20 May 2014 News Briefs (UPDATED)


Ethiopia: If the shoe fits, build zones


Textile companies and retailers are setting up operations in and around Addis Ababa to take advantage of the low cost of labour


 Chinese shoemaker Huajian plans to employ about 100,000 people in Ethiopia by 2023. Photo©Petterik Wiggers/PANOS-REA

Chinese shoemaker Huajian plans to employ about 100,000 people in Ethiopia by 2023. Photo©Petterik Wiggers/PANOS-REA


At the Bole Lemi Industrial Zone, 15km east of Addis Ababa, Taiwanese footwear manufacturer George Shoe Corporation is preparing to begin production.

In mid-April, hundreds of eager new recruits – many of them university graduates – were preparing to begin work, making up to 1,500 pairs of shoes a day.

Like its Chinese competitor Huajian – which plans to create a light manufacturing zone on the outskirts of the capital by 2023, providing employment for around 100,000 people – George has big ambitions for its Ethiopian enterprise.

In just a few years time, the company plans to open its own industrial park in Modjo, one of the country’s main tannery districts, directly employing 10,000 workers.


Leather, textile zones


Bole Lemi is one of two indus- trial zones (IZs) being established in Addis Ababa – the second is Kilinto, situated in the capital’s southern suburbs – and the government has plans to construct similar complexes in other cities, starting with Dire Dawa, Kombolcha and Awassa.

These IZs are a key feature of the ruling Ethiopian People’s Revolutionary Democratic Front’s development strategy.

The idea is to provide the space and infrastructure needed for light manufacturing to thrive. “We are going to open zones in leather and tex- tiles, but also agroprocessing,” says Sisay Gemechu, the state minister for industry.

Ethiopia slipped 37 places – from 104 in 2007 to 141 in 2012 – in the World Bank Trade Logistics Index

However, only two of Bole Lemi’s 20 factories are occupied, both by George. Sisay says that all of the completed units are rented and that it is confident the 10 further facilities being constructed will be too.

Bole Lemi seems to be a perfect metaphor for the current Ethiopian manfacturing sector: enormous potential that is as yet unfulfilled.

United Kingdom-based leather goods manufacturer Pittards is steadily expanding production in Ethiopia, as is Turkish-owned Ayka Textile.

Retailers H&M and Tesco are sponsoring training for textile workers with the aim of sourcing garments from the country. Despite this, foreign direct investment (FDI) remains low, reaching $1bn in the 2012/2013 fiscal year.

One Western economist blames the modest level of FDI on “the heavy hand of the Ethiopian government in the private sector”.

A 2012 World Bank study on Chinese FDI in Ethiopia found that 54% and 84% of investors, respectively, cited tax administration and customs and trade regulations as major constraints on their businesses.

An underdeveloped financial sector and a dysfunctional foreign exchange market are other impediments, says Jan Mikkelsen, the International Monetary Fund representative in Ethiopia.


Trading hurdles


Trade logistics in this landlocked country are also problematic.

According to the World Bank, Ethiopia has dropped from 104th to 141th place in its rankings during the past five years.

The majority of Ethiopia’s imports and exports are trucked to and from the port of Djibouti along a treacherous highway and the cost is phenomenal. A new rail link to Djibouti, scheduled for completion at the end of 2015, will reduce costs.

Even with these considerable constraints, Helen Hai, former vice-president of Huajian, argues that Ethiopia will be able to exploit its major comparative advantage – a competitive and young workforce.

“The labour cost in shoemaking in China is about 22% of the overall cost portfolio,” she explains. “In China today, the cost of each labourer is $500 [a month]. In Ethiopia it is only $50. So, the question, comes down to the efficiency.”

She claims that after one year of on-the-job training, her Ethiopian employees were able to achieve 70% of the efficiency of Chinese workers, meaning that other investors could soon follow.



Djibouti and Ethiopia Pursuing Geothermal Power Schemes


Djibouti and Ethiopia are developing new geothermal power capacities that are intended to enable them meet increasing demand for electricity and enhance their sustainable-energy portfolio.

The World Bank has provided details about its contractor prequalification procedure for the drilling of four full-size geothermal production wells in Djibouti, while Icelandic powerplant builder Reykjavik Geothermal says it hopes to commence its $2-billion Corbetti Geothermal Power Project in Ethiopia in July.

The World Bank, one of the financiers of the $31-million Djibouti Geothermal Power Project, which is being developed by another Icelandic firm, Reykjavik Energy Invest, advertised the invitation for bids from qualified drilling companies to execute the project. Funds will come from a number of institutions.

