09 March 2015 – Weekend News Wrap (UPDATED)


Ethiopia Beats Coffee Export Target with Higher Than Planned Revenue


Country gains 307.5 million dollars with an actual export of 73,227.9 tns while expecting 269 million dollars from 73,593.5 tns of coffee

The half fiscal year of 2014/15 saw a success in terms of achievement in the export of coffee although it leaves uncertainty in the future of the coffee market.

The country’s plan for the first six months of the budget year was to export 73,593.5tn of coffee and gain an income of 269 million dollars. The actual export was 73,227.9 tonnes, from which a higher than targeted revenue of 307.5 million dollars was gained.

“The gain from the export exceeds the plan because the international coffee price was better in the export period,” said Getahun Bikora, coffee marketing director at the Ministry of Trade (MoT).

This year’s plan of the Ministry is to export 235,950tn of coffee to gain 862.5 million dollars.

“The new coffee is yet to come to the market and it will increase the volume of the coffee that we export,” said Getahun.

At the beginning of the fiscal year 2014/15, Ethiopia, which supplies less than five percent of the world’s coffee, was said to benefit from the plague on the Brazilian coffee. The production of Brazil’s coffee was said to decrease significantly although it only decreased by five percent.

“We did not benefit from the coffee market as we expected when we heard of the Brazilian coffee issue although we have achieved our target,” Getahun said.

The performance of the coffee that is exported according to the plan is 99.5pc and the income performance shows a performance of 114.3pc. The seventh month export of coffee was planned to be 90,483tn while 79,365tn of coffee was exported, showing 88pc performance. The gain from the seventh month export was planned to be 330 million dollars while the amount gained was 339.4 million dollars, which is 102pc of the planned performance.

In the three weeks of the eighth month, 9,120tn was exported, bringing in an income of 42 million dollars.

Ethiopia expects to produce 461,620tns of coffee this year, of which it expects to export 239,950tns for 862.55 million dollars, showing an increase of 23.6pc in volume and 20pc in revenue from the previous year.

In 2013/14, the country planned to export up to 277,500tn but has done only 190,876tn with the planned revenue falling down from the planned one billion dollars to only 717 million dollars.

The international price of coffee has been declining since mid January. The international market price of coffee on February 3, 2015, per pound was 163.6 American cents and it dramatically fell down to 137.6 American cents per pound on March 3, 2015.

“The major thing we should do is to make the price of the Ethiopian Commodity Exchange (ECX) line up with that of the international market and craft a subsidizing policy to increase the amount of export,” said Getahun.

The international coffee price is yet expected to fall well up to 120 American cents a pound, which the Ministry sees as a future challenge in the coffee market as the international coffee market does not depend on fundamental issues of demand and supply but rather on the technical issues that govern the market. These issues could be political or such.

Ethiopia stands fifth in the world with a production of 379,500tn a year, having the world’s supply share of 4.5pc in 2012/13. Out of this, the amount Ethiopia exported was 3,134 bags, which amounts to 47.5pc (180,262tn) of the total production.

The other top producers of the world are Brazil with 34.46pc share of the total coffee with three million tones of production. Next comes Indonesia with 8.75pc share having 0.76 million tonnes, followed by Vietnam and Columbia having the world’s share of 7.99 and 7.17pc with 0.69 million tonnes and 0.62 million ton as the International Coffee Organization (ICO) data indicates.

The Ethiopian coffee lacks competitive advantage in the market as it has many constraints in the marketing and producing process as experts in the sector state. Lack of traceability, quality of production and its being challenged by illegal trade are said to affect the country’s benefit from the sector.



BCIMR, A Djibouti Bank, Opens Office in Ethiopia


The Bank represents about 60pc of the market share in Djibouti in teras of loans and deposits

BCIMR is a subsidiary of Bred Banque Populaire Group (BPCE group). The French banking group bought BCIMR from BNP Paribas in July 2007. BPCE owns 51pc of the bank whereas the Djibouti government has 33pc of the share and the remaining 16pc is owned by Yemeni bank. The Bank says in its website that it operates in all market segments such as personal, business, public sector and institutional, mainly in Djibouti, Somalia, Ethiopia, Eritrea, Sudan, Yemen, and UAE. BCIMR offers its customers loans and financing, deposit and cash management, payment, trade finance, local and international guarantees.

