Foreign executives of a bio-diesel company that were here for talks with the investment officials of the Southern Regional State two weeks ago ended discussions early following an ethnic clash that broke out in the region.

Becco Bio-Fuel Ethiopia Plc, established by Israeli and American investors with a capital of 582.7 million Br, was granted 3,000ht in Amaro Special Woreda, in the Southern Regional State for the production of bio fuel from castor seeds.

According to a source close to the Company, the executives and the Regional State’s Investment Commission were talking with Woreda officials about Becco’s project when the conflict, which lasted from October 28 to 31, began. The executives were planning to spend October 28 in discussion, and use the following days to visit the sites of Becco’s and other projects in the area.

Some residents of the Amaro special  Woreda told Fortune that there are regular clashes in the area between the Guji pastoralists from the Oromia Regional State and the Amaro farmers of the Southern Regional State over tensions on the use of grazing lands.

A resident of the Woreda told Fortune that 80 houses were burned and five people killed in the Amaro town alone; the statement could not be confirmed.

Becco is the second company in the Southern Regional State to invest in bio-fuel production following National Bio-Diesel Corporation; this company had been granted land in the Benishangul Gumuz Regional State, but the soil had been found to be less suitable for their work.

The company is now said to be looking for additional land in the Southern Regional State. A third company, FRIAC Green Power Bio-fuels Ethiopia Plc, has been licensed in Ethiopia and is looking for suitable land in the Afar Regional State.

The Israeli side of the Becco is Hovev Agricultur Ltd, a food processing company, which was formed 40 years ago and operates in India, China, Indonesia, Spain, Ghana, Nigeria and Kenya.

Becco has applied for 30ht of additional land in Cheleleka, Gedeo Zone where it will process its bio-fuel; it is still waiting for the response of the authorities.
 

When it starts operation, Becco is expected to hire as many as 20,000 people, according to the Regional Investment Commission. The company will also establish a school and health centre for the community. 
 

Projected production is 120,000tn of oil a year.  An official of the Investment Commission said that the ethnic clash in the Shegna and Gelana kebeles of the Burji and Amaro Special Woredas could not be neglected as it was affecting investment in the region. 

The source close to Becco staff told Fortune that the Company was planning to begin operations by March 2007, but expressed concern that it may be pushed farther due to the clash.

The investors were not available for comment. Officials of the Southern Regional State were also not available for comment.
 

A source, however, told Fortune that the visiting Becco executives were asked by the Investment Commission to write a letter to Oromia and Southern Regional State officials requesting a resolution of the ethnic clashes.