17 March 2015 News Round-Up


Ethiopia: Oil marketer plans $5 bn refinery construction

File photo©ReutersEthiopia’s leading private oil marketer plans to build a $5 billion refinery within ten years to meet the growing demand for refined products in a region experiencing fast economic growth.

A refinery could compete with imports from India, the Gulf and beyond, and also help African countries extract more value from their own oil discoveries.

Eastern Africa is the latest frontier in the global hydrocarbon hunt after gas discoveries off Tanzania and Mozambique and oil finds in Uganda and Kenya.

Tadesse Tilahun, the chief executive of National Oil Ethiopia, said the final decision to build a refinery producing between 200,000 to 300,000 barrels per day was yet to be taken.

“It is a firm plan because oil demand is growing in Ethiopia… about 10 percent each year from the annual consumption of 3 million cubic metres and in the next 10 years we expect that to double,” he told Reuters at an African oil refining conference in Cape Town.

“I would assume in the next 10 years we should have the refinery on the ground,” he said.

National Oil’s shareholders include Saudi billionaire Mohammed Hussein Al Amoudi, whose investment portfolio in construction, gold, hotels and energy has helped amass an estimated fortune of over $10 billion, according to Forbes.

Tadesse did not mention where the funds to build the refinery would come from but has previously said other private and public investors would need to come on board.

Ethiopia has becoming one of Africa’s fastest-growing economies, spurred by hefty state-led investment that has kept the economy of Africa’s second most populous nation growing at more than 8 percent a year for over a decade.

Kenya, Tanzania and Uganda have experienced an average economic growth rate of about 5 percent in recent years.

Tadesse said National Oil, which also runs cement factories in Ethiopia, plans to almost double its coal imports to 500,000 tonnes a year from South Africa by 2017 to generate power for the cement-making plants.

Coal is used as an energy source in cement production, with about 200 kg of coal need to produce one tonne of cement, according to the World Coal Association.



The remarkable growth of Ethiopian Airlines – “The New Spirit of Africa”


The remarkable growth of Ethiopian Airlines - "The New Spirit of Africa”Addis Ababa: March 17, 2015 –

Ethiopian Airlines’ slogan “The New Spirit of Africa” is a clear indication of what it dreams to be in Africa.

Ethiopian, which started operating after the Second World War has become the largest airline in Africa in 2013 based on revenue and profit according to IATA.

With a modern fleet consisting of modern Boeing and Bombardier aircraft such as the B737NG, B777, B787 and Q400NG, Ethiopian Airlines is not only profitable, but also one of the most innovative African airlines.

Thanks to its modern fleet, the African airline is expanding its global network, with more routes to Europe, North- and South-America, Asia and the Middle East. Ethiopian’s fleet has already more than doubled in size over the last five years.

Ethiopian Airlines was the first airline in Africa and only the third airline worldwide to receive the ultramodern aircraft of Boeing787 in 2012. By January 2015, Ethiopian Airlines received eleven Dreamliners with two more on order and plans to possibly order more in the near future.

Ethiopian has already become the largest airline in Africa based on fleet size that pledges the flagship carrier to expand its network in 2015, enabling it to widen the gap with other leading African carriers. Ethiopian currently has orders for ‘next generation’ aircraft including 20-30 737 MAX 8s, 14 A350s, three 737-800s, two 787-8s, two 777-300ERs and two 777Fs.

On several measures, Ethiopian has quickly emerged as Africa’s leading airline. Perhaps most significant is the group’s still evolving role in setting up joint ventures throughout Africa, ASKY Airlines based in Lomé, Togo (West Africa) is the best example of this. Ethiopian’s willingness to develop aviation across the continent is noteworthy particularly given that other major African carriers have been unsuccessful over the years with similar pursuits.

Ethiopian also has been the exception in the African airline industry from a financial perspective. Despite external threats that could not be anticipated or directly managed, such as the global economic malaise, the Ebola outbreak, and currency fluctuations, Ethiopian managed to sustain its leading position in Africa. It has reported successive profits in all its existence, while most other large African carriers have been in the red.

Ethiopian continues its business growth, both in terms of capacity on offer and traffic carried. Capacity measured in Available Seat Kilometres (ASK), has shown a positive growth for the past five years.

Ethiopian is one of the only four airlines in Africa with over 5 million annual passengers. Fuelled by 15% year over year growth, Ethiopian carried 6 million passengers in FY2014 compared to only 3.7 million five years ago.

Africa has the potential to be a significant force in aviation on the back of robust economic growth forecasts, with Africa having among the fastest growing economies worldwide. Demand for air transport has increased steadily over the past years with passenger numbers and freight traffic growing significantly.