Specializing in Trade Finance, the BCIMR offers a wide range of services to banks that cover all banking operations related to the treatment of flows in relation to international trade, according to its website. The Bank gives services such as foreign exchange transactions, Letter of Credit (L/C), international guarantees, transfers and receptions of multi-funds (SWIFT, cheque, etc.). Currently, most of the private banks in Ethiopia are clients of BCIMR, according to Ahmed.

Ahmed Abdou Mohsein, the office representative in Ethiopia, says that most of the banks in Ethiopia have a correspondent banking relation with BCIMR. Among these banks are Abyssinia, Awash, Dashen and Wegagen. The representative office will help to communicate and manage delays and documents easily and quickly, said Atakilt Admasu, International Banking Director at Wegagen.

Furthermore, the office will also provide information and facilitate investment opportunities in Ethiopia for Djibouti investors as it advances its presence in Ethiopia, said Ahmed.

It took around three weeks to furnish and open the representative office, which is located along Africa Avenue in front DH-GEDA Tower, said Ahmed, who makes all the staff of the office together with a secretary. The office received its trade license in January 2015 from the Ministry of Trade. The representative office will help its clients to save their time and money, stated Ahmed. The Addis Abeba representative office will serve as an intermediate office where clients can communicate with the Bank without leaving the country, he explained.

The BCIMR represents an average of 60pc market share in Djibouti in terms of deposits and loans and 85% of signed commitments. It has funded large regional projects such as the electrical interconnection between Djibouti and Ethiopia in collaboration with the French Development Agency.



Addis Ababa, Ethiopia among Cities of the Future with a bright potential



Addis Ababa, 8 March 2015 –

According to the annual “Wealth Report” released by global real estate consultancy Knight Frank on March 5, Ethiopia’s capital is among four cities in the world dubbed as “Cities of the Future”, based on the wealth creation opportunities they will present in the future.

The report says, “The cities featured on this spread are not those about to be listed among the world’s top 10 or even top 20 most important cities. Indeed, none of them yet boasts any billionaire residents, according to data from Wealth Insight, but their Hgh-Net-Worth Individual HNWI (millionaire) and UHNWI (Ultra High Net Worth Individuals) populations are rising, and they are locations whose influence we believe is growing strongly at a regional level. Even if they are unlikely to be on the second-home list of most UHNWIs, they should certainly be on their radars in terms of the wealth creation opportunities they will present.
Addis Ababeans Excited about the Inauguration of the Light RailwayAfrica’s fastest-growing economy, Ethiopia, benefits from not only the political importance of Addis Ababa but also the 3.8% annual growth rate of the population within the capital. In addition to natural growth, there is vast rural urban migration, which planners predict combined could lead to the size of the city surging by 2040 to over 8.1 million.
Wealth creation has seen a near doubling of the population of HNWIs since 2007 to a little over 1,300, with one of the strongest forecast growth rates for the coming decade – with an expected expansion to 2,600 by 2024. The city is understandably witnessing severe growing pains, with public investment in transport including an overhead rail network, and construction dominating GDP growth. Relocation of existing residents to accommodate new infrastructure has caused severe stresses on some sectors of the city’s population.

africanunionaddisrea1The Great Ethiopian Renaissance dam under construction on the Blue Nile is Africa’s largest hydroelectric scheme and could provide energy security – a vital component for economic development.

With the presence of the African Union headquarters (pictured to right), and the headquarters of the United Nations Economic Commission for Africa, as well as a number of continental and international organizations, the city is commonly regarded as the political capital of Africa, lending a strong diplomatic and political edge to its growing economic strengths.



