.
Ethiopia to issue international bond
.
Ethiopia announced its plan to issue international bond at the end of this year, the first of its kind move by the country to join the international capital market.
The announcement came following the sovereign credit ratings given to the country by three top international rating agencies last May.
Ethiopia had secured a credit rating from Standard & Poor’s and Fitch assigned a rating of “B” to the country’s sovereign treasury bonds, while Moody’s gave a “B1″ (B+).
“On the basis of the ratings, the government of Ethiopia has decided to issue a 10-year international bond and access international capital market,” Sofian Ahmed, Finance and Economic Development Minister told journalist today.
“The bond sale would serve as a potential means for the government to know the risk premium,” he said. This, according to him, will help Ethiopian business to access international capital markets by providing a benchmark for risk assessment.
He further said that the fund to be obtained from the sale of bond would be utilized to finance infrastructure projects.
All the necessary preparations have been done to issue the bond, including selection of world top banks that will issue the bond on behalf of the Ethiopian government, he said.
An agreement would be signed soon with three banks to issue the bonds. Hiring of International law firms that provide legal advice is also underway, he added.
Asked about devaluation of Ethiopian birr, Sofian said, “The government has no intention to devaluate birr. There is no economic reason to devaluate birr. Ethiopia’s economy is now stable.
http://www.waltainfo.com/index.php/explore/15305–ethiopia-to-issue-international-bond
.
Dangote Industries (Ethiopia) Ltd., Muger, Ethiopia
.
%20Ltd.,%20Ethiopia%204.jpg)
Dangote Cement PLC has commenced project works of US$ 400 Million green field cement plant of 2.5 million tons/ annum capacity at Muger in Ethiopia. Mobilization of men and machinery is done and project execution is underway in full pace. The Plant is scheduled to be commissioned by the Q1 of 2015.
Dangote Cement’s foray into Ethiopia in the Oromia region close to Addis Ababa, comes at a time when the Horn of Africa nation is grappling with a severe cement deficit amidst rising demand as a result of substantial investments in infrastructure like roads, dams, bridges and railways. Currently, Cement demand in Ethiopia is around 7 to 8 MTPA, while production stands at 2.4 MTPA forcing the nation to import the deficit for several years. Over the next five years, demand is expected to soar to 13.8 MTPA, while local supply will reach 8 MTPA when existing manufacturers complete the upgrading of their factories. This provides Dangote Cement an ideal investment opportunity to bridge the deficit and consolidate its operations.
Key Features
Name of the Plant : Dangote Industries (Ethiopia) Plc, Muger, Ethiopia
Capacity : 2.5 million tons/annum
Raw Material Sources
Limestone : Muger Mines
Shale : Muger Mines
Red Soil : Muger Mines
Gypsum : Muger Mines
Power Source : 1 x 30 MW Coal Based Captive Power Plant
Fuel Source : Coal, LPFO
Cement Packing : 3 Roto Packers of 2400 Bags/hr Capacity
Cement Loading : Auto Loading of 8 Trucks simultaneously
http://dangcem.com/index.php?page=98
.
European businesses plead for urgent improvement in business licensing, taxation
.
Ahmed Shide
.
“We are here to listen to you and make swift improvements,” Ahmed Shide, MoFED
The European Union Business Forum Ethiopia (EUBFE) pleaded for an urgent improvement of the business climate in Ethiopia on Thursday during an event held at Addis Ababa Hilton.
“We are here to listen to you and to act accordingly.” Ahmed Shide, State Minster, Finance and Economic Development (MoFED) assured that the government would undertake swift improvements on the implementation of policies.
The occasion that drew a number of EU ambassadors, members of the business community, international business consultants, and experts showed a direct structural dialogue with the Government of Ethiopia. “Despite the ongoing construction and infrastructure boom in the country, we the EU business community need to get a comprehensive business climate that is easy, efficient and flexible,” an EU investor said.
Barbara Plinkert, Charged Affair of the EU Delegation in Ethiopia said that EUBFE has been in continuing direct dialogue with the government of Ethiopia to realize a favorable business environment.