The bank said the steam-well drilling program entails civil engineering preparatory works, to be funded by the African Development Bank (AfDB) at Lake Assal geothermal field.

The second component—the actual drilling of the four wells—is co-financed by Global Environment Facility, the OPEC Fund for International Development and the World Bank’s International Development Association (IDA). French financier Agence Française de Développement (AFD) will fund the acquisition of steel material needed during the execution of the drilling program, while the inspection and testing of reservoir flow rates will be supported by Energy Sector Management Assistance Program.

Technical assistance support will be provided by the AfDB for designing the drilling program and the well test protocol by a geothermal consulting company yet to be named.

The final component would involve executing the well test protocol and ensuring third-party certification of the results of the drilling program before preparing a technical feasibility study for the geothermal power plant, “provided that the geothermal resource is suitable for power generation.”

Djama Guelleh, Djibouti’s head of electricity, said if the geothermal resource is proven to be commercially viable for large-scale power generation, “a follow-on project will be undertaken to competitively offer the geothermal resource to the international independent-power-producer market.”

The project, to be developed under a public-private partnership, would help Djibouti cut reliance on imported electricity from neighboring Ethiopia and meet the country’s peak demand of 70 MW, of which Ethiopia meets 65%.

In Ethiopia, which gets up to 90% of its 2,000-MW installed power-generating capacity from dams, Reykjavik Geothermal said in March it will, by next July, commence the development of the $2-billion geothermal project with capacity to generate 500 MW.



Large Foreign Presence at Ethiopia’s Second Hotel Show


The second event saw an increase in the number of participants, including companies from Turkey, India and China



The second hotel show opened last Friday May 16, 2014, for a three-day hospitality trade fair. There was a modest improvement from the first event in the number of participants and brands.

The first fair took place eight months ago, in October 2013, at the United Nations Conference Centre. This event saw 50 participating companies and 120 brands, according to the event organiser, Ozzie Business & Hospitality Group. The second trade fair, officially opened by Amin Abdulkadir, minister of Culture & Tourism, and Kumeneger Teketel, Ozzie’s managing director, at the Millennium Hall, has attracted 70 participants with 200 brands in hospitality and related sectors, including from countries such as China, India and Turkey. State Minister for Foreign Affairs, Dewano Kedir, was also one of the invited guests attending the event.

Event sponsors included MNS and Ozti, both from Turkey, among several others from the same country, as well as Sealed Air and Italco, from the US.

MNS recently inaugurated a plant at Legedadi, Oromia, making beds, sofas, pillows, towels, spring mattresses and wall-to-wall carpets. The company’s brochure claims that 80pc of the product will be for export. Ozti supplies kitchenware, all imported from Turkey.

The event showcases hotels, resorts, lodges, consultancy firms and products, such as hotel equipment, hotel supplies, construction materials, interior design, food and beverages. Nergek, a local supplier of electromechanical products, is now importing toilet materials designed for people with disabilities, including toilet seats, sinks and a shower set on which people can sit or stand.

Ozzie’s original intention was to hold the hospitality trade fair every six month – a target that it missed by barely two months. The company wants to see African businesses in the hospitality sector at the next event, said Kumneger.

Not happy with the service of the hospitality sector in Ethiopia, Esayas Woldemariam, international service managing director at Ethiopian Airlines, said at the event that service providers needed to change their mentality and become more service-oriented. Ethiopian has many passengers that transit through Ethiopia and that have to stay at hotels, making the airline the main customer of the hotel industry.



Multi-Donor Initiative to Support Private Sector Development


The Ethiopian government has signed a Governance Framework for a Multi-Donor Initiative (MDI) for its private sector development (PSD) in respect to the country’s Growth and Transformation Plan (GTP) on Thursday, May 15, 2014.

The document was signed between the Ethiopian government and donor partners such as the Department for International Development (DFID), the Italian Cooperation, the Swedish International Development Agency (SIDA) and the Canadian International Development Agency (CIDA). The International Finance Corporation (IFC), in collaboration with the Ethiopian government and donor partners, is acting as a secretariat, implementing entity, and administrator of donor’s funds.

The IFC’s strategy for Ethiopia includes bolstering direct investments in priority sectors, small and micro enterprise development and supporting the government in improving the investment climate.

“The overall aim of the MDI is to support Ethiopia’s GTP objectives, including promoting and investing in scalable private sector interventions, aiming to support development and increase access to finance,” stated Resident Representative of the IFC, Amadou Labara.

This signing serves to formalize the collaboration among IFC, the Ethiopian government and donor partners that has now existed for nearly two years.