Credit Facilities Overlook Medium Enterprises in Ethiopia


The World Bank says, from the total number of medium Enterprises, only 1.9pc have access to loans


The World Bank (WB) group study on small and micro enterprises (SMEs), which was released on February 19, 2015 at Hilton hotel, indicates that medium enterprises are more credit constrained than micro and large enterprises in Ethiopia.

The findings of the study on demand side shows that SMEs in Ethiopia perform much worse than large firms, they are rejected for loans and more likely to avoid loan applications due to high collateral requirements, which is more severe in medium enterprises than micro enterprises.

The supply side of the study shows that medium enterprises are underserved by micro finance institutions, which cater to micro firms excluding medium firms. Large banks refuse to serve micro and medium firms for fear of lower returns and higher risks.

There is no a credit constraint at micro enterprises level because Micro finance institutions lend them. But after these micro enterprises are transformed into a middle level enterprise, reaching around 1.5 million Br capital, they are hindered from obtaining more capital for their larger projects because of their inability to meet the collateral requirements of banks, Abozench Negash, public relations officer of the Federal Micro and Small Enterprises Development Agency told Fortune.

At the same time, such middle level enterprises are unable to take credit from micro finance institutions due to the institution’s lesser capacity to render higher credit for middle level enterprises, Abozench said, adding that the agency had given emphasis to such constraints and is working with the Development Bank of Ethiopia for it to start access to credit for middle level enterprises.

Showing that in 2007/2008, 96 pc of all firms in Ethiopia’s industrial sector were micro and over half of all engaged persons were on microenterprises, the study conducted on 6,000 Ethiopian firms from 2000 to 2011 showed that large enterprises are the net job creators than medium firms. The findings from the demand side showed that in the manufacturing sector majority of paid employment is found in large enterprises.

According to the study, the reason preventing medium and micro enterprises from creating more jobs is financial constraint; credit constraint in Ethiopia is slightly higher than the Sub Saharan Africa average. The study showed that in 2012, 56 pc of the medium and micro enterprises in Ethiopia thought credit as their most important constraint than the average in Sub Saharan Africa which is 55 pc.

The banking sector in Ethiopia continues to be highly profitable and ranks higher than the Sub Saharan Africa average in profit. However, medium and medium enterprises lending in Ethiopia is on a lower side comprising only 7 pc of bank portfolio. The findings also showed that the manufacturing sector plays a limited role in overall Ethiopian economy comprising only 4.2 pc of GDP in 2012/13 and the service sector created nine times more jobs than the manufacturing sector during the period 2009/2011.

According to the findings, medium enterprises are rejected for loans, with only 1.9pc of them being able to access loans. The access rates by micro, medium and large firms are six percent, 20.5pc and 35.5pc, respectively. Fifty-seven percent of medium firms are fully credit constrained, a rate higher than in any other size group.

In 2011 among firms applying for a lone 57.3pc of the applications submitted by micro firms and 87.9pc applied by medium enterprises were rejected, the report showed.

The study recommended fostering medium and micro enterprise finance culture among banks and stakeholders, promoting innovation in financial products and lending technologies by providing incentives to commercial banks and promoting policies aimed at addressing the limitations of the current collateral regime based on accurate diagnosis of the insolvency of debtors among others to curb the financial constraint of small and micro enterprises.

The investigations and the recommendations of the research have a factual ground, however, the collateral constraints are only one among the multiple problems on the financing of medium enterprises as most of medium enterprises fail to fulfil the minimum credit requirements before reaching the collateral requirements, Eshetu Fantaye, chief executive officer of Bunna International Bank s.c, commented on the research.

SME agencies should support medium enterprises to fulfill the precredit application requirements such as credit history, tax clearances, organized financial statements, legal personality, project feasibility study and budget plan on which most medium enterprises fall short of achieving and attracting the hub of commercial banks, Eshetu added.



Netanyahu intervenes in Israel Chemicals crisis


Benjamin Netanyahu  picture: Reuters

The prime minister has instructed the Ministry of Finance to seek clarifications on alleged violations of the State’s golden share.


