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Financing Secured, Sugar Project Seeks Construction Co.

 
 

 

 
     
 
 















 

   


EXIM, an Indian Bank, has offered to loan 351 million dollars to co-finance the Tendaho Sugar Development Project, which will soon be issuing a tender inviting construction companies to participate in building its factory, in the Afar Regional State, 576Km northeast of Addis Abeba.

The Ministry of Finance and Economic Development (MoFED) has been negotiating with the bank through the Indian Embassy to secure the amount required in foreign currency.

The total expense for the project will be 8.68 billion Br. The Project submitted a request to the Development Bank of Ethiopia (DBE) six months ago for 1.66 billion Br. The remaining funds will come from EXIM’s hard currency financing.

Belete Alemayehu,
General Manager of Tendaho


The whole project including the factory, plantations, housing and infrastructure will cover 64,000ht. Out of that area, 14ht will be allotted for residential houses for the projected 45,000 workers to be deployed in the Project while the rest will be for sugar cane plantations.

Tendaho factory was recently established as a state company in its own right, taking responsibility from the Ethiopian Sugar Industry Support Center (ESISC), following a decision by the Council of Ministers six months ago.

The Tendaho project was launched under the joint auspices of the Ministry of Trade and Industry and the Ministry of Water Resources at the beginning of 2005, after the feasibility study was conducted by Indian firm, J.P. Mukherjee, hired by ESISC.

The Ministry of Water Resources has given the basic works of the irrigation canal and soil testing to two state owned companies, Water Works Construction Enterprise and Water Works Design and Supervision Enterprise. The sugar cane plantation work will be done by the Trade and Industry ministry.

With the factory being built in Asaita, the former Afar capital, a dam is to be constructed in Dubti. It will be 53m wide, 112m long, and hold 1.86 billion tonnes of water.

“As the project will mainly need the amount secured in dollars, we are issuing an international tender this week,” said Belete Alemayehu, general manager of Tendaho.

The Sugar Development Fund, a funding agency uniting the three operating state-owned sugar fatories, will give the factory 2.08 billion Br in equity to begin seeding for the project.

From the total budget set aside for the project, close to two billion Birr will be for dam and irrigation construction and 6.7 billion Br will go to the construction of the factory.

According to information from ESISC, the three factories now operational - Wonji Shoa, Fincha and Metehara - produce 2.8 million quintals per year. This is short of the growing demand that is estimated to be above three million quintals.

Tendaho is expected to become fully operational in 2008 and is projected to produce 772,200tn of sugar, 245,000tn of molasses and 145 million litres of ethanol annually at full capacity.

 
By Wudineh Zenebe
Fortune staff writer
 
 

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