The Ethiopian Revenues and Customs Authority (ERCA) and the Ministry of Industry (MoI) repeatedly reacted on the wider range of showcases obtained from an independent legal expert. Impediments identified in the survey conducted in the ERCA and MoI revealed the obstacles and failures that have halted investment with the EU members and other foreign companies. “The survey could show us some of loopholes, but I think we are seeing encouraging progress,” Nuredin Mohamed, Trade Inspection and Regulatory, director and advisor to the state minister of MoI said.
Nebyou Samuel, deputy director of ERCA on his part said that implementing the laws and best practices enshrined in the Authority’s mandate significantly solves all the indicated obstacles. “We have to accept part of the shortcomings, but implementing the laws will relive our customers’ burden,” he said. According to Semaw Nigatu, a legal expert, some of the problems he enumerated were a shortage of foreign currency, inconsistency with the institutions, rigidity of rules, lengthy registration, and renewal of licenses. “We absolutely consider the EU a very important partner for trade and investment so we will work hard on our weaknesses,” Ahmed said. The state minister wrapped up the government’s response for the criticism his government received from the conference.
With a membership of 13 different countries, a steering committee of 12 members – supported by a permanent executive secretary – EUBFE’s inception was realized in May 2012 to foster the trade and investment between the two sides. “We are encouraged by the feedback from government officials who really took the points very seriously,” Chris De Muynck, Chairman of the EUBFE said.
Prime Minister Hailemariam Desalegn confirmed that his government greatly seeks more trade and investment links with the EU during his meeting with Jose Emanuel Barosso, EU commissioner as he hailed the 300 companies of EU members sates have already engaged in agro-processing and horticulture investments in Ethiopia. According to government officials, EU companies’ investments are estimated at 80 billion birr. International consultants and representatives of the regional economic block also indicated some of the principal factors missing in Ethiopia’s business environment. “We would like to see Ethiopia moving forward in its economic growth with the help of attractive business climate since it covers 25 percent of the Common Market for East and Southern Africa (COMESA),” Theirry Mutombo, director, investment promotion and private sector for COMESA, said.
.
Ethiopia, Switzerland Sign Memorandum of Understanding
.
Ethiopia and Switzerland signed on Monday, October 06, 2014 a memorandum of understanding that strengthens their bilateral relations.
The memorandum of understanding was signed by Foreign Affairs State Minister Ambassador Berhane Gebrekristos and Yves Rossier, Swiss State Secretary for Foreign Affairs.
According to Ambassador Berhane, the MoU would help the countries collaborate on political issues at bilateral and international forums.
Switzerland would also provide training on federalism and extend technical assistance in science and technology as well as other spheres, it was learned.
Switzerland State Secretary for Foreign Affairs, Yves Rossier, expressed his appreciation for the role Ethiopia is playing in the Intergovernmental Authority Development (IGAD).
”The strength of IGAD is only the strength of its member states and the role of Ethiopia is determinant,” he said.
Rossier added that the agreement helps the two countries to work closely in various issues.
Ethiopia and Switzerland are expected to sign agreements in economic and technical areas soon, it was learned.
.
Ethiopia’s economy shows 10.1 per cent growth
.
President Mulatu Teshome said Ethiopian economy has shown a 10.1 per cent growth on average during the past four-year implementation period of the Growth and Transformation Plan (GTP).
The President made the remark here today while opening the fifth term joint session of the House of Peoples’ Representative (HPR) and the House of Federation (HoF).
He further said the county managed to register 10.3 percent growth last Ethiopian fiscal year. He also predicted the economy to show 11.4 percent growth this budget year.
According to President Mulatu, agricultural productivity grew by 21.7 quintals per hectare on average, while tax revenue has surge by 17.6 per cent.
More than 18,800 kebeles (districts) have become beneficiaries of telecom services, thereby attaining 96 per cent of the target set out in the Growth and Transformation Plan (GTP), he said.
He further said that more than 26 million people have participated in the watershed development and natural resource conservation activities carried out across the country
The mega project being carried out in the country has created jobs for 2.7 million people, he said.
The president also told the parliament about the activities to be carried out in this budget year.
He said efforts would be made to maintain the single digit rates of inflation as well as improve education quality in this budget year.
He said the government is doing to solve the current power interruption and alleviate problems facing the manufacturing industry sector.
Efforts would also be made to make the upcoming general election fair, free and participatory, he noted.