The Ministry of Finance is demanding that Israel Chemicals (TASE: ICL: NYSE: ICL) management provide clarifications about activities that apparently contravene the conditions of the government’s golden share. The allegations were first made yesterday by the heads of Israel Chemicals workers committees including at Bromine Compounds to Prime Minister Benjamin Netanyahu.
The workers committees assert that Israel Chemicals did not ask the state for permission to move its activities overseas even once over the past seven years, although, according to the workers committees, this is required under the golden share terms.This morning, Netanyahu spoke about the crisis at Israel Chemicals and said that he had instructed, “The Accountant General at the Ministry of Finance to undertake a broad examination of the issue and the company’s position on the terms of the golden share in light of the company’s actions in recent years and its investments in Israel, as well as its future work plans and the recent layoffs of employees.”Shortly afterwards, Ministry of Finance legal advisor Adv. Yoel Briss today sent a letter to Israel Chemicals (TASE: ICL: NYSE: ICL) CEO Stephan Borgas demanding information about the transfer overseas of the company’s activity and that of its subsidiaries. Among other things, Briss asked for information about the moving of production lines, marketing set-ups, assets essential to the existence of Israel Chemicals, know-how and technology, other substantial activity or the conducting of such activity, and the transfer of “key service factors.”



Israel Chemicals

Israel Chemicals talks break down


Briss is also asking whether the company plans to change the ratio between its activity in Israel, that of its subsidiaries, or that of the entire group to overseas activity.

Briss’s letter following an initial letter dated February 23 asking for information and explanations about the layoffs plan announced by Israel Chemicals. Today’s letter follows a series of assertions aimed at Prime Minister Benjamin Netanyahu concerning the breaching of the golden share terms raised yesterday by the workers committees at Israel Chemicals and at Bromine Compounds.

Israel Chemicals stated, “There is no connection between the state’s golden share in Israel Chemicals and regular management of the enterprises and the need for cutting costs at the company’s plants. The streamlining plan is designed to strengthen and safeguard the existing of the plant in Israel, while ensuring the company’s competitiveness against its major competitors in the global markets in which it operates.”


Also see:  Israel Chemicals faces new market reality


Combative atmosphere


The heads of Israel Chemicals workers committees attended a Likud activists meeting in Holon last night attended by many of the party’s leading activists. Dead Sea Works workers committee chairman Armand Lankri had been scheduled to take part in the major “change of government” rally in Tel Aviv organized by left-wing parties. Following Lankri’s change of plans there were allegations of political payback. Lankri who heads the Likud party in Dimona told “Globes” that he announced the cancellation of his participation in last night’s rally last Sunday after it became clear to him that the event would have a distinct political orientation. He said that contacts to set up a meeting with Netanyahu took place throughout last week. Lankri also stressed it was more important to meet Netanyahu because that was in the best interests of Israel Chemicals remployees.

The meeting with Netanyahu was also attended by Bromine Compounds workers committee chairman Avner Ben-Senior and Dimona Mayor Benny Biton and Minister of Energy Silvan Shalom. Netanyahu reportedly told those present that he would instruct the Ministry of Finance to send a letter today seeking clarifications about the golden share, and discuss the situation at Israel Chemicals at the start of today’s cabinet meeting.



Ethiopia’s Growing Economic Diplomacy



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 centre 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 and the Middle East 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 programme 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 programmes. 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 fora 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 Ethiopia Herald that this economic relations 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 labour, 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 labour, 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.



Addis Abeba Gets 100,000 cubic metres More of Water a Day

waterThe Addis Abeba Water and Sewerage Authority (AAWSA) Water and Sewerage Development and Rehabilitation Project office has completed and availed two ground water sources and expansion of Legedadi and Dire dams that are to be inaugurated on Sunday March 8, 2015.

