HAVE ANY QUESTIONS? CLICK HERE
Dembel City Center, Africa Avenue - 10th floor
Address
+251-11-8-22-36-66
Office

News & Blog

The Ethiopian Commodity Exchange (ECX) is set to launch a system to enable farmers get loan from banks using their products stored in its warehouses as collateral. In a press briefing on Saturday, CEO of the ECX Wondimagegnehu Negera said enabling farmers to get access to finance using products that they stored in the warehouses of ECX is among the major plan for the current fiscal year.

According to him, the new system is aimed at helping farmers improve their working capital and that increases customers of the commodity exchange. Testing the new warehouse receipt system will be started soon on farmers who supply maize in the Bure and Nekemte branches of the commodity exchange.

The commodity exchange is planned to include Niger seed and cotton into the system. It also has a plan to include green mung bean and red apricot to the mandatory trading system, in which products are allowed to be transacted only through the ECX, he said.

The CEO said the commodity exchange is set to transact $1.3 billion in the current Ethiopian fiscal year, which began on July 8, 2019. Over 681,845 tons of products amounting to $1.2 billion was transacted through ECX during the concluded Ethiopian fiscal year.

Source: https://www.journalducameroun.com/en/ethiopia-to-give-loans-for-farmers-using-agricultural-products-as-collateral/

The government of Ethiopia and the AfDB Group has signed a $98 million grant agreement from the African Development Fund (ADF) to help finance the first phase of the Ethiopia–Djibouti Road Transport Corridor Project.

In a statement, the Bank noted that the agreement was signed by Ahmed Shide, the Minister of Finance, on behalf of the government of Ethiopia, and Abdul Kamara, the African Development Bank Group’s country manager in Ethiopia.

The total cost of the project is $255 million, comprising an ADF grant of $98 million to the government of Ethiopia, an ADF grant of $5.3 million to the government of Djibouti and a co-financing contribution of $151 million by the government of Ethiopia.

The project will kick off in 2020 and be implemented over a five-year period. The ADF grant to land-locked Ethiopia’s road transport sector is part of the Bank’s efforts to boost regional integration and connectivity, especially access to seaports.

The project consists of the construction of the first 60km of a 4-lane expressway section of the new 126km stretch from Adama to Awash and includes the design of a one-stop border post at Dewele.

The project will enhance trade by significantly reducing transport costs, thereby accelerating the economic growth of Ethiopia and its neighbour Djibouti, as it is part of the main import-export corridor.

The expressway is expected to improve access to markets for farmers and rural communities. Other beneficiaries include some 3,000 truck-drivers who work the 900km between Djibouti and Addis Ababa, and youths, who will receive over 95% of the job opportunities during the construction phase.

The Bank’s portfolio in Ethiopia comprises 24 operations worth about $1.7 billion, largely in transport, energy, water and sanitation infrastructure, governance and accountability, private sector, and agriculture and food security.

About 32% of the Bank’s operations are in road projects, amounting to $515 million, including four on-going projects covering about 610km in different parts of the country.

Source: https://www.esi-africa.com/industry-sectors/business-and-markets/ethiopia-afdb-sign-98m-grant-for-road-transport-corridor-project/

Chinese embassy in Addis Ababa organized a media open–tour in the Chinese built railway and investments on Adama industrial park on Wednesday, according to a report delivered during the occasion the freighter and commuter have gained revenue of 19.9 million and $537,400 since January up to July 2019 with the passenger train transporting 39,000 commuters.

Chinese ambassador to Ethiopian Tan Jian said the rail way is so important because land locked Ethiopia’s 95 percent import and export passes through Djibouti.

“We see this railway not only as a line of transportation, it is the artery, it is the life line and the economic corridor. This railway is related to your industrialization and to your development,” he articulated.

The 750 kilometers Ethio–Djibouti standard gauge Railway, which was built jointly by Ethiopia and Djibouti started operation no January 1, 2018 and is accelerating its impact on economy.
It has created a convenient transportation corridor for the import and export goods of Ethiopia through it.

Stating that 9 industrial parks out of 15 are along the railway line, Ambassador Jian noted “this is not just a line it is a corridor and we do believe that this corridor can be game changer for economic development.

The passenger train, which passes through 19 stations in 15 hours to arrive in Nagad, Djibouti has different compartments, namely hard – seat, hard – berth and soft berth compartments.
EDR Director General Engineer Tilahun Sarka said that the past year was promising as the railway managed to move 800 trains.

“The first year operation which means 2018 is really promising we managed to move some 800 trains and we earned revenue of around $35 million” he pointed out.”

There are 900 Ethiopians and 250 Djiboutian working at the railway, it was learned. During the media tour, local and international journalists have also paid a visit to Chinese investments in Adama industrial park.

Sunshine Wool textile Plc, which is one of the Chinese companies in the industrial park, is advancing to export products worth $10 million annually and while expected to top $50 million. Sunshine, which is anticipated to invest $980 million in two phases, has created 2,000 jobs and is expected to reach 7,000 in the completion of the first phase.

Source:https://newbusinessethiopia.com/news-monitor/ethiopia-djibouti-railway-makes-20-million/

Ethio Lease to import USD 200 million worth of machineries

The National Bank of Ethiopia (NBE) has licensed the first foreign capital lease finance company called Ethio Lease.