He said the country would consolidate its efforts to bring about durable peace in the region, especially in Somalia and South Sudan.
http://www.waltainfo.com/index.php/editors-pick/15307-ethiopias-economy-shows-101-per-cent-growth-
.
Rwanda seeking 400MW electricity from Ethiopia
.
Faced with a high cost of energy, Rwanda is planning to import 400MW of electricity from Ethiopia in the medium term.
Kigali is exploring other avenues that will enable it achieve its ambitious second Economic Development and Poverty Reduction Strategy (EDPRS II) target of 70 per cent access rate to energy and an electricity generation capacity of 563MW by 2017.
For it to achieve its desired access rate, the government is planning to supply 1.7 million customers with electricity. Currently, the country’s total energy generation stands at 119MW.
Rwanda has designed a five-year electricity strategic plan in which it projects to deliver about 232MW of hydropower, 310MW geothermal power and 300MW from methane gas, as well as strengthen and expand transmission lines by an additional 2,100km.
Hydropower projects in the pipeline include Rusumo falls, Rusizi III and Nyabarongo II.
However, because most of them are in their infancy, the rising demand for energy will partly be met through significant energy imports, which is cheaper than generating energy from costly thermal projects.
Currently, 50 per cent of Rwanda’s energy is generated via thermal means which is expensive largely due to fuel costs.
Fuel – in particular diesel and heavy fuel oils – account for approximately 40 per cent of the country’s 119MW installed energy capacity. Hydropower accounts for 59 per cent and methane gas 1 per cent.
Last year, for example, the energy sector requested the government for $46.7 million for buying fuel to be used in thermal power generation but received only half the amount.
This cost is passed on to consumers; hence Rwandans pay higher per unit cost for power than their neighbours in the region.
Rwanda’s current generation portfolio stands at $0.24/kWh compared with Kenya’s $0.15/kWh, Uganda’s $0.17/kWh and Tanzania’s $0.05/kWh.
Rwanda’s energy deficit is hampering its plan to achieve a middle income status by 2020 by empowering the private sector.
As part of plans to boost its capacity, Rwanda has signed a memorandum of understanding with Ethiopia.
However, the expression of interest is not a guarantee that the flow of electricity from Ethiopia will be immediate, as Rwanda must first sort out infrastructure and regulatory challenges.
.
Kessem to commence sugar production
.
Kessem will commence production by the coming December, according to general manager of Kessem sugar development project.
The factory is under construction in Afar Regional State, 50 kilometers far from Metehara sugar factory.
“The factory is now 90 per cent complete and it will begin trial production after three months,” Kaba Merga, general manager of Kessem sugar development project told WIC.
The factory is being built mainly by Complant Group Inc., a Chinese construction and engineering company, he said.
Two Chinese sub-contractors and SATCON Construction Plc, a domestic construction firm, are also participating in the construction activities of the factory, he noted.
He said based on the agreement signed between Ethiopian Sugar Corporation and Amibara Agriculture Development P.L.C, the latter is developing sugarcane on 6,000 hectares of land.
The Corporation and Amibara Agricultural Development plc signed an out-grower agreement on March, 2014, – the latter to develop sugarcane on 6,000 hectares of land and supply it for the factory.
Kessem sugar development project itself is developing sugarcane on 1,800 hectares of land, he noted.
Factory division deputy general manager at Kessem sugar development project, Worku Chekol, on his part said the factory will use improved sugarcane crushers and modern technology to alleviate contamination.
Pastoralists, who were benefited from the villagization program carried out in connection with the sugar development project, are currently engaged in crop production, it was noted.
Kessem sugar development project is part of the government’s drive to increase the country’s sugar production capacity to 2.25 million tons during the Growth and Transformation Plan (GTP) period.
http://www.waltainfo.com/index.php/explore/15280-kessem-to-commence-sugar-production-
.
Chinese company plans to produce gas by 2018
.
- Prepares bid documents
The Chinese company that acquired the Calub and Hilala gas fields in eastern Ethiopia, POLY GCL Petroleum Investment Limited, this week announced that it plans to start extracting natural gas from the gas fields by 2018.
On November 16, 2013, the Ethiopian Ministry of Mines and POLY GCL Petroleum Investment Limited signed petroleum exploration and development agreements in Addis Ababa.
