INVE VEST STMENT OPPORTUN UNITI ITIES S IN E ETHIOPIA Inter - - PowerPoint PPT Presentation

INVE VEST STMENT OPPORTUN UNITI ITIES S IN E ETHIOPIA

Inter ternational national Cooperation eration Expo,

• , Fiera

ra di Roma, a, May 15-17 17

FDRE Ministr try y of Fi Finance nce H.E. Admasu Nebebe be, State Minister ter

1) 1)

Country ntry Pr Profile le

2) 2)

Cooperat eration

• n for Sustain

tainabl ble e Deve velopment

• pment

3) 3)

Favo vorab rable e Condit itio ions ns to Invest vest in Ethiopi pia

4) 4)

Devel velopm

• pmen

ent/Investment t/Investment Opportuniti rtunities es

FDRE RE Minis istr try y of Fina nanc nce

 Locatio

cation: n: Horn of Africa, close to Middle East and Europe market

 Political

itical Sys ystem: em: Federal state with multi-party system

 Capita

tal l City : Addis Ababa, which is the seat

• f AU and ECA

 Area: 1.104 million square kilometers  Arab

able e lan and: 513,000 square kilometers (45%)

 Irriga

igated ted land: 34,200 square kilometers (3%)

 Popul

pulation: ation: approximately 105 million, diverse ethnicities

 As witnessed in the realization of most of the MDGs,

Ethiopia is strongly committed to contribute to the global achievements of the SDGs as well.

 The SDGs are mainstreamed in the national GTP II.  The implementation of GTP II and the SDGs require a

collaborative efforts mainly from development partners and investors.

 Apart from loan and grants, the government of

Ethiopia is looking for a sustainable mechanism of financing development needs, i.e, Trade and Investment.

3) 3) Favorabl

ble e Condit ition ions s to In Invest t in in Ethio iopia ia

• Unprecedented Political and Economic Reforms
• Political Reforms

 Democracy and Rule of Law  Building peace in the region, particularly with Eretria  Structural reform and reshuffling

• Economic Reforms

 Partial Privatization of SOEs (airline, telecom, energy, shipping and others)  Strengthening Public-Private Partnership business model  Ensuring stable and free market

Favorab

able le Condit ition ions s to In Invest st in in Ethio iopia ia

• Growing Economy

 Ethiopian economy is one the fastest growing economy in the world, exhibiting double digit growth for almost the last ten years.  The economy has shown a 46% growth in FDI inflow-

• ne of the most dynamic and largest FDI recipients in

Africa (UNCTAD World Investment Report,2017).

• Excellent Climate and Fertile Soil

 Diverse topography and geographical location  Moderate climate by African standards due to its elevation

 Fa

Favo vorab rable e Con

• nditio

ditions ns to I

• Invest

vest in Ethiop iopia ia

• Strong Guarantee and Protection

 Private property is protected by the constitution and the investment law.

• Young and Trainable Labor Force

 Ethiopia is the second populous country in Africa with 60% of working population. The abundant labor makes Ethiopia favorite for investment.

• Regional Hub with Access to and wider market

 Large domestic market (more than 100 million population).  Member of COMESA  Addis Ababa is the regional air hub and home of the reputable Ethiopian airlines.

 Favo

vorab rable e Condi diti tions

• ns to I

Inve vest t in Ethiopia iopia

• Improved Economic Infrastructure

 Building and expanding Industrial Parks and Industrial Clusters for FDI  Increment of power production. The electricity generating capacity is expected to reach 10 thousand MW by mid 2025.  Expanding telecom services  Growing road and rail way networks that connect national and regional markets.  Excellent passengers and cargo services of Ethiopian airlines

• Government Commitment

 High level political commitment for investment promotion  Introduction incentiv ntive e packages for investors

Su Summa mary y of Major Incentive ive Package ges

Fis isca cal Incent centives Brie ief f Desc scrip ription ions Eligi igibil iliti ties es

Business Income Tax exemption in the manufacturing sector (up to 6 years) exemption reduced by up to 2 years if investment is in Addis & Special Zone of Oromia. Exemption up to 6 years for: manufacturing food, textile, leather, chemical, metal, machinery and vehicles. Less than six years for

• ther industries.