Celebrated Ethiopian entrepreneur behind soleRebels reveals her next big idea




Bethlehem Tilahun Alemu is one of Africa’s most celebrated entrepreneurs. In 2004 she founded soleRebels in Ethiopia, and the company has since become one of Africa’s largest footwear brands with its range of artisan-made shoes now selling in over 55 countries globally.

Bethlehem Tilahun Alemu

According to Making It magazine, soleRebels is set to generate US$15m-$20m in revenue by 2015. Alemu’s success has led her to be named by CNN as one of 12 “smart women” entrepreneurs in the past century, alongside Coco Chanel and Elizabeth Arden. She has also been featured on the front cover of Forbes magazine and in 2011 was selected as a Young Global Leader by the World Economic Forum.

Last week, Alemu officially launched her second company, Republic of Leather, an online startup that addresses the global trend of consumers wanting to have more control over how and where their products are produced. Republic of Leather allows just this.

Alemu told How we made it in Africa the idea stemmed from her love for leather products and the fact that her home country, Ethiopia, is a key source of quality hides and leathers used by many global luxury brands to craft high end articles.

“I have worked side by side with the producers of these very same fine leathers for years as I built my footwear brand soleRebels. I have deep relationships that span from the supply side – right from the origin and selection of the hides and skins themselves – through to our tanners network.”

The company’s online platform allows customers to select their products from a range of leather goods, such as jackets, bags and gloves. Customers can then use an online app to customise details, from the leather type and colour to the stitch patterns used, and can then choose the artisan and location around the planet where they want their designs to be handcrafted.

“I saw that there were many areas around the globe where leather crafting and production had been undermined and had withered, despite its economic importance,” explained Alemu.

“I knew that a platform that tapped into these rich global talents and resources would have the power to reinvigorate these centres of production and create fantastic employment opportunities in communities around the planet, while also reinterpreting how – and literally where – luxury goods are made.”

According to Alemu, the company also allows customers to choose from a list of 850,000 accredited charities around the world to which 5% of the purchase price will be donated on their behalf.

“Our vision at Republic of Leather is to re-imagine the luxury leather goods market by powering the creativity of our customers, creating jobs for craftspeople all over the planet, and energising the causes our customers are passionate about,” she emphasised.

At the moment, the Republic of Leather production sites are in Ethiopia’s capital, Addis Ababa, Nicaragua, the UK and the US, but Alemu aims to add 45 more country sites within the next six to 18 months.



From Track to Highway


Marathon motors, the sole importer and distributor of the South Korea-based Hyundai vehicles has introduced a new brand car: Grand i10, for the Ethiopian market on Friday, May 16, 2014. During the event that was held at the facility of the company around the Diaspora roundabout, the legendary athlete-turned-businessman Haile Gebreselassie, owner and chairman of the company, is seen here chatting with Kim Jang Gwan, Ambassador of the Republic of Korea to Ethiopia, immediate left and Taye Dibekulu, president of United Bank, far left and Melkamu Assefa, chief executive of Marathon Motors on his immediate right and Tsegaye Tetemqe, president of Zemen Bank on the far right.



Ethiopia receives nine new vessels in Djibouti


By Mohammed Taha Tewekel


ADDIS ABABA – The Ethiopian government on Saturday received nine new vessels worth over $300 million from China at a ceremony organized in Djibouti.

“The vessels are not only Ethiopian assets but they are also Djibouti’s properties,” Ethiopian Prime Minister Hailemariam Desalegn said at the ceremony.

“The vessels indicate the rapid development in Ethiopia,” he added.

Named after the capital cities of Ethiopia’s regional states, the vessels were built with loans from the Chinese government.

Most of Ethiopia’s exports and imports are transported through the Port of Djibouti, which is located 900km east of Ethiopian capital Addis Ababa.

“Djibouti benefits from Ethiopia’s rapid development and in turn Djibouti’s growth is an advantage to Ethiopia,” Djiboutian President Ismail Omar Guelleh told the ceremony.

“The relation between Ethiopia and Djibouti is not limited to a government-to-government level but it has been intensified in people-to-people ties,” he said.

The Djiboutian leader went on to say that relations between the two neighbors are boosting in different spheres, including the economic and social fields.

“Djibouti gives a port service to Ethiopia but it does not consider that it is giving the service to another country but regards it as it is doing it for itself,” he said.

“We believe that Ethiopia is Djibouti and Djibouti is Ethiopia, no difference at all,” he added, going on to reiterate that the new vessels will further help speed up the ongoing development endeavors in Ethiopia.

