AfDB Allocates $3bn To Africa’s Power Sector
Posted on July 3, 2013
VENTURES AFRICA – The African Development Bank (AfDB) on Tuesday said it has earmarked up to $3 billion for Africa’s power sector over the next 5 years.
AfDB President, Donald Kaberuka, speaking from Dar Es Salaam, said the bank’s interventions will include investment loans, reforms, advisory and guarantees in the energy sector.
This is part of the bank’s backing for President Barack Obama’s $7 billion Power Africa plan which Obama unveiled on Saturday in Cape Town, South Africa.
The US-led power plan will pay more attention to advancing more access to power in Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania.
Blue chip companies including General Electric and Symbion Power will also invest an additional $9 billion.
Kaberuka said AfDB will increase investments in energy production, transmission and distribution infrastructure, cross-border power pools and regulatory reforms.
The bank will also move to fast track reforms in national power firms, many of which are desperately in need of better “business models and financial reinforcement.”
“Reforms are the key,” Kaberuka said. “The billions of dollars available for investment in the energy sector will translate into actual bulbs in people’s homes and electricity necessary to grow small businesses if state utilities run efficiently and effectively. The policy reforms will facilitate and enhance cross-border energy markets.”
The money will come from the Africa Development Fund (ADF), a unit of the AfDB.
Malaysian Firm, Gro Energy To Build $800m Ammonia Chemical Factory In Tanzania
Posted on July 3, 2013
VENTURES AFRICA – Malaysia’s chemicals firm Huchems Fine Chemicals in partnership with Tanzania’s Gro Energy and Infotech Investments are set to inject $800 million in East Africa’s first ammonia-based chemical making factory.
This comes shortly after vast wells of natural gas have been found in Tanzania which had far-reaching implications for the economy of the country.
AfricaEconomicOutlook.org states that Tanzania’s economy has continued to record strong export growth and the country’s medium-term growth prospects are around 7 percent, boosted by natural gas discoveries.
“The plant will be located in Tanzania and will utilise the country’s abundant natural gas resources. The parties expect to conclude a final agreement before the end of 2013,” Reuters quoted the companies as having said in a joint statement.
According to Reuters, Tanzania, which is the second-biggest economy in East Africa, has predicted that it has 41.7 trillion cubic feet (tcf) of recoverable natural gas stocks in its belly.
“The investment can contribute to the socioeconomic development of Tanzania … while also contributing to the growth of the agricultural sector throughout east Africa by being a regional producer of fertiliser,” GyuSung Choi, CEO of Huchems Fine Chemical Corporation and Huchems Malaysia, said.
This is also one of Tanzania’s projects aimed at creating long term employment for its citizens in chemical and fertiliser plants in the south.
Ethiopia, Botswana, Dominican Republic Improve Food Security
July 3, 2013 (WIC) – Ethiopia, Botswana and the Dominican Republic made the largest gains in food security in the past year, according to a new report.
Increases in income and food availability in developing countries drove the largest improvements in this year’s Global Food Security Index, published by the Economist Intelligence Unit. Botswana ranked number 43 out of 107 countries studied. But most of sub-Saharan Africa scored low. Even with this year’s gains, Ethiopia is number 90.
Meanwhile, economic losses in Greece and Ukraine pushed those countries down the index.
Democratic reform and political stability were linked to improvements in food security in Burma and Sri Lanka, while conflict pushed Mali, Yemen and Syria down the index.
According to VOA, The index comprises 27 measures of food affordability, availability and quality. It is funded by the seed and chemical company DuPont.
IMF says gov’t policies boosting economic growth in Ethiopia
July 3, 2013 (WIC) – International Monetary Fund (IMF) on Tuesday said government policies have been playing key role in registering ongoing economic growth and sustaining it in Ethiopia.
IMF special envoy Kal Wajid made the remark after holding talks with Prime Minister Hailemariam Desalegn in Addis Ababa. The IMF envoy said this year’s economic growth of Ethiopia is estimated to seven percent while the Ethiopian government says over 11 percent growth is expected.
Policies and strategies set by the Ethiopian government are registering results, he said. The envoy, however, suggested the need to give due attention to the private sector, especially in facilitating supports such as bank loans.