The agreement enables Poly GCL to develop the Calub and Hilala gas fields found in the Ogaden basin in Eastern Ethiopia. The agreement also allows Poly GCL to prospect for oil and gas in Blocks 3&4, 11&15, 12&16, 17&20 exploration blocks in the Ogaden basin.
According to Li Wei, general manager of Poly GCL, since signing the PSA, Poly GCL organized a competent project team and set up a management system in accordance with international petroleum industry practice. “We have submitted the 2014 work program and budget, finished the comprehensive geology and geophysical study, signed the contract with a company to begin the Environment Impact Assessment (EIA) study,” Wei told The Reporter via email.
According to Wei, Poly GCL is in the process to hire a company that would undertake a seismic survey and drill exploration wells for additional discovery. “We are preparing bidding documents for seismic and drilling work tender,” Wei said.
According to the current plan, the first stage of the project will produce around 3 million tons of LNGs (Liquefied Natural Gas) annually and is expected to go into production in 2018. According to the exploration and development plan, 4 billion cubic meters of natural gas will be produced each year from Calub and Hilala block and option is to transport the gas northward through a pipeline of 800 km long to Djibouti port and finally market the products in the international market.
As to the figure of total investments, the company said it can only be estimated after certain exploration work and the completion of the Master Development Plan.
“Empirically, we have started both the exploration and construction work, for instances, the site survey, the bidding process for different packages, the Preliminary Front End Engineering Design (Pre-FEED) studies, the renovation and construction of the camp site, etc.”
The company said it is planning to start the seismic acquisition of exploration in 2015 and the construction and the installation for surface engineering in 2016.
The Calub gas field was first discovered by an American oil company, Tenneco, in 1972. The Hilala gas field was discovered by Soviet Petroleum Exploration Expedition (SPEE) in the 1980s. The total gas reserve is estimated at 116 billion cubic meters. (4TCF). Eight gas production wells were made ready for production by Zhongyuan Petroleum Exploration Bureau (ZPEP), a Chinese petroleum exploration company.
.
Ethiopia Main Beneficiary of Hotels Forum
.
Left to right Wayne Trouhton, CEO of HTI Consulting, Michael Wale of the Star Wood Hotels, Simon Vincent, from Hilton World Wide, Wolf gang from Rezidor Hotel, Oliver Jacques of the Mangalis Hotel Group, and Jean-Jacques of the Accor Hotel Group on the discussion of Africa’s hotel market.
.
If the third African Hotel Investment Forum (AHIF) has proved propitious for any of the participating countries, one might well earmark Ethiopia. The burgeoning nation now has the prospect of seeing its international hotel brands growing to 10, with the signing of six agreements between international hotel management groups and Ethiopian real estate owners.
Playing a major role in all of these agreements was Calibra Hospitality Consultancy & Business Plc, whose managing partner, Yonas Moges, remembers an international company moving a conference four years ago from Ethiopia, where it was intended to take place, to Dubai, because it wanted to find a hotel able to accommodate all 500 of its guests. The two international standard hotels at the time, Hilton and Sheraton, had 100 rooms each.
“This forced them to change the meeting to Dubai,” he said.
The AHIF was officially launched on Tuesday, September 30, 2014, at the Sheraton Addis Hotel, by Prime Minister Hailemariam Dessalegn. It drew 500 participants, including international branded hotels, consultancy firms and hotel developers, from around the world.
The Forum, organised by Bench Events, was intended to take place at the Intercontinental Hotel in Nairobi Kenya, but, ironically, had to be moved to Addis Abeba because of space limitations. It had more than 37 sponsors, including ACCOR, Carlson Rezidor Hotel Group, Hilton Worldwide, Mangalis Hotel Group, Marriott International, InterContinental Hotels Group (IHG), Starwood Hotels & Resorts International and the Wyndham Hotel Group. The event is organised at a time when Addis Abeba has only three internationally-branded hotels in business – Sheraton Addis, Hilton Addis and Radisson Blu – with 869 rooms. These numbers pale in comparison to some major African countries, such as Nigeria and Morocco, with 40 and 29 international hotels, respectively, with 6,514 and 4,828 rooms, according to data from World Hospitality Group. Egypt has 21 such hotels, according to Yonas.