The first of these projects is Akaki well field, which can generate 70,000 cubic meters of water a day. The project, undertaken with financial support of 1.8 billion Br from the Chinese ExIm bank, has a total of 24 water wells. The project also included 266.3Km of main line installation, 10.5Km distribution line installation, 25.8Km of collection lines. It also included construction of six water tankers that have the capacity of holding from 1,000 cubic meters of water to 5,000 cubic meters of water.

This project has enabled one million people to get adequate water supply by bringing 100,000 cubic meters of water into the system.

The project was contracted to CGC Overseas Construction Co. Ltd, a Chinese state owned Construction Company that has been involved in water and road works in Africa.

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

Recently, it was awarded a 220Km asphalt road construction that will stretch from Dire Dawa to Dewalle, for which it will be paid 3.99 billion Br.

The governmental Water Works Design & Control Enterprise did the supervision of the project.

The second project was the expansion of two previously used dams – Legedadi and Dire dams,increased their joint capacity by 30,000 cubic meters of water a day on their existing joint capacity of 165 cubic meters a day. It has benefitted 300,000 users.

“A recent study indicates that the current demand of the city is 670,000 cubic meters of water a day; our supply still stands at 498,000 cubic meters a day,” said Tesfalem Bayu, the Project Offices head.

Fourteen thousand cubic meters of water was let into the system from different pocket area wells that were constructed in places that could not benefit from the new expansions and projects, according to him. This happened because of the limitation of the scope of the new projects.

In order to overcome the disparity between the demand and supply of water in the city, the project office is processing other projects that can let additional water supply to the system.

One of these projects is Akaki water well, which is expected to be completed by June 2015. This project is expected to let 70,000 cubic meters of water into the system and currently, it has reached 96pc completion with the remaining works being electromechanical and network installation works, Tesfalem said.

Another project in Legedadi is also expected to join the system with 40,000 cubic meters of water a day within two months’ time and it is said to benefit up to 400,000 users. Twenty water wells will also be drilled in pocket areas in the short run.

As a long-term plan, the project office is working on the study and design of Legedadi phase two, which will generate 86,000 cubic meters of water by itself.

Gerbi and Sibilu dams are also parts of the plan that can generate 73,000 cubic meters and 428 cubic meters of water a day, respectively. The former is said to take three years for construction and the latter four to five years.

In order to solve the distribution and quality problems, the office has established a customer forum that meets four times a year and discusses the problems thoroughly. The workers are also given phones through which the customers can notify problems related to cuts which allow the workers go to the place and fix any problems.

“Regarding the quality issue, the water that we let into the network contains chlorine so that it can be able to resist any contamination,” said Fekadu Zeleke, AAWSA’s water supply and distribution deputy manager. “We are also working on having high powered generators to avoid water cuts in case of electricity shortage.”

The projects that are completed are set to be inaugurated by Prime Minister Hailemariam Dessalegn.



Ethiopia: $95m water supply system inaugurated



Ethiopia has inaugurated a $95 million deep well water supply system capable of producing 70 thousand cubic meters of water per day for the capital Addis Ababa.

Financed by the EXIM bank of China, the Akaki water supply system would boost the city’s potable water supply to 464 thousand cubic meters which satisfies 70 percent of the over four million residents of the city.

The water system is meant to pump clean water to additional 700 thousand residents of the city where clean water shortage was the case for long time.

“We are embarking into industrial development and industrialization and we need necessary infrastructure that suits to our industrial fast growth and I think water is one of the infrastructure”, said the country’s prime minster Hailemariam Desalegn on Sunday while inaugurating one of the grand water projects.

Launched in 2005, the water system project has 26 water wells.

Chinese company, CGCOC carried out the water project which was completed ahead of schedule.

At present, clean water demand in Addis Ababa has increased to 670 thousand cubic meters per day and the high demand is caused by reconstruction activities, growing population and infrastructure development across the city.

With another water project to be inaugurated in two weeks time, the Addis Ababa Water and Sewerage Authority would increase the total water supply to the city to 504 thousand cubic meters.