1) Eligible sector/Sub-sector of investment 2) Holding of investment permit 3) Holding of business license 4) Investment to establish a new enterprise

• r expansion or upgrading

Business Income Tax exemption in the agriculture sector (up to 10 years) exemption reduced by up to 3 years if investment is in Addis & Special Zone of Oromia. Up to 6 years for crop production; up to 4 years for animal production and mixed farming; up to 9 years in forestry; and up to 10 years for horticulture in cluster zones identified by the government with at least 80% export. 1) Eligible sector/Sub-sector of investment 2) Holding of investment permit 3) Holding of business license 4) Investment to establish a new enterprise

• r expansion or upgrading

Business Income Tax exemption for industrial parks development /developers (10-15 years) 10 years if the park is in Addis Ababa and Special Zone

• f Oromia Surrounding Addis Ababa; fifteen years for

industrial parks in other areas 1) Holding of investment permit for industrial park development 2) Holding of business license Export-linked business income tax exemption (additional two years for at least 60% export or supply to exporter) Available for exporters 1) Eligible sector/Sub-sector of investment 2) Holding of investment permit 3) Holding of business license 4) Direct export or supply to an exporter of at least 60% of own products or services Business Income Tax exemption in industrial parks (additional two-four years for industrial park enterprises with 100% export plan and achive at least 80% export) Differentiation based on location of industrial park (two years if the park is in Addis Ababa and Special Zone of Oromia Surrounding Addis Ababa; four years for parks in other areas) 1) Manufacturing company investing within an Industrial Park 2) Holding of investment permit 3) Holding of business license 4) Direct export or supply as production input to a producer exporter of at least 80%

• f own products

Fis isca cal Incent centives Brie ief f Desc scrip ription ions Eligi igibil iliti ties es

Business Income Tax exemption for pharmaceutical sector in industrial parks 1) Investment in Active Pharmaceutical Ingredients: 12-14 years (eight-ten years base depending on location of park + two years for 30% export + two years for 60 % export) 2) Investment in Final medicine/Formulation 10-12 years (six-eight years base depending on location of park + two years for 30% export + two years for 60 % export) 3) Investment in Pharmaceutical Packaging 7-8 years (three-four years base depending on location of park + two years for 30% export + two years for 60 % export) 1) Eligible sector/Sub-sector of investment 2) Holding of investment permit 3) Holding of business license 4) Investment in an industrial park to establish a new enterprise (Greenfield) or for expansion or upgrading of an existing enterprise as defined under the Investment Proclamation Business Income Tax exemption in Electricity generation, transmission and distribution (up to five years) Business Income Tax exemption reduced by one year if investment is in Addis Ababa and Special Zone of Oromia surrounding Addis Ababa 1) Eligible sector/Sub-sector of investment 2) Holding of investment permit 3) Holding of business license 4) Investment to establish a new enterprise or expansion or upgrading Business Income Tax exemption in Information and Communication Technology (ICT) development (up to five years) Business Income Tax exemption reduced by one year if investment is in Addis Ababa and Special Zone of Oromia surrounding Addis Ababa 1) Eligible sector/Sub-sector of investment 2) Holding of investment permit 3) Holding of business license 4) Investment to establish a new enterprise or expansion or upgrading Business Income Tax exemption for hotel and tour service providers in non- traditional tourism destinations (up to five years) The list of non-traditional tourism destinations is defined through Investment Board Decision including: Bale and Simien Mountains; Ertale, Gerehalta mountains; rift valley lakes (Abaya, Shala, Chamo and Abiyata); and Wanchi mountain (lake and afro-alpine). 1) Eligible sector/Sub-sector of investment 2) Holding of investment permit 3) Holding of business license 4) Investment to establish a new enterprise