Ethiopia had used Eritrean ports until 1998 when the two countries engaged in a war of their border disputes.

Following the war, Ethiopian began to use Djibouti ports to export its products.



Thought for Food


The International Food Policy Research Institute (IFPRI) 2020 Resilience Conference, held May 15-17, 2014 in Addis Ababa, Ethiopia, brought together policymakers, practitioners, and scholars to discuss how resilience can be strengthened for food and nutrition security. Ethiopia was lauded for its success in building resilience on the food front, specifically when the Horn of Africa was hit by the worst drought in 2011. It is systems like Ethiopia’s safety net program that are being rewarded and recommended on the road to having food and nutrition security.



MoI Partners up with a Chinese Company to Establish an Industrial Zone


The Ministry of Industry and Zhejiang Jinda Flax Llc, a Chinese textile company, are going to establish an industrial zone designated for textile factories, around Bole Lemi area in the Bole District, according to the Memorandum of Understating (MoU) the Ministry of Industry (MoI) and the Chinese company signed on Tuesday, May 13, 2014.

The formal Investment Agreement is expected to be signed by the end of July 2014, when the land needed for the project is available. The two parties have agreed to work jointly for the establishment, development and construction of the coming Kingdom Linen Textile Industrial Zone in Ethiopia, a new company that will be established by the two parties for this purpose.

Zhejiang Jinda is a subsidiary of Chinese Kingdom Holdings Limited and produces textile decoration fabrics such as weave fabrics, yarn decorated fabrics and calico (not fully processed fabrics) printing fabrics which are widely applied to clothing sofas, curtains and bed appliances in its factory in China.

The MoI is expected to provide the Chinese company with the Red line and Coordinates Graph of the land and the soil analysis report of the future site of the industrial zone within two weeks after signing this MoU, according to the document.

Within two months after the signing of the Investment Agreement, Kingdom shall be granted all the necessary registration documents of the newly formed company in Ethiopia and the certificate of approval of investment of the project.

Before June 2015, the Chinese company will commence the construction of phase one of the industrial zone project. In addition, the Chinese company will train 50 Ethiopian recruits in industrial park production facilities.

For industrial purposes the Ministry has allocated a total of 5,130ha in four cities and towns across the country, including Addis Abeba, Dire Dawa, a self-administered city about 515km east of the capital; Kombolcha, 376km to the north of the capital in Amhara region; Shillabo, 1,140km from the capital in the Somali Regional State; Hawassa, 273km south of the capital in the Southern Region.

Eastern Industrial Zone in Dukem, 37km southeast of Addis Abeba on 200ha of land, is the only private operational zone that was implemented by Chinese investors. Eleven companies are already involved in the manufacture of leather and leather products, textile and garments and car assembly at this zone.

Bole Lemi is the only other functional industrial zone which was constructed by the government. It has five sheds which are constructed by the Ethiopian government, each on 5,500sqm of land with a total cost of 2.5 billion Br, and given to investors. The remaining 10 shades each on 11,000sqm are under construction financed by a loan, which the government has obtained from the World Bank (WB).

There are also projects of industrial zones in different levels of execution in Sendafa, Akaki Kaliti, Legetafo, and Mekanisa Lebu.



Ministry Registers Impressive Gains in Irrigation Works


Ministry Registers Impressive Gains in Irrigation Works

Addis Ababa May 20/2014The Ministry of Water, Irrigation and Energy said great strides have been taken in the construction and expansion of irrigation schemes over the past two decades.

Water, Irrigation and Energy Minister Alemayehu Tegenu made the remark during a panel discussion organized in connection with the 23rd anniversary of the victory of May 28 by the employees of the ministry.

He said the land irrigated during the fall of the military regime was only 61,000 hectares as compared to the 305,156 hectares made irrigable in the past two decades.

Irrigation development works have been undertaken extensively throughout the country to further boost irrigation, according to the minister.

Speaking of potable water coverage, Alemayehu said the very low coverage of drinkable water in the late 1990s has grown fourfold during the last 23 years. He added that the ministry will work hard to solve the shortage of clean water witnessed in some localities permanently.

With respect to electric power generation, the 361 MW produced when the current government took power has jumped over 2,268 MW, he added. Half of the population of the country can now access electric power.

He indicated that the ministry will strive to solve good governance problems related to electric power supply in some areas.


Omo-Kuraz Sugar Factory to Commence Operation Next Year


Omo-Kuraz Sugar Factory to Commence Operation Next Year

Addis Ababa May 20/2014 – Over 80 percent of construction of the Omo-Kuraz I sugar factory, the first of the seven factories to be built in South Omo Zone, of South Ethiopia Peoples’ State has so far finalized, the Office of the Project said.

