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Plural News and Analysis on Ethiopia and HOA

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Posts Tagged ‘African Development Bank’

Ethiopia and Kenya secure funds for $1.26bn power line

Posted by Ethio Tribune on October 24, 2013

ADDIS ABABA — Ethiopia and Kenya have secured funds for a $1.26bn power line aimed at improving electricity supply and the project is set for completion in two years’ time, an Ethiopian official said on Wednesday.

Addis Ababa is poised to generate more revenue from power exports to its neighbour, beyond the border northern Kenyan town of Moyale which is already receiving a small amount.

Though it has been investing in infrastructure, including expanding power supplies, Kenya has struggled to meet demand and faces constant blackouts.

“Everything is as per schedule. We expect it will be completed on time … after two years,” Alemayehu Tegenu, Ethiopia’s minister of water and energy, told Reuters.

The project — a 1,068km high-voltage transmission line with a capacity of 2,000 MW — is co-funded by the World Bank, the African Development Bank, the French Development Agency and the Ethiopian and Kenyan governments.

The electricity will originate from a number of existing and planned power plants in Ethiopia.

Analysts estimate that the hydropower potential of Ethiopia — blessed with cascading rivers flowing through rugged mountains — is around 45,000 MW.

In a bid to become a major power exporter, Ethiopia is also building a 6,000 MW mega dam on the Nile, which is set for completion in four years’ time. Addis Ababa already exports up to 65 MW to Djibouti and about 100 MW to Sudan.

Reuters

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Tewolde Gabremariam of Ethiopian Airlines wins CEO of the Year award

Posted by Ethio Tribune on November 22, 2012

Ethiopia: Tewolde Gabremariam of Ethiopian Airlines wins CEO of the Year award

Ethiopia: The Africa CEO Forum awards leaders: Ethiopian clinches top prize

Source: Africa Report

The Africa CEO forum went into overdrive Tuesday night with four awards being dished out to some of Africa’s finest business entities. The winners have impacted the continent with their leadership and have the potential to becoming multinationals.

The list of nominees for the inaugural Africa CEO awards was quite long and impressive too, 37 in all, vying for four awards: Private Equity Investor of the Year, International Corporation of the year, African Company of the year and CEO of the year.

Organised under the auspices of the African Development Bank and Groupe Jeune Afrique, The Africa CEO Awards are a thumbs up for companies and investors who have demonstrated a continued determination to advance the continent’s development by virtue of their promotion and development of the African private sector, intra-African trade, regional integration as well as Social and Environmental responsibility.

There was little surprise when Tewolde Gabremariam of Ethiopian Airlines clinched the most coveted CEO of the year award. Explaining that the success of the company comes from the “total independence” of its corporate governance, the public owned Ethiopian airlines is one of the most dynamic and profitable airlines in Africa, with 80 destinations. It joined the global Star Alliance at the end of 2011 and was the first African company to start flying the Boeing 787 Dreamliner last September. Tewolde Gabremariam who became CEO of the company in 2010, is the quintessential image of the CEO who has climbed through the ranks since joining the Airlines in 1985 as an agent at Addis Ababa Airport.

The African Company of the year award went to ECOBANK Group and was accepted Thierry Tanoh, who was appointed as the group’s Chief Executive Officer at the end of 2011. ECOBANK beat nine other nominees to clinch the award. Headquartered in Togo, ECOBANK pioneered the idea of a pan-African banking strategy and is now present in 32 countries, including nearly all of ‘Middle Africa’, the zone between South Africa and the Sahara. It currently has over 11,000 employees after buying Oceanic Bank, one of Nigeria’s biggest banks, at the end of last year.

There were nine nominees for the Private Equity Investor Award of the year. Battling with the likes of African Capital Alliance, Helios, Tunivest/Africinvest, among others, Abraaj Capital’s win brings the company’s achievements to the fore. The most important private equity fund in the world and a specialist in emerging countries has 6 billion euros under management with 36 offices around the world. It has focused on Africa in 2012 by buying one the most important investors on the continent, Aureos Capital, and making a $125 million investment in the pan-African insurance group Saham.