Generating power to transform Ethiopia


When completed, the Grand Ethiopian Renaissance Dam will eventually generate 6000MW of electricity.


The basis of any country’s economic prospects is energy. Does it have adequate power supplies to fuel growth?

In the case of Federal Democratic Republic of Ethiopia, no effort is being spared to slash the current electricity deficit and ensure a surplus that will sustain investment and domestic consumer demand long into the future. The present 2000MW supply does not reflect the vast bounty available.  Only 35% of the population has access to grid power.

In the government’s Growth and Transformation Plan (GTP), there is a high emphasis on hydropower resource development, but with an eye also on renewable sources such as solar, wind and geothermal given their cost competitiveness.

Power generation improved by around 230% between 2008 and 2012, with six hydroelectric and wind power projects coming online. These were Tekeze (2009, hydroelectric, 300 MW), Gibe II (2010, hydroelectric, 420 MW), Tana Beles (2010, hydroelectric, 460 MW), Amerti Nesha (2011, hydroelectric, 97 MW), Ashegoda (2012, wind, 30 MW), and Adama I (2012, wind, 51 MW).

It cannot be repeated enough, but Ethiopia has enormous potential for hydro-power and geothermal energy generation. This is crucial for industrialization of the country.  Several studies have so far been carried out to estimate Ethiopia’s potential and to develop short, medium and long-term investment plans for the power sector. The government is in the process of implementation.

According to the five-year GTP, the country’s installed electricity generating capacity is expected to reach 10,000MW 2014/15 financial year. By this time, electricity coverage is expected to reach 75%.

The centerpiece today is the $4.7 billion Grand Ethiopian Renaissance Dam (GERD) which is being paid for by Ethiopians themselves. Formerly known as the Millennium Dam, it is being constructed in the Benishangul-Gumuz region of Ethiopia, on the Blue Nile River, about 40km east of Sudan. The project is owned by Ethiopian Electric Power Corporation (EEPCO) and ultimately will deliver 6000MW.

GERD is expected to be completed by July 2017 and will not only serve Ethiopia, but Sudan and Egypt as well. Both countries depend on the Nile River for their water although 85% of the river flows in Ethiopia.

The dam’s construction is expected to create up to 12,000 jobs. Approximately 20,000 people will be resettled during the course of the project.

The reservoir and dam will offer major benefits to Ethiopia, Egypt and Sudan. Egypt has for a long time held the major ownership of the water from the Nile River and prevented Ethiopia from constructing a dam. Egypt depends on the Nile for 90% of its water needs.

The main and saddle dams will also create reservoirs with an impounding capacity of 74 billion cubic metres. The regulated flow of water from the dam will improve agriculture and the impact from evaporation of water from the dam will be minimal compared with other dams in Ethiopia, which will help in water conservation.

A tripartite committee was formed in January 2012 to promote understanding and look into the benefits and impacts the project would have on the three countries.

Abundance of water resources, means that Ethiopia will become the top regional power distributor within the next the 15 years or so.

Potential hydro-power generation is estimated at 45,000MW while geothermal sources will add another 5000MW. The country is also suitable for exploiting renewable alternatives like solar and wind, particularly in the rural areas.

Closely associated with electricity, is the need to guarantee safe water supplies.

Ethiopia has huge run-off and ground water potential. However, it currently utilizes only a small portion.

Access to safe potable water in urban areas was 81.3% in 2012/13. Access in the rural areas was about 66.5%  during the safe period. The overall average of access to potable water supply was 68.45% in 2013/13.

A huge project deemed to satisfy safe water demand in the towns and rural areas was launched by the country’s first five year development plan. Accordingly, the national access to potable water supply is expected to be 98% by the end of 2014/15.



Kessem Irrigation project 99% complete


Kessem Irrigation project 99% completeAddis Ababa: March 9, 2015 –

The 2.6 billion Birr irrigation project of Kessem is 99% complete and has started operations, resident engineer of the project Jegsa Deyisa stated.