African aviation needs to grow at double digit rates to be a significant player in the global industry. Therefore it is critical that Ethiopian stay agile as it grow.

Moving forward, we will continue to focus on our long-term goals to attain our Vision 2025 to become the leading Aviation Group in Africa. This is why Ethiopian continues to invest heavily in new technology and initiatives to enhance our product offering and customer experience.



Ethiopia key partner to Argentina: Minister


Addis Ababa, 17 March 2015 –

Ethiopia as an emerging economy is our key partner among African countries. It was so remarked by Argentina’s Deputy Foreign Minister Eduardo Zuaín.

In an exclusive interview with The Ethiopian Herald, Eduardo said: “In the context of the overall growth of the continent, Ethiopia is a key country for us. Learning of Ethiopia’s key role of leadership in Africa, Argentina wishes to strengthen even more the existing ties between the two countries.”

Moreover, the Minister said that the relationship between the two countries would serve as a bridge between Latin America and Africa. “We have South-South cooperation and my visit aims at strengthening the technical cooperation between the two countries,” he said. “This is the beginning and we are negotiating on the technical cooperation of transferring agricultural technologies.”

“We know that Ethiopia is striving to transform its agricultural economy to an industrial one. And in a bid to see that progress accelerated, and to help Ethiopia increase its agricultural production and to attain its food security, and generally to connect the agriculture with the industrialization process, our collaborative endeavour should be strengthened,” Zuaín said.

Our country used to export only primary products and the challenge in those times was to industrialize the products. It is the same challenge that Ethiopia is now facing. And we will be by the side of Ethiopia to go through the same path of development that we went through, the Minister added.

Expressing his hope, Zuain said: “The first thing that we want to transform is that the idea that it is possible to transform from the agricultural economy to an industrialized economy. As a country of more than 90 million, Ethiopia’s destiny should be industrialization. And I hope Ethiopia will achieve that.” Argentina also wishes to transfer its scientific experience to Ethiopia, he added.

Argentina also has lessons to draw from Ethiopia, the Minister said. Ethiopia is the first independent country in Africa, and the people are proud of their history and heritages, and they know how to play leadership role in the continent. “We want to play similar role in Latin America. We want to be leaders in our continent for its growth,” he said.

“As we also have a common vision of the world, we want to democratize the multilateral organs in the world, such as the IMF, and the UN. We want to take a very important role in this regard and that too is the common vision we have with Ethiopia,” Zuaín underscored.

Besides, the Minister said that Africa is a pillar of our foreign policies. For us Africa is not only the future, it is also our current partner. Africa is registering remarkable economic advancement.



Ethiopia’s First Fortified Wheat Will Improve Nutrition for Millions


A public-private partnership aims to end hunger and malnutrition in Africa



This month marks a watershed moment in nutrition and food security in Ethiopia: For the first time ever, local producers will begin fortifying wheat flour with the vitamins and minerals children need to develop and adults need to thrive.

This achievement was made possible by a public-private partnership that stretches from mills, universities and government agencies in Ethiopia to the world’s largest multinational food companies, facilitated by a U.S.-based nonprofit. 

Partners in Food Solutions (PFS) which, in partnership with TechnoServe and the U.S. Agency for International Development, connects employees at General Mills, Cargill, DSM and Bühler with high-potential food processors in five African countries, has worked with ASTCO, one of Ethiopia’s largest flour mills, to develop the technology and processes needed to fortify flour effectively and safely. Volunteer experts shared business and technical expertise with their Ethiopian counterparts through email, Skype, a proprietary web platform and occasional visits.

Other PFS volunteer experts have worked with more than 600 African food companies to improve food safety, packaging, processes, marketing and more to help them strengthen their businesses. In the end, this provides a sustainable route to affordable, nutritious, safe food for the local market and increases or sustains markets for the crops of smallholder farmers.

“The path to true food security in Africa isn’t simply more food aid,” said Jeff Dykstra, co-founder and CEO of Partners in Food Solutions. “The only sustainable way to end hunger is to strengthen the food supply chain. That’s why we’re focused on working with small and growing food processors.”

Chronic food insecurity and malnutrition are grave problems in Ethiopia, where two out of every five children suffer from stunting, which means a lack of critical nutrients has made them small for their age. Although the country’s economy is based largely on agriculture, millions of people require humanitarian assistance to survive. The availability of nutritious fortified wheat, a dietary staple in Ethiopia, is one step toward expanding access to nutritious food and reducing hunger.