The construction of the factory, which was started in 2004E.C, is expected to be finalized at the end of this year, said Maru Mola the project coordinator.

Up on going fully operational at the beginning of 2007E.C, the factory will crush 12,000 tons sugarcane per day.

Related works such as construction of irrigation schemes, diversion of the Omo river, sugarcane plantation and building of residential houses for the employees are being carried out, said factory general manager, Nuredin Asaro. Sugarcane plantation is being undertaken on over 5,000 hectares land.

Temporary diversion of the Omo river has carried out in a bid to construct the main dam.

The building of the factory is benefiting the local people through construction of infrastructure such as roads, health and educational institutions. The Omo-Kuraz sugar project has created jobs for 18,000 individuals.

The Omo-Kuraz project is one of mega projects the country has set to undertake during the first growth and transformation plan period, which will last after a year. Seven sugar factories, each with a daily sugarcane crushing capacity of 12,000 tons will be constructed under this project.


Fincha Expands Sugar Cane Cultivation


Fincha Sugar Factory, in the Oromia region is undertaking expansion work to double its production capacity, by cultivating an additional 11,700ha of sugarcane which pushes the total area cultivated with sugarcane to 21,000ha.

The factory currently produces 1.1 million quintals of sugar and eight million litres of ethanol a year. Upon completion of the expansion work, the factory expects a production of 2.1 million quintals of sugar and 20 million litres of ethanol a year.

Fincha is producing seven megawatts of electric power but after the finalisation of the project it will produce 31mW, and it will supply 10mW to the national grid system.

Fincha is the oldest sugar factory in Ethiopia as well as the first sugar factory to install an ethanol plant with a production capacity of 45,000 litres per day. By the end the Growth and Transformation Plan (GTP), Fincha plans to produce 270,000tn of sugar and 20,000 cubic litres of ethanol a day.



Aleta Coffee Exporter Inaugurates Three Factories




Aleta Land Coffee Plc is going to inaugurate its three big factories in the Southern region of Ethiopia, in Hawassa city on Friday, May 24, 2014.

According to the statement from Aleta, the inauguration ceremony will be graced by the president of the Federal Democratic Republic of Ethiopia Mulatu Teshome (PhD), the president of Hawassa and other invited ministers and guests.

Aleta Land Coffee Plc was established in 2005 with an eight million dollar initial capital. The company is engaged with coffee exporting activities and providing coffee cleaning and warehousing services for other exporters.

Currently, Aleta owns eight full-fledged washed-coffee factories in southern Ethiopia, particularly in the Sidamo highland areas.



Tax Revenue Edges Closer to Targets, as Authority Cracks Down on Contraband


High employee turnover, low level of cash register machine use and poor overdue tax collection continue to hamper ambitions


The Ethiopian Revenue & Customs Authority (ERCA) has collected 79 billion Br in revenue over the last nine months, falling short of a target of 88.3 billion. This was according to its nine-month performance report, released on Monday, May 12, 2014.

The Authority’s revenue collection projection for the current fiscal year is 16.7 billion Br higher than that collected during the 2012/13 fiscal year – an increase of 27pc. Addis Abeba contributed 10.7 billion Br to the nine-month collection, which is 13.5pc of the total revenue.

From the total amount of 79 billion Br, 34.5 million Br, or 43.5pc, of it was obtained from export taxation. Indirect tax contributed 56.3 billion Br, or 72.3pc. The remaining 21.5 billion came from direct tax.

The authority also reported that it has prevented 23.4 million Br worth of commodities from being smuggled out of the country. This figure shows an 8.1 million Br improvement from last year’s performance. These commodities include livestock, khat, coffee, gold, silver, cereals, vegetables and fruits. Livestock alone was estimated to be worth 11.34 million Br. Most of the smuggling, amounting to 14.3 million Br, was stopped at the Bahir Dar checkpoint.

The smuggling of home goods, including such items as garments, electronics, foods, cigarettes, cosmetics and drugs, was worth a hefty 314 million Br.

The Hawassa Branch office of the ERCA intercepted the largest proportion: 64.87 million Br worth of contraband. Garments, new and used, also had the greater share among the commodities, at 147 million Br. The total sum has decreased by 17.3 million Br from the previous year, the report said.

The ERCA also reported hiring 2,046 new employees during the last three quarters, during which time 1,502 have quit the company. Of the 122 employees the ERCA fired, 61 were made to leave because of corruption.