The dam built on tributaries of the River Awash will have the capacity to store 500 million meter cubic water when completed. So far sugar cane spread across 5,000 hectare of land has been cultivated and by June this figure will rise to 20,000 hectares.

It took a decade to develop the project due to harshness of the environment and a rise in financing the project.

The dam’s main gate and fencing will be finalized this fiscal year to complete the project.

The dam was constructed by Water Works Construction.



Adama II wind farm to be completed in June


Adama II wind farm to be completed in JuneAdama Mar 07, 2015 –

The Adama II wind farm that will generate 153mw power from wind will be fully completed this Ethiopian fiscal year, project official said.

Of the total 77 turbines installed so far, 20, each with a capacity of 1.5mw, have started to generate electricity, resident engineer, Tahgot EndeMariam told ENA.

Installation of 24 turbines will be completed and the farm will fully start power generation in June, he said.

Construction of the project, launched in 2005E.C, has reached 90 percent.

Three of turbines of the project, which will have 102 turbines started to generate electricity on trial basis in October 2014.

Thirteen- km transmission lines connected the project with a 230kv grid through the Koka substation, which is close to the major industrial centers of Adama, Mojo, Debre Zeit, Dukem and Addis Ababa.

The Adama II project is an extension of the Adama I wind farm, with an installed generating capacity of 51mw power.

The project would enable industries in Adama town and its environs get reliable power supply.

In spite of its potential to generate power from wind, the nation has managed so far to generate 171mw power from Adama I and Ashegoda wind farms with installed capacity of 51mw and 120mw respectively.

Up on completion, the 345 million USD project being underway in Adama town, 98km east of Addis Ababa, will increase the country’s power generation capacity from wind to 324mw.



METEC manufacturing railcars for Ethiopia’s railways


METEC manufacturing railcars for Ethiopia’s railways


Addis Ababa Mar 07, 2015 –

The Metals and Engineering Corporation (METEC) announced that it has started production of railcars aiming to substitute them locally.

The locomotive industry under the corporation has commenced the manufacturing of the railcars after finalizing the design and the prototype, Major Nigusu Solomon, head of the locomotive industry told ENA.

The trial of the prototype lasted for four years, he said.

The plan of the industry is to substitute railcars the nation would import to operate on the railway lines the nation has been building to connect with neighboring countries, he added

As the country is building cross-country railway lines that link it with neighboring countries, importing railcars is unavoidable.

It is the plan of the corporation to produce the cars locally and help the nation the foreign currency it would spend on them.

By locally manufacturing the railcars, the nation will save foreign currency, create link among small and medium industries, and create more jobs.

He said the trains are designed to travel 160 km per hour and transport up to 1,300 persons.

In order to meet the demand for railcars, the corporation is working to construct another locomotive manufacturing industry in Dire Dawa, the Eastern part of the country.

Construction of the plant which will be erected on 70 hectares land will be launched within two months, he said.



One out of Five Enterprises Draws Interest in latest privatization Endeavour

 crowncorkAfter failing to privatize five public enterprises during the past half fiscal year, Privatization & Public Enterprise Supervising Agency (PPESA) has now been able to get an interest for the government’s share in the Ethiopian Crown Cork & Can Manufacturing Industry S.C. (ECCCMI), with an offer price of 206.2 million Br.

Crown Cork has 75pc of government share in it, with the remaining privately held.

The Agency had a financial opening on March 5, 2015, three state enterprises, including ECCCMI, Agricultural Mechanization Services Enterprise, and Bilito Siraro Farm. There were Bahir Dar Textile S.C. and Kombolcha Textile S.C. on offer, but cork was the only to get any offer.

The company that offered to purchase ECCCMI is called Fairfax Africa Fund Llc. It is a U.S. based investment firm. This is the same company that was participating in a tender to provide Enterprise Resource Planning (ERP) for Ethiopian in 2009 with Zemedeneh Negatu, Managing Partner of Transaction Advisory Service at Ernst & Young, working as a point man for the company.