In addition to ASTCO, about 150 wheat processors are receiving training or individualized assistance. The USAID helped fund the project, which PFS took on in partnership with the Africa-based organization TechnoServe and the African Alliance for Food Processing.

ASTCO and Partners in Food Solutions will celebrate the launch of its fortified flour at a ceremony in Addis Ababa on March 17, 2015.


About Partners in Food Solutions

Partners in Food Solutions (PFS) is a partnership that aggregates, mobilizes and remotely transfers employee expertise from world-class companies — General Mills, Cargill, Royal DSM and Bühler — to small and growing food companies in Africa. Its goals are to improve the ability of those companies to produce more high-quality, nutritious and safe food at affordable prices, and to increase market demand for crops from smallholder farmers. PFS collaborates closely with TechnoServe and the U.S. Agency for International Development (USAID).


About TechnoServe

TechnoServe is a nonprofit organization that works with enterprising people in the developing world to build competitive farms, businesses and industries. They develop business solutions to poverty by linking people to information, capital and markets. TechnoServe offers in-depth country knowledge and works in partnership with PFS and USAID to implement the AAIFP program.



Ireland Says Ready to Support Second Ethiopian Growth, Transformation Plan


irelandAddis Ababa March 16, 2015 –

The government of Ireland is ready to support the second Ethiopian Growth and Transformation Plan, Ireland’s Minister of State for Development, Trade Promotion and North-South Cooperation Sean Sherlock said.

This was disclosed while Foreign Affairs State Minister Birhane Gebrekiristos and Minister of State for Development, Trade Promotion and North-South Cooperation Sean Sherlock held talks in Addis Ababa today.

Sean Sherlock said we continue to celebrate the relationship between Ethiopia and Ireland and is ready to support Ethiopia.

State Minister Birhane on his part appreciated the support the Irish government has been extending to Ethiopia, adding that the two countries should strengthen their existing trade and investment relations. The activities Ireland companies have started undertaking in Ethiopia are encouraging and should be consolidated, he underlined.

The two countries have many areas of cooperation that enable them to work together, Birhane stated, adding that bilateral relations between them have been improving since the visit of Irish President Michael D. Higgins to Ethiopia last November. The commencement of Ethiopia Airlines’ direct flight from Addis Ababa to Dublin would create a wonderful opportunity not only to reach Ethiopia but also Africa, the state minister added.

Ireland has been donated 30 million Euros to Ethiopia every year out of the total 630 million Euro fund allotted to developing countries.



Ministry Revising Energy Policy


greenpowerAddis Ababa March 16, 2015 –

Minister of Water, Irrigation and Energy, Alemayehu Tegenu said the government is striving to provide affordable, reliable and secure energy for the society, and that is essential in building a modern economy.

According to him, the energy sector is experiencing rapid technological progress which was difficult to consider in the country’s previous policies. “Today we are dealing with technologies like modern bio-fuels, solar and wind power, smart grids, energy efficiency technologies and systems, which were too expensive to consider in our policies only a few years ago,” he explained.

Energy would play an important role for realizing the country’s goal of becoming a middle-income country by 2025, he pointed out. To emphasize energy efficiency and conservation in both demand and supply, to be consistent with the national vision of building a middle-income country, the need to transform infrastructural integration with other sectors, the need to maximize indigenous based market share in energy goods and services are among the rationales for revising energy policy, Alemayehu stated.

Senior Energy Analyst at the Ministry, Sahele Tamiru said on his part that the revision of energy policy is necessary to cope up with international energy development by maximizing indigenous renewable energy resources. The energy sector has been developing not only at a global level but also at national level, the analyst said, adding energy policy revision should therefore be undertaken to fit with the global technologies. The revised energy policy would help the government to prepare projects and programs that can ensure sustainable energy development of the country.

According to Sahele, different consultations have been held with regional representatives, university professional, officials, stakeholders and national private companies working in energy sector to collect inputs for the revision of the energy policy. World Bank, African Development Bank, African Union and European Union as well as development partners from America, Japan, German, England and France have taken part in the half-day workshop.



Start-up snapshot: Providing affordable solar energy solutions to rural Ethiopia



Start-up: EnVent, Ethiopia

Yoseph Berhane shows a farmer how to use one of his solar lamps.

Yoseph Berhane (41) is the founder and general manager of Eternum Energy Ventures (or EnVent), an Ethiopian for-profit business that provides affordable solar energy products and phone charging solutions to the rural and low-income market.

Originally founded as Dungo Energy Solutions in October 2012, EnVent has partnered with German social enterprise, Villageboom GmbH, which supplies them with solar lamps.