According to ERTA, Prime Minister Hailemariam for his part said his government would give the necessary attention to the private sector so that it can play its role in the development of the nation, particularly by advancing infrastructure.
Saudi Cargo plans meat exports from Ethiopia
A Saudi Arabian company, Saudi Cargo, has announced plans to start transporting meat from Ethiopia to Europe by the end of this year. Saudi Cargo has selected five Ethiopian exporters for this, after evaluating their performance in exporting meat to Saudi Arabia. The Ethiopian companies selected are: Hashim Nuru Slaughter, Luna Expert Slaughter House, Modjo Modern Export, Elfora Agro Industry and Export and Organic Abattoir Slaughter. Saudi Cargo started transporting meat from Ethiopia five years ago and it is now looking to expand, according to Kassahun Kenna, Sales Manager with Saudi Cargo. The President of the Ethiopian Meat Exporters Association, Tamrat Ejigu, said the deal would act as an incentive for exporters and contribute to development in Ethiopia.
A new trade partnership between the US and the East African Community
President Obama announced the launch of a new partnership between the United States and Sub-Saharan Africa on Monday (July 1st). Trade Africa is designed to increase internal and regional trade in Africa and expand trade and economic ties between Africa, the United States, and other global markets. The initiative will initially focus on the member states of the East African Community (Burundi, Kenya, Rwanda, Tanzania, and Uganda) where the region’s GDP has quadrupled in the last decade. It aims to double intra-regional trade in the EAC and increase EAC exports to the United States by 40 percent as well as improve trade links in the area. The United States also hopes to expand its collaboration with other regional economic communities in Africa. Increasing trade between the United States and Africa will be the focus of the next African Growth and Opportunity Act (AGOA) Forum being held in Addis Ababa, August 9th – 13th. The Forum came into force in 2000, and the next meeting will help pave the way to AGOA’s renewal before 2015.
Ethiopian pockets record profit despite temporary grounding of Boeing 787
July 2, 2013 (WIC) – Chief Executive Officer of Ethiopian Airlines Tewolde Gebremariam said Ethiopian has pocketed a record profit despite the temporary grounding of its Boeing 787 Dreamliner planes, according to Associated Press.
Tewolde said Monday that Ethiopian is expecting a record profit with 20 to 25 percent growth in revenue and number of passengers. He said Ethiopian Air would have been even more profitable, if it had not been for the grounding of its four 787 planes for more than three months.
In January the U.S. Federal Aviation Administration grounded the aircraft after incidents with smoldering batteries on two different planes.
Ethiopian Air is seeking to be compensated by Boeing and has already notified the airplane manufacturer of the financial loss it incurred due to the grounding, the CEO said.
In a related news the Export-Import Bank of the United States (Ex-Im Bank) has authorized nearly 130 million USD in financing to support the export of Boeing long-range aircraft.
According to ENA, Ex-Im Bank Chairman Fred P. Hochberg announced the transaction in Addis Ababa.
Hochberg is in Ethiopia conducting meetings with government and business leaders as part of a week-long business development trip to India, Ethiopia and South Africa. Ethiopian, the leading airlines in Africa, has 75 international destinations.
Ethiopia working in collaboration with int’l orgs on climate
July 2, 2013 (WIC) – Water and Energy Minister Alemayehu Tegenu said the Ethiopian government has a longstanding cooperation with international organizations and is also involved in the process of the UN Framework on Climate Change and Intergovernmental Panel on Climate Change at all levels.
Speaking at the opening of the 4th Lead Authors’ meeting of Working Group III of an Intergovernmental Panel on Climate Change here on Monday, Alemayehu said the country is working in collaboration with international organizations with regard to the issue.
The government has had adequate lessons in relation to the impact of climatic extremes, he said, adding, Ethiopia has developed and started to execute a lot of local, regional and national development plans that are mostly climate resilient.
Alemayehu said the government’s five-year Growth and Transformation Plan and Climate Resilient Green Economy, which stipulate to build zero carbon emission economy by 2025, clearly underpin climate change and related issues into consideration.
He said the government has widely undertaken multipurpose water dams along the major river catchments of the country, hydropower generation, solar energy and wind turbines, which are among the top recommended sources of renewable energy, are widely considered as the main source of energy in Ethiopia.
