 250 million dollars.

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) with all related equipment and the construction of a new VIP passengers’ terminal.

The new terminal will house boarding areas, lounges, recreation centers, shopping malls, offices and other facilities. New boarding gates, boarding bridges, and new parking area are parts of the expansion project. The new parking area will serve passengers, and staff members.

The other major component of the expansion project is the VIP terminal. The first of its type in Ethiopia, the VIP terminal will be dedicated to leaders, senior government officials, diplomats and other dignitaries. The VIP terminal will have various saloons, lounges, conference rooms, recreation centers, duty free shops, IT center and exclusive parking lot.

A 250 million dollars loan has been secured from the government of China. An agreement was signed by the Ethiopian Ministry of Finance and Economic Development and the Chinese government. The loan agreement was endorsed by the Ethiopian Parliament on Thursday. The Chinese construction firm, CCCC, is the contractor for the expansion project.  The expansion work is expected to be finalized within three years.

Tewodros said CCCC will present its price quotation to the enterprise, adding that there will be negotiations on price.

The enterprise is under preparation to embark on the international multi-hub project. The wining consulting firm will also undertake a study on the new airport planned to be built out of Addis Ababa. Three locations have been identified for the construction of the new international airport (mega hub). These locations are found near Modjo, Teji, and Dukem towns. The Ethiopian airport Enterprise is undertaking a study on the site location.

The consultant that the enterprise will hire for the Addis Ababa Bole International Airport expansion project will also undertake the study on the mega-hub project. The consultant would undertake feasibility, technical, and financial studies as well as produce airport master plan. The consultant will be tasked to study the integration of the Addis Ababa Bole International Airport with the mega-hub.







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