Ethio Lease was established by African Asset Finance Company, a New York City-based finance company, with a registered capital of 400 million birr. The company plans to provide leasing services to address equipment shortages in the agriculture, healthcare, and manufacturing sectors.

Ethio Lease, which was launched on Thursday at the Sheraton Hotel here in Addis Ababa, has become the first foreign company to venture into the capital lease sector in Ethiopia. The company has nine shareholders and seven board members including Girma Wake, former CEO of Ethiopian Airlines and former board chairman of RwandAir, and Gabriel Negatu, director general for Eastern Africa Regional Center at the African Development Bank.  

In his opening remark, Girma Wake, board chairman of Ethio Lease, said that the company would provide a new type of business for Ethiopia. Girma said Ethio Lease will bring agricultural machineries like tractors and harvesters and lease it to farmers. “We will enable our farmers to move from Oxen driven thing to sophisticated agricultural equipment that would increase productivity,” he said.

Ethio Lease would import and lease medical equipment such as MRI and City Scan to hospitals. “Many new hospitals have been opened in the last ten years. But a few of them have adequate medical equipment. We will provide them with the required medical equipment that would help them improve the medical facility and cater the medical need of the country,” Girma said.

Ethio Lease also plans to provide modern equipment for the manufacturing and hospitality sectors. According to Girma, at a time when Ethiopia is liberalizing its telecom sector Ethio Lease will supply telecom technologies such as telephone towers. “We will build and lease data centers to the telecom companies. They should not bring everything,” he said. “You can lease it and at the end you can own it,” he added.

The Ethiopian government first enacted the law that allows foreign companies to engage in the lease finance sector in 1998. The proclamation was revised in 2013. However, no foreign firm has joined the sector until Ethio lease submitted its application at NBE and the Ethiopian Investment Commission.

The Ethiopian Investment Commissioner Abebe Abebayehu said that Ethiopia can use Ethio Lease’s project to advance the job creation agenda. “By availing equipment through lease finance we can also enhance agricultural productivity. Through the lease finance we can address one of the critical constraints the private sector has been suffering for so long – access to finance,” Abebe said. The commissioner assured the investors that his commission will address some regulatory and bureaucratic hurdles.   

The US Ambassador to Ethiopia Michael Raynor stated that Ethio Lease offers a high quality investment to Ethiopia. “Ethio Lease represents an amazing opportunity – tens of millions of dollars of American capital; the latest in manufacturing, agriculture, and construction equipment technology; and a sustainable financial model that unleashes the potential of Ethiopian businesses, without adding to Ethiopia’s debt burden. This is a prime example of how the United States invests in Ethiopia,” Raynor said.

 “This event represents a big step forward in Ethiopia’s economic reform and growth effort. The US government is greatly encouraged by the steps Ethiopia is taking to liberalise its financial service sector and promote sustainable economic growth. The milestone that we are celebrating today is an important part of that journey. The US remains committed to supporting Ethiopia’s economic reform,” he added.

According to Raynor American companies promote high labor standards, fair wages, responsible environment practices, knowledge and technology transfer and human capital development. “I am proud to say the US private investment activity comes at the top when it comes to win-win investment,” he said.

The ambassador noted that Ethio Lease will import modern agricultural and construction machineries from America’s top-quality companies such as John Deere and Caterpillar.

Governor of NBE Yinager Dessie (PhD) said the main reason the government allowed foreign investors engage in lease financing to support the development of the manufacturing sector. “I consider the launch of Ethio lease capital goods financing company a milestone for creating additional enabling environment opportunities for small and medium enterprises. Ethio Lease will play a significant role in enhancing the financial sector by providing much needed resource through capital goods financing to Ethiopian,” Yinager said.  

Officials of Ethio Lease disclosed that the company would not require additional collateral for the equipment they would lease to customers. Ethio Lease CEO Girum Tsegaye said unlike other financial institutions Ethio Lease would not request collateral. In stead the equipment itself would be the collateral. “The main advantage of leasing for Ethiopians is that Ethio Lease will acquire the equipment in foreign currency and provide companies with the equipment they need to conduct their business operations using the local currency.  We will simply charge companies a monthly lease fee, which will be combined with the fees for insurance and maintenance agreement of the leased equipment.”   Girum told The Reporter that Ethio Lease would not take loans or any other funding from local sources. He said that the company plans to import equipment worth 200 million USD in the next two years.

The company started its operation with 14 million USD but according to company executives they would increase the capital significantly. During the launch ceremony three local companies engaged in the manufacturing, health and agriculture sectors signed memorandum of understanding with Ethio Lease. SBG, Arki bottled water producer, Arsho Medical Laboratory and an individual engaged in farming in Arsi zone are the potential lease who signed the MoU to work with Ethio Lease.   

Source: https://www.thereporterethiopia.com/article/capital-lease-finance-company-opens-shop     

logo_color.png
  • Africa Avenue Street
  • Dembel City Center, 10th Floor 
  • Office: +251 118223666     
  • info@lucypartners.com

Newsletter

Subscribe for financial and related update for every month.

© Copyright 2020 Lucy Partners. All Rights Reserved.
Website developed @ BEKI Square

Search