• r expansion or upgrading

Personal Income Tax (PIT) exemption for expatriate employees Up to five years for expatriate employees of sourcing companies located in industrial parks 1) The employer company has to be in its first five years of operation 2) The expertise offered by the expatriate has to be unavailable in the local market

Cust stoms

• ms Incen

enti tives es Brie ief f Desc scrip ription ions Eligi igibil iliti ties es

Exemption from customs duties and other taxes (VAT, sur tax, withholding and excise tax) on imported capital goods Time limits for enjoying this right differ based on sector, size and employment potential of investment. 1) Eligible sector/Sub-sector of investment 2) Holding of investment permit 3) Holding shipping documents (commercial invoice, packing list, certificate of origin, bill

• f lading)

Exemption from customs duties and other taxes (VAT, sur tax, withholding and excise tax)on imported construction materials This right can be exercised up on establishment of a new enterprise (before commissioning) and for expansion/upgrading of an existing one as defined under the Investment Proclamation 1) Holding of authenticated land lease or rental agreement 2) Holding of construction permit, site plan Exemption from customs duties and other taxes (VAT, sur tax, withholding and excise tax) on imported spare parts For industrial park developers and enterprises (manufacturers with 100% export), there is no time or value limitation. For other manufacturers and investments in agriculture, there is no time limit but the value should not be more than 15% of the total value of the capital goods. For other investors eligible to import capitals good duty free, there is time limit of five years from the date of issuance of business license, and the value should not be more than 15% of the total value of the capital goods. 1) Eligible sector/Sub-sector of investment for import of capital goods 2) Holding of investment permit 3) Holding shipping documents (commercial invoice, packing list, bill of lading) 4) Duly completed reconciliations form Exemption from customs duties and other taxes (VAT, sur tax, withholding and excise tax) on imported vehicles The type and number of vehicle that can be imported duty free varies depending on investment sector, size, nature and location of investment (within Vs outside industrial parks). Shipping documents (commercial invoice, packing list, certificate of origin, bill of lading, LC from bank) for the vehicles to be imported Exemption from customs duties and other taxes on the import of personal effects by industrial park residents Right given to industrial park developers, industrial park enterprises, and workers living inside the park. List of items that can be imported duty free is annexed to the Industrial Park Directive of the Ethiopian Investment Board 1) Holding of certificate of residency within an industrial park at the time of claiming/exercising this right, or 2) To be an industrial park developer or industrial park enterprise

Financi nancial Incen enti tives es Brie ief f Desc scrip ription ions Eligi igibil iliti ties es Subsidized land lease and shed rental rates in industrial parks Industrial park developers can access land at promotional rate. Industrial park enterprises pay subsidized shed rental/sub-lease rate for developed lands. Manufacturing in industrial parks meeting the specific criteria for the park (sector of investment, export performance etc.) Priority forex access for manufacturers, construction companies & transfer of sales from shares or liquidation of FDI Priority forex access for manufacturers, construction companies and conversion/transfer of sales from shares or liquidation of FDI

• Export earnings retention

Retention of 30% of export earnings for an indefinite period of time; and retention of 70% of export earnings for 28 days 1) Export of goods or services 2) Export earnings on process 3) Opening foreign exchange retention account in an authorized bank Access to foreign loan (with debt; equity ratio of 60:40 for foregin investors) a) Foreign investors can raise up to 60%

• f their finance through loan from

foreign markets b) Domestic investors engaged in export-oriented business that generate forex can access foreign loan 1) Application letter 2) Valid investment permit/ business license 3) Foreign capital registration certification 4) Document justifying repayment capacity 5) Draft loan agreement

4) Deve velopment/Investme

• pment/Investment

nt Opportuniti rtunities es in Ethiopia pia

Ethiopi

• pia

a has identif ntifie ied d strate tegic gic invest estment nt area eas s and working rking on develo veloping ping the light ht manufact ufacturin uring g indust strie ries

16

Pharma rmaceu ceuti tica cal Agro-pro processi cessing Textile Leather er Hort rticultu ture re Energ rgy Tourism rism

I.