The government also considers the importance of community-based forest and valley development programs for swift environmental protection and ultimately for soil conservation as part of the climate change mitigation strategies being implemented in Ethiopia.
The government is committed to implement the agreement reached by conferences of parties in line with the provision of Intergovernmental Panel on Climate Change (IPCC’s) climate change monitoring and adaptation, he said.
The Minister recalled that the late PM Meles Zenawi had played unforgettable role as the lead negotiator of Africa on climate change in every stage of regional and international climate change conferences.
UN Under-Secretary-General and Executive Secretary of ECA Carlos Lopes on the occasion said climate is an important resource in African economies. It is also major hazard and has the potential to negatively impact the lives and livelihoods of resource dependent communities.
According to ENA, the climate system in Africa is poorly understood. The impacts of climate variability and change take their toll on economic development and socio-ecological resilience.
Understanding climate risks and threats is the first step towards reducing vulnerability to climate related hazards, Lopes said.
Ethiopia working with stakeholders on climate change
July 2, 2013 (WIC) – Water and Energy Minister Alemayehu Tegenu said the Ethiopian government has a longstanding cooperation with international organizations and is also involved in the process of the UN Framework on Climate Change and Intergovernmental Panel on Climate Change at all levels. Speaking at the opening of the 4th Lead Authors’ meeting of Working Group III of an Intergovernmental Panel on Climate Change here on Monday, Alemayehu said the country is working in collaboration with international organizations with regard to the issue.
The government has had adequate lessons in relation to the impact of climatic extremes, he said, adding, Ethiopia has developed and started to execute a lot of local, regional and national development plans that are mostly climate resilient. Alemayehu said the government’s five-year Growth and Transformation Plan and Climate Resilient Green Economy, which stipulate to build zero carbon emission economy by 2025, clearly underpins climate change and related issues into consideration.
He said the government has widely undertaken multipurpose water dams along the major river catchments of the country, hydropower generation, solar energy and wind turbines, which are among the top recommended sources of renewable energy, are widely considered as the main source of energy in Ethiopia. The government also considers the importance of community-based forest and valley development programs for swift environmental protection and ultimately for soil conservation as part of the climate change mitigation strategies being implemented in Ethiopia.
The government is committed to implement the agreement reached by conferences of parties in line with the provision of Intergovernmental Panel on Climate Change (IPCC’s) climate change monitoring and adaptation, he said. The Minister recalled that the late PM Meles Zenawi had played unforgettable role as the lead negotiator of Africa on climate change in every stage of regional and international climate change conferences.
UN Under-Secretary-General and Executive Secretary of ECA Carlos Lopes on the occasion said climate is an important resource in African economies. It is also major hazard and has the potential to negatively impact the lives and livelihoods of resource dependent communities. The climate system in Africa is poorly understood. The impacts of climate variability and change take their toll on economic development and socio-ecological resilience. Understanding climate risks and threats is the first step towards reducing vulnerability to climate related hazards, Lopes said.
Ethiopian commences new flights to South America
July 2, 2013 (WIC) – Ethiopian Airlines, the fastest growing airline in Africa, announce d that it has added South America, the fifth continent in its route network, with the launching of new services to Sao Paulo and Rio de Janeiro, Brazil as of Monday – July 1, 2013.
The inaugural flight to these destinations is operated using Ethiopian B787 Dreamliner, the most technologically advanced commercial aircraft offering unparalleled on-board comfort to passengers with high ceiling, the biggest windows in the sky, greatly reduced noise, unique lighting system and higher level of humidity. Ethiopian flight to Brazil is operated through its second hub in Lomé, Togo, three times a week. The addition of Sao Paulo and Rio de Janeiro will bring the number of its international destinations across five continents to 75. The flights will be the only connection between West Africa and Brazil.
Ethiopian and its partner airline in West Africa, ASKY, coordinate their schedules to give short, seamless and convenient connections to West Africa passengers travelling to and from Brazil. Brazil has one of the fastest growing economies and the fifth largest in the world. Sao Paulo is the biggest city in the country and the southern hemisphere. It is the economic and financial hub of the country, hosting the headquarters of numerous major corporations.