Cash register machine use was intended to reach 37,440, but only 19,452 tax payers are using the machines. The Authority has thus failed to attain its goal by almost 50pc.

The Authority also sued 2,949 individuals for tax fraud and contraband. Eighty-five percent of the criminal cases and 97.25pc of civil cases were ruled in its favour, the report said.

The report listed high employee turnover, poor level of cash register machine use by businesses and low performance in the collection of overdue taxes as reasons why the Authority did not achieve its target.

According to the Growth & Transformation Plan (GTP), by the end of 2015 total revenue and tax revenue contribution to the country’s economy will reach 17pc and 15pc, respectively.

Despite only collecting 84.2 billion Br during the last fiscal year, the ERCA plans to collect 116.7 billion Br in 2013/14. The ERCA has managed to expand its revenue collection from 19 billion Br, in 2008, to 84.2 billion Br in the 2012/13 fiscal year.



New Zealand To Open Embassy in Addis Ababa


New Zealand To Open Embassy in Addis Ababa


Addis Ababa May 20/2014 – A delegation led by Governor-General Jerry Mateparae of New Zealand arrived here on May 20, 2014 for an official visit.

The delegation was welcomed on arrival at the Bole International Airport by Foreign Minister Dr. Tedros Adhanom and other high-ranking government officials.

During his two-day stay in Ethiopia, the Governor- General will confer with Prime Minister Hailemariam Dessalegn and President Mulatu Teshome on ways of strengthening the diplomatic and economic relations of the two countries.

He is also expected to hold talks with Dr. Nkosazana Dlamini Zuma, Chairperson of the African Union Commission.

The Governor-General will officially inaugurate the Embassy of New Zealand in Addis Ababa tomorrow, according to Ministry of Foreign Affairs.

The opening of the embassy would help improve the relation of the two countries and enable them to collaborate in different sectors, the ministry added.


Chinese EXIM Bank to finance Aysha wind power


 – Three Chinese firms shortlisted for Geba hydro-power project    

 – Over USD 32.7 mln secured from power export

The Ministry of Water, Energy and Irrigation (MoWEI) said Tuesday that it had received promising signals of getting a loan from the Export-Import (EXIM) Bank of China to finance the Aysha II wind energy project, which is located in the Somali Regional State.

The Minister, Alemayehu Tegenu, who was presenting the nine-month report to  the House of Peoples’ Representatives (HPR) said that negotiations with a Chinese company, Dongfang Electric Corporation (DEC), were conducted the previous year. Though the outcome of the negotiations had been presented for decision, it had taken a long time to secure finance for the project, he added.

But now the EXIM Bank of China had indicated that it would finance the Aysha II project and as a result the management team of EEPCo had already endorsed the contractual negotiations that were made with DEC so as to enable the signing of a contractual agreement.

The Aysha II project is part of the four wind-power generating projects which collectively produce 444 MW of power. These projects include Ashegoda, Adama 1, Adama 2, Aysha 1 and Aysha 2.

Like the Aysha project, one of the main projects that had been included for the budget year was a study to start the Asella wind energy project, Alemayehu told MPs.

According to the Minister, the office was able to carry out 60 percent of the plan. As a result, the technical evaluation of the consultant had been endorsed by the management with no objection. He added that the technical evaluation was sent to the African Development Bank (AfDB) and that its decision was being awaited.

However, the Minister did not explain how much money the loan is expected to be from AfDB as well as the details of the Asella wind farm.

Speaking on a similar project, the Minister indicated that the Geba Hydropower electric project had attracted more Chinese companies. Geba is a tributary of Baro River.

The Minister, who also recalled that the corporation had agreed with four Chinese companies earlier, said that their documents were being evaluated.

“Now two of them have formed a joint venture and asked to carry on with the project together. In general, three bid documents have been presented to the corporation, and their documents are being evaluated thoroughly by a team of experts,” Alemayehu said.

Meanwhile, according to the Minister, the Chemoga Yeda hydroelectric power- generating project, located in the Gojjam area of the Amhara Regional State, had not yet been launched because the loan that was requested by Water Right consultants to the Chinese government had not been secured on schedule.

Alemayehu indicated that his office had put in place three power projects under hydroelectric power projects, including Tekeze, Fincha Amerti Neshe and Beles.

Though most parts of these projects were achieved successfully during the budget year, the Fincha Amerti Neshe project faces some challenges in resettlement issues because there are residents who live near the reservoir.

“The resettlement process of the farmers residing along the reservoir area remains halted since July 2013 because of the unwillingness of the farmers to move to other areas,” Alemayehu told MPs, adding that efforts were under way to find a solution.