• I. Lea

eath ther er and nd Lea eath ther er Produ

• ducts

cts

 Overvie

iew w of the Leather in indust stry ry of Ethio iopia ia

• This sector is one of the leading manufacturing

sectors in Ethiopia attracting both domestic and international investors.

• Currently, Ethiopia is exporting finished leather and

leather products such as shoes, bags, gloves etc.

• Export of leather, which was US $ 23 million in

2013 reached US $ 133 million in 2018.

 Poli

licy and St Strategy gy

• Cognizant of its growth potential, the government has

given big emphasis for the sector as stipulated in the Growth and Transformation Plan II (GTP II).

• As clearly stipulated in the GTP II, the leather sector export

and employment target by 2020 is USD 800 million and 59,580 respectively.

• Since 2012, the government has discouraged export of

hides and skins to boost exports of value-added products.

• The agriculture sector is one of the key constituent of the
• economy. Thus, creation of linkages between the

agriculture and the industry has been adopted by the government as the main part of structural transformation of the economy.

• There are ongoing investments/projects under Integrated

Agro-Industrial approach.

 Why to Inve

vest st in the Leath ther er Sector

• r of E

Ethiop hiopia? ia?

• Ethiopia has a strong raw material base for the leather

industry: its cattle population is more than 53 million, and sheep and goat population are 25.5 and 24.1 million

• respectively. This makes Ethiopia the 1st from Africa and

the 9th from the world in its cattle population.

• The sector has substantial potential for investment and
• growth. Only 50% of hides and skins potential are being

utilized currently.

• Ethiopia has a potential for competitive price and quality

supply of skins and hides. The highland sheepskins of Ethiopia have got a worldwide reputation in terms of quality, thickness, flexibility, strength, compact structure, and a clean inner surface.

 Invest

vestment ment Options ns in the Leather her Sector

• Tanning of hides and skins up to finished level;
• Manufacturing of leather products such as luggage,

footwear, garments, saddle and harness items.

• Integrated tanning and manufacturing activities.

II

• II. Texti

tile le and nd Garment ments s

 Ove

verview view of the Textile and Garment ment Sector

• The sector is showing growth as domestic and

multinational firms are engaging in textile and apparel productions for local and global markets.

• The sector is given a prominent attention for

boosting export, job creation and being roll model for other sectors.

 Policy and Strategy

y

• The sector has become a top priority for Ethiopia as part
• f its goal of becoming middle income country by 2025.

The government has been focused on enabling the sector to be globally competitive enough to contribute hugely for structural transformation of the economy, foreign currency generation, job creation and poverty reduction at large.

• Ethiopia has also envisaged to be hub for light

manufacturing in Africa through attracting FDIs especially in the textile sector.

• The target for 2020 is to generate USD 1 billion export

earnings and create over 300,000 job opportunities.

• National support mechanism is in-placed. The Ethiopian

Textile Industry Development Institute is established to enhance skills and technologies in the sector.

 Why to Inve

vest st in the Texti tile le Se Sector

• r of Ethiopi

iopia?

• Availability of abundant labor force at competitive wage,

low-cost electricity and potential of backward and forward linkages.

• High productivity of workers (production of apparel per

day).

• The preferable climatic and soil conditions of Ethiopia gives

a potential to develop a competitive cotton or textiles industry.

• The geographic location can also make Ethiopia choice of

investment place. Locating in the center of the world with easy access to international value chains makes commercial exchange easy and less costly.

• Advantageous to African Growth and Opportunity Act

(AGOA); duty-free access to the European Union (EU) and U.S. markets.