Rio de Janeiro, its second largest city, is the most visited city in the southern hemisphere and is known for its natural beauty, beaches and carnivals. It is also home to the famous statue of Christ the Redeemer, which is listed as one of the New Seven Wonders of the World.
“We are very pleased to announce to our customers that Ethiopian is spreading its wings to South America. The China-India-Africa-Brazil trade lane is the fastest growing in the world. Our new Brazil flights will provide efficient connections with 28 weekly flights to 4 destinations in China, 14 weekly flights to the 2 major cities in India, daily flights to Lebanon, five weekly flights to Tel Aviv and almost daily flights to 45 cities across Africa. The various communities throughout the world with strong ties to Brazil will be able to enjoy smooth and convenient connections. Our customers on this new route will also enjoy the unique cabin products and features of the global technology leader aircraft, the 787 Dreamliner.” said CEO Tewolde Gebremariam.
FM Tedros holds discussion with Saudi investor
July 2, 2013 (WIC) – Ethiopian Minister of Foreign Affairs Dr. Tedros Adhanom has held discussion with Najib S. Al-Huwaidi , a prominent Saudi investor, in Saudi Arabia. Tedros went to Saudi after concluding his visit to Algeria.
Najib, who owns a company called Yemen Export Office, expressed his interest to invest in Ethiopia, in banana farming and other areas of investment for international market. He said: “Ethiopia’s bananas are of good quality and have high market value.” Najib, who is Ethiopian by birth, also told Dr. Tedros that a number of Saudi investors are eyeing Ethiopia as an interesting investment destination.
Dr Tedros welcomed the suggestions and invited Najib to consider other potential investments in Ethiopia. Najib said he appreciated the efforts of the Ethiopian government and promised to come to Ethiopia and bring other potential investors with him after the upcoming Ramadan fasting.
Nicon to open electric bike assembly
Nicon plc, an Ethiopian cargo company, has announced plans to start making electric bicycles in Ethiopia.
The company has secured land for an assembly plant at a cost of 10 million birr and says it will start producing Ethiopian-made bikes within a year. It recently started importing the zero carbon-emission bicycles from China and has sold 100 in less than a month. “There is huge market demand, so we have decided to start assembling the bikes here. Meanwhile, we will expand our import volume,” said Wondwossen Mengistu, Nicon Chief Executive Officer. The company recently held talks with the Ethiopian Environmental Protection Authority (EEPA), the World Bank, Ethiopian Transport and Communications Authority (ETCA) and Traffic Police. Nicon used the talks to introduce its electric bicycle and explain its minimal environmental impact. “The product shall contribute to the various efforts undertaken to solve the transportation problem, which is evident and of great concern in major cities of the country, especially Addis,” said Wondwossen. The electric bicycle can carry a load of 150 kg and can travel 80 kilometres at 35 kph, once it has been charged for four hours.
South Sudan launches modern business and investment city
The government of South Sudan has officially launched the construction of a Juba Specialized Economic Zone (SEZ), an industrial area for business and investment activities. The 625 square km land, located about 30km from the South Sudan capital, Juba, will reportedly be used for building a new modern city, mainly for large businesses that will boost the young nation’s economy.
While speaking at the ground-breaking ceremony held in Jokukweboma, the country’s commerce, industry and investment Minister, Garang Diing Akuong, said the creation of the SEZ indicates the desire and determination of South Sudan’s Central Equatorial state to encourage and promote investments and economic development in the state.
“The specialized Economic Zone is indeed in line with the policy of the government of the Republic of South Sudan, which promotes National and Foreign Direct Investment (FDI) in South Sudan,” said Akuong, who represented President Kiir at the occasion.
The FDI investment inflow, the Minister added, will not happen if there are no clear investment policies at national or state levels.
“..nevertheless, provisions of these kind of infrastructure and availability of others, such as tax incentives, non-tariff barriers, power, roads, access to finance etc, will pave the way for more investments to consider South Sudan as one of the best investment destinations in the region, if not the world,” he stressed.
The Minister further said South Sudan, with its rich natural resources, needs to diversify in order to enhance economic growth and reduce too much dependency on other countries.
The establishment of SEZ will provide an opportunity for small and medium-sized enterprises (SMEs) and their linkage to large-scale enterprises and to seize this opportunity for their development and expansion, the Minister added.