However, tourist flows to Ethiopia continue along an upwards trajectory, reaching 724,000 during the 2013/14 fiscal year – a 12pc growth. It is, however, still lagging behind Kenya’s 1.5 million tourists and Tanzania’s 1.2 million.
Prime Minister Hailemariam, in his speech at the Forum, said that his government was aware of the problems and had set up the Tourism Transformation Council, which he chairs, with 16 members, including ministers, regional state presidents and industry stakeholders.
.
Haile Gebresillasie, Olympic gold medalist and hotel owner (left) explaining about Ethiopian hotel industry for Patric Fizgibbon, senior vice president development, Europe and Africa of the Hilton World Wide (right), and Yonas Moges, managing partner of Calibra Hotel Hospitality & consultancy business.
.
The shortage of international hotels in Africa, especially Ethiopia, where diplomats are coming for African Union (AU) and United Nations (UN) conferences, is what is driving the development of such hotels, according to David Tarsh, managing director of Tarsh Consulting and head of media at the AHIF. Addis Abeba stands at third position globally with 118 diplomatic missions, following Brussels with 185 and Washington with 176.
The two-day forum, which attracted 115 hotel development investors, with half of the 500 participants from Africa – mainly Kenya, South Africa, Nigeria and Ethiopia – saw a flurry of talks and deals among stakeholders, with several hotel groups signing deals with counterparts in Ghana, Nigeria and Uganda, in addition to Ethiopia, in the days before, during and after the Forum. At the conference venue itself, a management agreement was signed between the Wyndham Hotel Group’s Ramada Brand and Ethiopia’s ADM Business Plc for the development of a four star hotel, with 136 rooms. It was also announced that Radisun Blu, of the Mangalis Hotel Group, had agreed to sign contracts with two businesses from Uganda and Ghana.
The other cooperation agreement signed during the event was between World Hotels, which has 500 hotels worldwide, and the African Azalai Hotels Group, with 20 hotels.
There were six agreements in all for international hotel brands in Ethiopia. Marriott has had a deal with Sunshine Construction for the past four years, and their hotel, located on Cameroun Street, is expected to begin operations in 2015. The latest deals, however – signed between Saturday, September 27,2014 and Tuesday, September 30, 2014 – included Aschalew Belay Hotel Projects and the Louvre Hotel Groups to open the Golden Tulip Addis; Tsemex and Intercontinental Hotels Group to open the Crowne Plazza Addis; Wyndham Hotel Group and ADM Business Plc for the Ramada Addis Hotel; Accor Hotel Group with Enyi General Business for the Pullman Addis Hotel and Best Western International with Great Abyssinia Plc and Noah Real Estate for the Best Western Plus and Best Western hotels. All these hotels are expected to be opened between 2015 and 2017, with the next year seeing Crowne Plaza-Marriott and Ramada Addis coming into business. Last on the list will be Pullman Addis in 2017.
“All of these deals are taking place in Africa at this time because the economic tourism growth of Africa is four percent, while it is just 2.5 percent on other continents,” said Tarsh.
According to data obtained from the Ministry of Finance & Economic Development (MoFED), the contribution of tourism in income revenue to Ethiopia’s economy has increased over the last three years – from 17 billion Br in 2010/11, to 18.7 billion Br and 22.2 billion Br, respectively, over the next two years.
Investors want to invest their money where the returns are high, and in countries where there are efficient local partners to work with; this attracts international hotels to come and invest in Ethiopia, said Trash. However, David Grossnikalus, Starwood Hotels representative, operating with 1,200 hotels in 100 countries, including the Sheraton, feels that architectural designs in Ethiopia fail to meet the standards of international hotels.
On the other hand, inbound tourist arrivals and planned events and conferences are growing faster than the supply of international standard hotels and accommodation in Addis Abeba, with the gap expected to widen, according to a 2011 study by Awash International Bank. Awash estimates that the gap will increase from 1.3 million hotel nights in 2015 to 3.1 million in 2020, the research use the number of the rooms for all sample years is same with the 2011.