 Inve

vestm stment nt Op Options ns in the Te Textile and Garment nt Sect ctor

• r
• Processing the raw material: Ginning, integrated

textile mills, spinning, weaving and/or knitting, dyeing and printing.

• Production of garments; the manufacturing of

knitted and crocheted fabrics, carpets, and sportswear, among others.

• III. Hor
• rti

ticultur ulture

 Overvie

iew w of t f the Horticult ulture ure Sector of E f Ethiop

• pia

ia

• The horticultural sector is composed of fruits,

vegetables, flowers, herbs, and spices. Even though the sector is new (a decade old), increase in farm number, revenue generation and export volume are shown through mechanized horticulture production.

• There is international demand for horticulture
• products. Over 130 international investors are
• perating in Ethiopian horticulture sector, exporting

to Europe, USA and middle east countries.

• It is one of the top foreign exchange earners for
• Ethiopia. Ethiopia is the 4th largest non-EU exporter

to the EU cut-flower market and the 2nd largest flower exporter from Africa.

 Po

Policies es and Strateg egies es

• Having extensive arable land and conducive

climate, the government of Ethiopia has more been considerate of developing the agricultural sector to unlock its potential.

• The government is facilitating for the creation of

value chain production through construction of agro-processing industrial parks.

 Wh

Why to Inve vest st in the Ho Horticul ultur ture e Bu Busines ness? s?

• The sector has huge potential for growth. The total

area available for horticulture is huge; while around 11% of it is under use. In addition, Ethiopia has also diverse agro climatic seasons, 122 billion cubic meters of surface water and 2.6 billion cubic meters

• f groundwater resources.

 Invest

vestment ment Opportuni

• rtuniti

ties es

• Fruits and Vegetables: the most common tropical

and sub-tropical fruits cultivated in Ethiopia are Mango, banana, papaya, avocado, citrus, grape, and pineapple.

• Flowers: floriculture is one of the profitable

agribusiness in Ethiopia. Given the conducive climate and growing demand for flowers in the global market, investment in the area is seen as profitable business.

• The other investment opportunities of the

horticulture sector includes Herbs and Spices.

IV. . Agr

gro-Processing ssing (Food Processing) ing)

 Ove

vervi rview ew of Food-Proces Processing sing Sector

• Is one of the prioritized sectors in Ethiopia that
• ffers significant investment opportunities for both

domestic and foreign investors.

• This sector produces wide range of agricultural

commodities such as: coffee, oilseeds, pulses, fruits and vegetables.

• Ethiopia is hosting international forums to attract

more investors in the sector, i.e. Ethiopia’s International Agro-Industry Investment Forum where B2B meetings happen is mentionable.

 Po

Policies es and Strateg egies es

• Huge emphasis for agro-processing; as a path for

economic transformation

• The Government of Ethiopia is exerting unreserved

efforts to increase the supply and improve the quality of agro-processing products.

• Incentivizing investors in the sector.
• Eighteen major agro-ecological zones have been

identified in the country, and over 3 million ha land has been made available for investment. Ethiopia

• ffers one of the largest and most diverse

agricultural investment opportunities on the continent.

 Why to Inve

vest st in the Ag Agro-Pr Processi

• cessing

ng Se Sector

• r?
• Huge potential in terms of arable land, water resources and

conducive climate makes the Ethiopian food processing priority sector for investment.

• Location: Ethiopia is at the crossroads between Africa, the

Middle East, and Europe.

• Agriculture is the business of most of the people. Around

80% of the Ethiopian population depends on agriculture for their livelihoods.

• Value addition and commercialization of agricultural

products will transform the economy and benefits the majority of the population involved in agriculture.

• Investing in the sector is investing in Ethiopia’s growth

potential which leads to contribution for national development.

• Lucrative business: wide domestic market and growing

international demand.