(Sudan Tribune)
Obama to Unveil Broad African Electrical Power Initiative
Pointing to Africa’s crippling lack of electrical power, President Barack Obama is due to announce on Sunday a $7 billion initiative over five years to double access to power in sub-Saharan Africa.
“We see this as the next phase in our development strategy and a real focal point in the president’s agenda going forward,” deputy national security adviser Ben Rhodes told reporters traveling with the president.
Obama is midway through a three-country tour of Africa and is due to give what aides bill as his fullest description of his vision for the U.S. relationship with the continent on Sunday.
SIGNATURE PROGRAM
Obama has been faulted for lacking a grand program to benefit Africa like the HIV/AIDS initiative launched by President George W. Bush or the broad reductions of trade barriers achieved by President Bill Clinton.
The president’s aides say he has been held back by the need to wind down two wars and to right the U.S. economy after the worst economic downturn since the Great Depression.
Despite severe U.S. budget constraints, the power initiative could provide Obama with just such a signature program.
DARKNESS BY NIGHT
Experts agree that the lack of electricity is a tremendous hindrance to Africa’s advancement.
“Africa is largely a continent of darkness by night,” said an official at a multilateral agency who spoke on condition of anonymity. “Every which way you look at this, Africa is behind the curve and pays more.”
Roughly two-thirds of sub-Saharan Africa lacks power, a level that rises as high as 85 percent in rural areas, White House aide Gayle Smith said.
Lack of power inhibits business investment, prevents children from studying after dark, and makes it harder to keep vaccines from spoiling in rural areas, she said.
The United States will initially work with Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania to develop electric power generation, officials said. It will also cooperate with Uganda and Mozambique on oil and gas management.
The program will draw on a range of U.S. government agencies to achieve its goals. For example, the U.S. Overseas Private Investment Corp will commit as much as $1.5 billion in finance and insurance to help U.S. companies manage the risks associated with the projects.
Similarly, the U.S. Export-Import Bank will make up to $5 billion available to support U.S. exports to develop power projects, the officials said.
The private sector will also be involved. Officials said General Electric Co has committed to power generation projects in Tanzania and Ghana, officials added.
The president’s trip has taken him to Senegal and South Africa and will wind up in Tanzania on Monday and Tuesday. Although concerns over the ailing health of anti-apartheid hero Mandela have overshadowed much of the trip, the president has sounded the theme of Africa’s economic potential at every stop.
In keeping with that emphasis, Obama will also announce that he plans to hold a summit of sub-Saharan African leaders in Washington next year.
“It’s something other countries have done,” Rhodes said. “What we want to do is continue the kind of high-level engagement we’ve had on this trip.”
[Reuters]
Lifan Motors Moves Home
The Chinese car company hopes to soon become the leading car assembler in East Africa
By YETNEBERK TADELE
Lifan Motors Plc, the Ethiopian subsidiary of its Chinese namesake, is moving to the Eastern Industrial Zone, located in Dukem town, with the 1.4 million dollar acquisition of a 33,000sqm facility, to be used as a complete knock down car assembly plant; the facility was acquired on a 99-year lease.
The plant, which will cost the car assembly company 2.8 million dollars, is intended to beef up the company’s market share, says Liu Jiang, general manager of Lifan Motors Ethiopia.
“This investment will enable us to change our semi-knock down assembly to complete knock down, in the short term, and push up our production capacity, from the current 1,000 units a year to 5,000 units,” Liu said, speaking during the signing of a contract with the Easter Industrial Zone, on Thursday, June 27, 2013.
Lifan started operations in Ethiopia in 2009, and assembled 3,000 cars, in eight different models, through the Semi-Knock Down (SKD) process.
“The car market in Ethiopia is very attractive and profitable, and we are determined to discharge quality products. The new assembly plant in the Industrial Zone will facilitate our objectives. Lifan will be the leading car assembler in Eastern Africa very soon,” Liu said.
Established in 2009 by Chinese investors, the Eastern Industrial Zone rests on 500ha of land. The total infrastructure investment of the zone is valued at 450 million dollars.
“I hope our Industrial Zone will be a comfortable home for Lifan Motors and provide a good service and assistance,” said Qiam Guo Ging, a manager of the Industrial Zone.
