The projected date of the completion of the
construction of the Tendaho Sugar factory has been
set to October 2011.
This date had been pushed forward four times because
the Indian company which won the tender for the
project, Overseas Infrastructure Alliance (India)
Pvt. Ltd was unable to start operation after signing
the contract in 2006. The contract stipulated that
construction had to begin within 36 days of the
signing of the contract, but that had failed to
happen for various reasons.
The feasibility study for the factory had indicated
that it would cost six billion Birr to complete the
project. The delay and the inflation that had been
raging in the time since then have made a very big
upward adjustment to that figure now. Over the past
two years, Ethiopia has experienced inflation as
high 44pc. The estimate for Tendaho went up from six
to eight billion Birr. It is now said that it could
even go to as high as 10 billion Br.
The Ethiopian Sugar Development Fund collects a
share of the sale of sugar from the existing sugar
factories. It used this money to stabilize the
market by importing sugar. The increasing cost of
the Tendaho Sugar factory will be funded by money
from this institution according to sources.
The factory and its plantations will lie on
54,000hct of land in the Afar Regional State; an
additional 10,000hct will be developed by Tendaho
for the benefit of the local pastoralists. It will
have a capacity of 600,000 metric tonnes when it
The factory project was initiated as part of a 15
billion Br expansion of the sugar industry with the
intention of increasing the amount of ethanol
production to 143m litres and raising Ethiopia’s
share in the world sugar market to 2.5pc. It remains
to be seen how the increasing cost of the project
will affect the entire sugar dream. The project’s
importance is such that Prime Minister is said to
closely follow its progress.