In the same report, the Minister indicated that the nation had amassed 32.7 million USD in the first nine months of the budget year from the exported energy to the Sudan and Djibouti. According to him, for the current year, 867.89 GWh of electric energy was planned to be sold to the two neighboring nations.  However, only 52.3 percent of the target had been met.



China to extend USD 500 mln to Ethiopian to finance its aircraft purchases


– In an unprecedented manner, the government of China is going to extend a 500 million dollar loan to Ethiopian Airlines to finance Boeing jetliner purchases.  

– During Chinese Premier Li Keqiang’s state visit to Ethiopia last week, a Memorandum of Understanding (MoU) was signed between Ethiopian Airlines and ICBC Financial Leasing Co., Ltd. 

A senior official at Ethiopian told The Reporter that the MoU relates only to Boeing aircrafts but in the future it can be extended to other fleet types. “The understanding is for 500 million dollars in financial facility. The loan negotiation will be the next stage,” the official said.

The senior official said that it was the first time that a Chinese bank had taken the lead in providing aircraft financing to Ethiopian. However, ICBC was already a junior loan partner in the B777-200LR freighter deal.

According to the MoU, ICBC Leasing will provide Ethiopian Airlines with financial support for its fleet expansion plan, including but not limited to B737 and B787 aircrafts in the form of finance lease, sale and lease back, commercial loans or operating lease from ICBC Leasing’s Boeing order.

Ethiopian said the MOU was one of the largest financial cooperation in the aviation industry between the two countries, which is an important step for China’s financial industry to go international.

“We are delighted to work with Ethiopian Airlines – the top leading operator in Africa, and to support its fleet expansion.” Chief Executive Officer of ICBC Leasing, Cong Lin, said “The MoU marks a significant milestone between China’s Lessors and African airlines, which will promote deep financial cooperation between China and Africa.”

ICBC Leasing, a wholly owned subsidiary of Industrial and Commercial Bank of China (ICBC), with a registered capital of 11 billion Yuan, was founded in November 2007. ICBC said it was the largest and the most innovative Lessor in China. With domestic and foreign assets of 200 billion Yuan as of the end of March 2014, it manages more than 380 aircraft, of which 168 were delivered to more than 50 domestic and foreign world-class airlines. ICBC Leasing claims to be the top aviation leasing company in China and one of the leading Lessors in the international aviation leasing market.

“We are pleased to have ICBC Leasing, a leading global leasing company, as a strategic partner.” Chief Executive Officer of Ethiopian Airlines, Tewolde Gebremariam, said. “The cooperation with ICBC Leasing and its parent company ICBC Bank, the largest commercial bank in the world, will support our Vision 2025 of fast, profitable and sustainable growth strategy. We look forward to a long-term and mutually beneficial partnership with ICBC.”

Chinese banks are financing the ongoing construction of Ethiopian’s five- star hotel and new maintenance hangar.

China is not known in the global aviation industry for manufacturing and supplying aircraft for international carriers. However, the introduction of a new regional jetliner by the Commercial Aircraft Corporation of China (COMAC) was a success.

In 2010, COMAC announced its plan to manufacture a narrow body aircraft with a seat capacity of 158-174. The regional aircraft – COMAC C919 – will be the largest commercial airliner designed and built in China. The aircraft is currently under development. Its first flight is expected to take place next year, with first deliveries scheduled for 2016.

So far COMAC has won 400 orders for the C919, the mainland’s largest locally produced aircraft intended to compete with the Boeing 737 and Airbus A320 narrow body jetliners. Aviation experts forecast that COMAC will be a strong competitor of Boeing and Airbus in 20 years’ time. According to aviation experts, COMAC’s immediate focus is on the domestic market in China but it could break the duopoly by Boeing and Airbus after 20 years.

Sources told The Reporter that COMAC has an interest in selling the C919 to Ethiopian. When asked if ICBC’s financing could be a sign of Ethiopian interest to buy Chinese made aircrafts, the senior executive said “this is purely a financial facility arrangement. Aircraft evaluation is done purely on technical consideration by experts, fitness for mission (meeting our network requirement) and fleet commonality for cost consideration.”

Established in 1945, Ethiopian is a national flag carrier that currently serves 80 international destinations across five continents with over 200 daily flights, and using the latest technology aircrafts including B777s and B787s.