The current assembly plant, which is in Akaki Kaliti District, will be moved to the new location within six months, according to Semereab Serekeberhan, plant manager at Lifan Motors.
When completed, the company will export its Compete-Knocked Down (CKD) assembled cars to other Eastern African countries, he said.
United Bank to Expand ATM Services
The two other banks that founded PSS with United, Awash and Nib, are also set to purchase new machines
By ELLENI ARAYA
United Bank, two weeks ago, awarded a contract to the Lebanese-based, Computer Business Machine (CBM), for the supply of 50 Automated Teller Machines (ATM).
CBM, a company which supplies financial equipment and software products in partnership with IBM, according to its website, beat Copy Cat, an Indian supplier, which was the only other company invited to participate in the tender, according to an executive within the bank who wanted to remain anonymous.
CBM were informed of the award through a letter, according to Naim Ghattas, the system engineering manager at CBM, who was attending a ceremony at the Hilton Hotel, on Thursday, June 27, 2013, to celebrate Berhan International Bank’s acquisition of shares in Premier Switch Services (PSS). PSS is an electronic solutions company that the United, Awash and Nib international banks founded as major shareholders, in order to manage their electronic services, such as Point of Sales (POS) and Automatic Teller Machine (ATM).
Suppliers were shortlisted in a bid to make the procurement process quick, and in order to stick to the US made Diebold brand that United currently operates, the executive said.
Both CBM and United have refused to disclose the price at which CBM is offering to supply the machines, due to a confidentiality agreement. Diebold has an average unit price of 15,000 dollars, if it is the kind that is mounted through a wall, and 6,000 dollars if it is stand alone.
But, this may not necessarily be the price that CBM offered United, since, according to Naim, the unit price offered will be different if the volume of the order is larger.
United wanted to expand its ATM services, due to the large number of clients and branches it has, according to Berhanu Getaneh, president of the bank.
The bank, which had deposits worth 6.8 billion Br and 68 branches by June 2012, currently provides ATM services through 20 ATM machines, which it has leased from PSS.
Through PSS, United’s clients also have access to the ATM service provided by Awash and Nib international banks. Like United, both Awash and Nib also have 20 ATMs each, which they have leased from PSS. It was CBM that supplied the 60 ATM machines that PSS is currently leasing to the three banks.
United is not the only bank currently looking to procure additional machines. In the coming few weeks, Awash will also award a contract for the supply of 100, Fortune has learnt. More recently, Abbyssinia Bank produced a tender for the procurement of around 60 to 75 machines, according to local based ATM suppliers that Fortune talked to.
Nib International Bank is also getting ready to float a tender for the supply of 50 ATMs. The three banks will be able to jointly use the machines they are procuring through PSS.
United will sign a contract with CBM in the coming weeks, with delivery expected to happen within three months, the executive said.
Related article http://allafrica.com/stories/201307020127.html
Enough Room?
It is the express wish of Prime Minister Hailemariam Desalegn (left) that the manufacturing sector, which contributes 13pc to the nation’s gross domestic product (GDP), receives more attention from the private sector. The Prime Minister, who chaired the Public Private Partnership Consultative Forum, held this year at the Economic Commission for Africa (ECA), on Thursday June 27, 2013, sees the private sector as being too inclined towards services and trade. Led by Mulu Solomon (middle), the Ethiopian Chamber of Commerce and Sectoral Association (ECCSA) president, businessmen and women raised eight points of discussion for the forum, including the place the private sector has in the economy and the role that the state ought to play in it. The assessment of international finance organisations is that the role of the state is too big, crowding out the private sector. This is evidenced by the World Bank’s 2013 Doing Business Index, which ranks Ethiopia 127th out of 185 countries (two points lower than the previous year), in terms of providing a good business climate. But, such appraisals were dismissed by Hailemariam and other officials in his administration, including Kebede Chane (right), minister of Trade. There is room for the private sector in four key areas of industry, namely: textile and apparel; leather and leather products; pharmaceuticals and agro processing, the Prime Minister outlined. It is a first for Hailemariam to chair this forum, which was first set up in 2010, by the then Ministry of Trade & Industry (MoTI) and the ECCSA.