Berhane believes, given the right opportunity and funding, there are solutions that can address environmental issues in Africa and told How we made it in Africa how EnVent plans to be one of those solutions.

1. Give us your elevator pitch.

Eternum Energy Ventures is developing a small-scale solar energy project to help rural households solve their lighting and phone charging problems with high quality solar lanterns.

We use an innovative business model to provide portable, durable, low-cost and high-quality solar lamps for lighting and charging with a full support system that includes cash discounts and payment in instalments upon product purchase.

My venture uses “solar agents” who earn income from selling lamp to individuals.

2. How did you finance your start-up?

My social enterprise uses internal funds and is operating without external finance. Local banks are still not willing to finance such projects unless you are a big company.

I am willing to work with investors who want to provide start-up capital so my company can qualify for government loans, bank credit or other forms of financing.

3. If you were given US$1m to invest in your company now, where would it go?

The $1m would be used for importing, marketing and to meet short-term working capital needs of my solar lantern distribution project in Ethiopia, and at the same time improve the lives of at least one million people.

4. What risks does your business face?

The six main risks include:

– Difficulty in accessing finance. The private sector does not have financial incentives to bring quality products into the market.

– Difficulty in accessing foreign currency. It takes roughly six months to access a currency.

– Excessive loan collateral requirements. For instance, the World Bank has allocated $20m to be loaned to private renewable energy companies. According to the loan structure, the Development Bank of Ethiopia can lend me 70% of the capital needed if I have both 30% capital at hand, and show a bank guarantee for the 70% loan.

– Low-quality products in the market. The market is dominated by low-cost, low-quality products. The high initial cost of good quality solar lighting devices favour the continued prevalence of low-quality products in the market.

– Limited purchasing power of a large portion of off-grid lighting users. The inability of most ‘unelectrified’ households to pay the upfront costs of good quality products favours the continued prevalence of low quality products in the market.

– A lengthy and uncertain importing procedure. For instance, determination of the value of products is performed by customs officials, not by consulting the value indicated on shipping documents. As a result, the value assigned to products is often arbitrary. East African countries like Kenya and Tanzania offer VAT exemption on all solar products, which can be a big saving for a small company like ours.

5. What has been the biggest mistake you have made, and what have you learnt from it?

Before starting my social enterprise I never realised how many different ways there were to view and respond to the same problem. This has become especially clear while developing solar projects that work off-the-grid. Previously I thought a solar panel is just a solar panel. But each project has its own flavour and style in the way it uses solar power and works with communities.

Small-scale projects in solar energy make a critical contribution to protecting and improving the environment at community and local level. I believe there are ideas out there that can successfully address all environmental issues, but they need the opportunity to thrive and show others that new ideas are worth something. That’s the key to how we can innovate and move forward with the environment.



Ministry to Introduce New Financial Management Information System


ethiomoneyAddis Ababa March 16, 2015 –

A new Financial Management Information System (FMIS) will be introduced effective  the coming Ethiopian budget year, Ministry of Finance and Economic Development said.

The integrated Financial Management Information System would replace the previous Integrated Budget and Expenditure System (IBEX) which has served over the past 10 years. The new system is part of the Civil Service Reform, it was indicated.

The information system would create transparency and accountability, reduce limitations of the previous system, and fulfill international standards with unique features.

Project Head, Nega Temesgen told ENA that the system was tested in selected institution over the past four year.

The system would be implemented across the country during the next five year, he added.

In the next two years, the system would be introduced to 490 federal institutions, including universities./.

The system to be introduced by Oracle Company would create financial transparency and accountability as well as efficiency, the head pointed out.



Nyota Minerals Loss Widens As It Starts Review Of Ethiopia Business


nyotaLONDON – Mon, 16th Mar 2015

Nyota Minerals Ltd Monday reported a wider loss for the first half of its financial year owing to an impairment charge taken on its Northern Blocks property in Ethiopia and said it is undertaking a strategic review of its Ethiopian business.

The miner said it had anticipated the first few months of 2015 would result in the company advancing towards gold production from the Northern Blocks, but the Ethiopian government in January informed the company its alluvial mining licence application had been rejected, along with all other applications for mining activities along that part of the Abay River.

The decision means it is no longer possible for Nyota to become self-sustaining in terms of cashflow in the short-term based on its existing asset portfolio. As a result, it has undertaken a strategic review of its Ethiopian operations.

As a result of the rejection, Nyota booked total exceptional charges in the half year to the end of December of USD1.5 million, pushing its pretax loss to USD2.5 million from USD1.1 million a year earlier.

Shares in Nyota were trading flat at 0.075 pence on Monday.


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