The company had shown its interest to purchase the share of Crown Cork and as per this interest, it submitted its proposal to the board that was assigned by the agency to look after such cases.

“According to their proposal, they insisted to be treated as a local company so they make their payment as per the payment procedures set for local investors,” said Aseb Kebede, vice head of public relations office at PPESA.

As far as the transfer of public enterprises is concerned, the Agency has a precondition for domestic and foreign companies, which bid for the enterprises. For local companies, PPESA requires 35pc down payment and the remaining within five years, while foreign companies pay a 50pc down payment, and the rest within three years.

Ethiopia fits the high growth potential that Fairfax Africa Fund is looking for, especially in agro industry and manufacturing, which is the reason for its offer for the Crown Cork & Can Manufacturing Company, according to an email David Johns, Director of Fairfax African Fund, sent to Fortune.

“Our bid for Crown Cork includes a group of Ethiopians as partners and therefore we submitted the bid as a joint foreign Fairfax and Ethiopian investors’ partnership with Fairfax Africa Fund as the main bidder, according to statement sent to Fortune via email.

“For now, we have been helping them in facilitating and advising on matters related to the tender,” Zemedneh told Fortune.

If the company has become successful in acquiring to purchase Crown, we will have a stake in their investment.

According to Zemednhe, Fairfax African fund will spend up to 500 million Br, including the offered price to expand and reestablish the company.

The Agency’s board will soon make a decision on their proposal, said Aseb told Fortune.

During the first half year, it was reported that the PPESA lost the expected revenue of 1.3 billion Br from the transfer of enterprises to private holders; though the period was marked with a profit of 398.4 million Br profit from 27 public enterprises that are under its administration.

The Agency made 7.6 billion Br from the sale of goods and services from the 27 enterprises that it manages, down from a target of 8.6 billion Br. In addition, it has managed to make 17.3 million dollars from export from five of the enterprises under it.



Entrepreneurs awarded for positive impact on economy, environment


Entrepreneurs awarded for positive impact on economy, environmentAddis Ababa  March 06, 2015 –

The United Nation Development Program (UNDP) awarded six Ethiopian entrepreneurs said to sustain positive impact on the economy, community, environment, and society.

The winners awarded with money amounting from 5,000 to 20,000 USD.

The entrepreneurs get the award in entrepreneur of the year, environmental sustainability, young female and male entrepreneur, rural entrepreneur, small and medium enterprise entrepreneur of the year.

Prime Minister Hailemariam Desalegn said his government understands the important role entrepreneurs could play in the development of the country.

The Ethiopian development cannot be achieved only through foreign direct investment, but also with the participation of entrepreneurs, he added.

Entrepreneurship Development Program (EDP) launched two years ago in partnership with the UNDP with the aim of supporting entrepreneurs is among the initiatives of the government towards encouraging enterprises, he said.

Micro and small enterprises are not only viable ways to create massive job opportunities, but also drivers of industrial development in the country, Hailemariam said.

Micro and small enterprises are an alternative mechanism to create jobs for the growing number of the young population and graduates of higher learning institutes.

UNDP Resident Representative Eugene Owusu for his part said his organization is supporting Ethiopia’s efforts to strengthen micro and small enterprises.

The UNDP supports Ethiopia through EDP to help guide and mentor entrepreneurs through the various stages of enterprise development and growth.

Through the EDP entrepreneurs are provided with technical assistance in the preparation and review of feasibility and business plans, facilitates access to finance, and assists them in identifying local subcontracting opportunities between micro and small enterprises with larger local companies.

The program, EDP, has benefited over 12,000 entrepreneurs across the country, of which 40 percent are women, he said.

He said now there is a good opportunity for Ethiopian entrepreneurs as the economy is booming and opportunities are flourishing.

“It is an exciting time to be an Ethiopian entrepreneur. This country is on the move, with fast-paced growth. Around corner lies a business opportunity and daily we are seeing new enterprises take root and flourish”, he said.


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