ICBC Leasing is the largest bank in the world by total assets and market capitalization. It is one of China’s ‘Big Four’ state-owned commercial banks. It was founded as a limited company on January 1, 1984. As of March 2010, it has assets worth USD 1.9 trillion, with over 18,000 outlets including 106 overseas branches and agents globally. In 2013 and 2014, it ranked number 1 on Forbes Global 2000 list of World’s Biggest Public Companies, and number 1 in The Banker’s Top 1000 World Banks ranking – the first time ever for a Chinese bank.



Building resilience from within


Highlights from the opening session of the 2020 Conference

Source: M. Mitchell/IFPRI
IFPRI’s Shenggen Fan greets H.E. Hailemariam Dessalegn, Prime Minister of Ethiopia, before both deliver opening remarks.

“If the past is any guide, we will face a barrage of shocks, both natural and man‐made, in the coming years. In just the past five years, we have seen a major earthquake in Haiti; drought in the Horn of Africa; earthquake, tsunami, and nuclear crisis in Japan; and conflicts that have left millions of people homeless, maimed, or dead. And let us not forget the food price spikes of 2008 that have made the global food system more volatile since then… The IPCC recently published a new report confirming that humans are causing climate change and warning of further shocks to come.”

Shenggen Fan, Director General at IFPRI, began his introductory remarks by outlining some of the major challenges that threaten the food and nutrition security of the world’s poor and most vulnerable people. He and the other distinguished keynote speakers from the inaugural session then went on to share their reflections on what building resilience looks like within the context of agricultural development. Rather than merely helping people “bounce back” from the negative impacts of shocks, building resilience, they agreed, involved a more transformative process in which individuals, households, and communities become better-off than before the shocks occurred.



Defining resilience, of course, is just the starting point. Helping people become better off and more resilient to future shocks is the aim of myriad development efforts seeking to implement a resilience framework. To find such an example of people bouncing back stronger, several speakers pointed to the case of Ethiopia, which is subject to frequent drought, the most recent occurring in 2011. Though many worried about the possibility of another famine similar to the one that took place thirty years ago, such conditions never materialized.

What changed from the 1980s? Fan pointed to the country’s Productive Safety Net Programme (PSNP) and Risk Financing Mechanism as playing key roles in mitigating the most recent food security crisis. While the former initiative aims to better target benefits to most vulnerable people and provide them with predictable sources of income, the latter program’s flexibility allowed food assistance to be quickly scaled up and major food shortages were largely averted. Erastus Mwencha, Deputy Chairperson of the African Union Commission, observed that Ethiopia had “risen from the ashes” to become one of the most resilient and food secure nations in Africa. H.E. Hailemariam Dessalegn, Prime Minister of Ethiopia, underscored the government’s 15 percent allocation of its budget to agricultural development and food security− the highest percentage of any African nation− as a key component of the country’s resilience-building efforts.

Yet we must be careful not to attribute development successes to outside experts or processes. David Nabarro, United Nations Secretary-General Special Representative on Food Security and Nutrition, delivered his opening remarks via a video message, emphasizing that resilience is something that comes from within rather than without. If our resilience building efforts are to be successful, he argues, they must enable and empower people, societies, and institutions to strengthen their own livelihood systems and make them more resilient to shocks. Kanayo Nwanze, President of the International Fund for Agricultural Development (IFAD), drove this point home in stating that “development is not something that we do for people. Development is what people do for themselves. It must start and end from within. Our job is to facilitate the process.”


Speaker videos and summary notes


  • Rajul Pandya-Lorch, Head of the 2020 Vision Initiative and Chief of Staff, International Food Policy Research Institute (IFPRI), USA
    Text Remarks | Video
  • Shenggen Fan, Director General, International Food Policy Research Institute (IFPRI), USA
    Text Remarks | Video
  • H.E. Hailemariam Dessalegn, Prime Minister of Ethiopia
    Text Remark | Video
  • Kanayo Nwanze, President, International Fund for Agricultural Development (IFAD), Italy
    Text Remarks | Video
  • Ertharin Cousin, Executive Director, United Nations World Food Programme (WFP), Italy
    Text Remarks | Video
  • Fawzi Al-Sultan, Chair, Board of Trustees, International Food Policy Research Institute (IFPRI), Kuwait
    Text Remarks | Video
  • H.E. John Kufuor, Former President, Republic of Ghana, (video message)
  • Ban Ki-moon, Secretary-General, United Nations, USA (video message)
    Text Remarks | Video
  • David Nabarro, United Nations Secretary General Special Representative on Food Security and Nutrition, Switzerland, (video message)
    Text Remarks | Video
  • Rajiv Shah, Administrator, United States Agency for International Development (USAID), USA (video message)
    Text Remarks | Video

Sourced here   http://www.ifpri.org/blog/building-resilience-within




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