Olam, a Singapore based agricultural commodity trading company, won the International Corporation of the year award. Its 11 billion euros of revenue in 2001-2012 and 17,000 employees make it one of the biggest companies in agribusiness, a few years after it decided to move into the production of agricultural products. Its close ties in Africa, especially with its roots in Nigeria, earned it close to 3 billion euros in revenue on the continent between 2001 and 2012. Among its large investments across the continent include a giant oil palm and fertiliser project in Gabon

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Gold mining promises big boost for Ethiopia’s development

Posted by Ethio Tribune on August 30, 2012

MDG : Gold mine in Ethiopia : drilling machine in the Midroc-owned Lega Dembi gold mine

An engineer gives instructions to a drilling machine operator in the Lega Dembi gold mine in southern Ethiopia. Photograph: Sven Dumelie

The outlook for many people in Ethiopia seems less than bright following the sudden death of the prime minister Meles Zenawi last week, yet as far as the country’s natural resources are concerned, the outlook is golden. Gold reserves could be a source of greater development for the country.

British firm Nyota Minerals is about to become the first foreign company to receive a mining licence to extract gold from an estimated resource of 52 tonnes in western Ethiopia. Its chief executive, Richard Chase, was involved in Tanzania’s gold boom in the 1990s. He believes Ethiopia has similar potential. “There are huge areas of relatively underexplored and unexplored prospective ground, and the infrastructure is not too dissimilar [to Tanzania], although the availability of cheap electricity is a definite plus,” he says.

Ethiopia also boasts gemstones such as diamonds and sapphires; industrial minerals including potash; and other precious and base metals. The development of these resources is a key plank of the government’s export-orientated growth strategy and allows Africa’s biggest coffee grower to diversify its economy to reduce reliance on agriculture, which accounts for 43% of Ethiopia’s gross domestic product.

“We expect our rich mineral wealth to contribute to economic development in Ethiopia,” says the state minister of mines, Tolesa Shagi. Ethiopia’s openness to foreign investment over the past decade is beginning to pay off, Tolesa believes. “As an African country we have not had the knowledge or the resources until recent years,” he says.

A recent survey increased estimates of gold resources to 500 tonnes. The government says production could rise to 40 tonnes a year from just over four tonnes last year, earning the country around $1.7bn (£1.1bn) at current prices. This could dramatically boost development and reduce dependency on imports. In the meantime, the mining sector is forecast to increase exports and earn foreign currency.

The largest gold mine in Ethiopia is Lega Dembi in the Sidamo province of southern Ethiopia. It was transferred from the government to a company called Midroc Gold, owned by billionaire Saudi businessman Mohammed Hussein al-Amoudi, for $172m in 1997. In 2010, Midroc began its second gold mining operation in Sakaro, near Lega Dembi. Amoudi has also made huge investments in Ethiopian agriculture, cement and transport. The relationship between the billionaire and the government has attracted fierce criticism from government opponents.

After gold, tantalum is the next most sought after mineral in Ethiopia. Chinese firms are eyeing a deal with a state-owned company that claims it is the world’s sixth-largest producer. Up to 80% of this precious metal is sold for use in the production of transistors for Chinese-assembled mobile phones, cameras and computers.

Ethiopia has licensed 250 foreign firms, from countries including China, South Africa, the UK, the US and Canada, to prospect for minerals. Investment in the sector reached $1bn in 2009, according to official figures. An overstretched mines ministry is not accepting any further licence applications while it deals with assessing existing applicants and monitoring investments. Companies are now required to include an environmental and social impact assessment in their applications.

A recent paper by the African Development Bank said a large number of resource-rich African countries are seeing little benefit from their mineral wealth. It also said some have not been accruing maximum benefit due to cushy deals for corporations.

However, this could change if new legislation focusing on regulating the excesses of transnational mining companies has the desired effect. Ethiopia is planning to sign up to Publish What You Pay. The international initiative, subscribed to by more than 70 countries, holds governments accountable for the management of revenues from the oil, gas and mining industries. Once fully signed up, Ethiopia will be expected to divulge all company payments and government revenues from its extractive industries.

“We want the mining industry to be for the people and not just for big business,” says Tolesa. “We have to be concerned about our community, our environment and the industry’s contribution to the development of our nation.”

The Ethiopian Mining Proclamation states that the government requests 5% free equity shares with every licensed mining company operating in the country, as well as 35% income tax and 8% royalties.

As well as more money to plough into development policies, by opening up the mineral wealth to foreign investment Ethiopians could benefit from improved infrastructure, such as roads and greater employment opportunities.

Investors see Ethiopia as a stable, investor-friendly country in the volatile Horn of Africa. Under Meles it attracted significant overseas investment – particularly from China – to help drive growth. Whether it will be business as usual in Ethiopia under Meles’s successor, Hailemariam Desalegn, will be interesting to watch. As Nyota’s Chase says: “Ethiopia is undoubtedly a frontier for exploration in Africa.”

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