Amin Abdulkadir, Minister of Culture & Tourism, says that the Tourism Transformation Council, Ethiopian Tourism Board and the Ethiopian Tourism Organisation will solve all problems in the sector starting from the next fiscal year, citing as evidence that his ministry will finally be able to implement the long awaited hotel standardisation by the end of this fiscal year. He also believes that graduates from government training institutions will address the lack of skilled human resources.
“Within the coming two years, international branded hotels will be common in Ethiopia,” said Tarsh. “So, the old hotels should be refurnished, relaunched and reflagged, in order to balance the hotel development of the country.”
So far, three additional international brand hotels will join the Ethiopian sector soon and make the total number six, along with the Hilton, Sheraton and Radison Blu. The management companies who have signed agreements to join the sector are the Marriott, Golden Tulip Addis Abeba and Crowne Plaza Addis.
In addition to the 209-room Courtyard by Marriott Addis Abeba, opening in 2016, there will also be a 104-unit Marriott Executive Apartments Addis Ababa, opening in 2015.
The government is ready to amend policies that are bottlenecked for the development of the whole tourism value chain, creating problems related to customs and logistics, said Solomon Tadesse, chief executive officer (CEO) of the Ethiopian Tourism Association.
http://addisfortune.net/columns/ethiopia-main-beneficiary-of-hotels-forum/
.
Credit Suisse delays USD 1.4 bln loan for railway project
.
Credit Suisse, a syndicate of banks and Export Credit Agencies, has delayed a USD 1.4 billion loan, which it has agreed to extend to the Government of Ethiopia for the financing of the Awash-Woldiya railway project, due to the Environment Impact Assessment (EIA) report, The Reporter learnt.
According to reliable sources approached by The Reporter, the reason that prompted the bank to withhold the anticipated loan is in connection with the impact assessment that was carried out and submitted by the Ethiopian Railways Corporation (ERC) that is said to have failed to meet the Equator Principles up on which the bank considers it as a guiding principle for evaluating EIA. Equator Principles is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects and is primarily intended to provide a minimum standard for due diligence to support responsible risk decision-making.
The Corporation has been planning to build the second longest railway line in the country that stretches from Awash to Woldiya/Hara Gebeya passing through Kombolcha town. The planned 447-km-long railway also includes an underground tunnel which is some 25 KM long.
Credit Suisse had hired Pricewaterhousecooper (PwC) as its main consulting firm with a responsibility of reviewing and evaluating the EIA conducted by the corporation.
This railway project, which is estimated to cost of some USD 1.7 billion, demands a strict EIA, already undertaken by a couple of companies in four lots. The findings of the impact assessment was provided to Credit Suisse earlier and was expected to draw the required project finance under long-term loaning scheme.
The Equator Principles and the International Finance Corporation (IFC) Performance Standards are crucial requirements set by the bank to meet the issues raised in the EIA. From a total of 37 subheadings that are expected to be met under the Equator Principles the EIA have failed in 17 subheadings, according to sources.
Meanwhile, sources said that if the concerns raised in the EIA could be rectified then the Corporation would be able to get the financing for the project.
However, Dereje Tefera, communications directorate director at the ERC, denied the report and claimed that the loan has already been secured.
However, The Reporter has learnt that the required loan, which was expected from the Turkish EX-IM Bank has not been earmarked until last week. Ethiopian Foreign Minister Tedros Adhanom (PhD), who was in New York last week to attend the 69th UN General Assembly, twitted from from the Big Apple that he had a “fruitful” meeting with his Turkish counterpart and discuss on possible ways of securing the loan.
The Ethiopian government awarded the turnkey project to a Turkish company – Yapi Merkezi – two years ago while the Turkish EX-IM Bank agreed to lend some USD 300 million.
However, an official of the Ethiopian Railways Corporation, who requested anonymity, told The Reporter that the project may commence this week. Asked about the source of finance the official declined to comment on the issue.
The project connects the northern and eastern economic and traffic corridors of Ethiopia and provides a vital link to Addis Ababa and the Djibouti Port – the main import and export terminal for the region. The railway will connect the lines from Mekele to Hara Gebeya and then Addis to Djibouti.
.
Filed under: Ag Related, Economy, Infrastructure Developments, News Round-up Tagged: Addis Ababa, Business, Economic growth, Ethiopia, Ethiopian government, Investment, Millennium Development Goals, Sub-Saharan Africa, tag1 