 Investm

tmen ent t Opportuni tunitie ties s

• Apart from leather, textile and horticulture; food processing

sector in Ethiopia contains the following opportunities.

• Coffee: Ethiopia produces the best Arabica coffee in the world

and is known for having a wider genetic variety of coffee

• Dairy products
• Beverage processing
• Meat processing
• sesame seeds which are highly valued on the international

market

• Honey productions: Ethiopia is the tenth largest honey

producing country in the world and the largest in Africa. It ranks fourth in the world in terms of bee wax production and export

• Manufacturing of edible oil
• Manufacturing of starch and starch product
• Processing op pulses, oil seeds or cereals

V. . Tourism rism Sector tor

Po

Policies es and Strateg egies es

• The government is committed to unlock the

potential of the tourism sector.

• Opened the sector for private investors.
• Currently the government is undertaking reforms to

develop the sector; the reform includes undertaking national assessment of other potential tourism attractions.

 Why to Invest in the Tourism

sm Sector? r?

• Ethiopia is one of the oldest civilizations.
• Availability of man made and natural tourist attractions

including national parks and reserves of flora and fauna, river falls, Obelisks, rock-hewn churches, ancient caves.. Etc.

• Cultural events
• Home of more than 80 culturally diverse ethnic groups

and nationalities.

• Several tangible and intangible tourist attractions are

registered by UNESCO.

• Addis Ababa is the seat of AU and ECA, among other

several embassies and international organizations.

• Excellent flight operation of Ethiopian airlines is

advantage, not only for the tourism of Ethiopia but also for the continent.

Investment

vestment Opportuniti rtunities es in the Tourism sm Se Sector

• r
• Star-rated hotels,
• Lodges and
• Grade 1 tour operations

Strategic rategic Inves estm tmen ent t Area eas

Pharmaceu rmaceutical tical Secto tor Opport rtuniti ties es

The he GoE has identif tifie ied d Pharm rmaceutic ceutical al as one of the priority

• rity sectors
• rs

42

• Ethiopia is one o
• f the first African

n countries to d develop national strategy for pharmaceutical manufacturing – Strategy: : To grow exports in addition to substituting imports and improving access to medicines

• The Government will develop state of the art I

Industrial Parks specialize zed in p pharmaceutical manufacturing ng

• Dual benefit of increasing access to m

medicines and promoting rapid industrializat zation of the country Goal: To b become a p pharmaceutical manufacturing ng hub i in Africa ca

There re is access ss to market et and Industr trial al Park (IP) designated ated for pharmac armaceuti eutical cal sector

43

 Potential to serve as expor

• rt

t hub for the >$20 billion

• n pharma

maceu euti tical market et in Africa

 More regional markets through economic communities including COMESA and IGAD

progressing towards regulat atory

• ry harmon
• niza

zation

• n.

Focused ed Policies Abundant workforce ce Access to m market

• Strong

g investme tment t policy focused d on pharmac maceutical als which is led by Prime Minister Office – Tax x exemp empti tion

• ns: corporate income tax, personal income tax, duties, export taxes

– One-sto top p shop for government services – Price preferen rence in public procurement t which accounts for a huge market

Sourc rce: Interviews, market research reports

Advantages es of manufacturing ng pharmaceuticals in Ethiopia Specialize zed Industrial Parks

• Kilinto

to Industri rial al Park (KIP) will be state-of-the-art and will specialize in pharmaceutical manufacturing

• Land lease

e rate for KIP is 3.59 USD/m /m2 p.a. for 40 years.

• More than 10 schools
• ls of pharmac

macy in Ethiopi pia

• Expanding programs to new areas of special

aliza zation

• n (e.g. industrial pharmacy, pharmaceutical

analysis, etc.) – Centr tres of Excellence are being established to offer these specializations

Domest estic ic market ket is attract ractive ive due to rising ing population lation and health lth coverag erage

44

• Government increa

easi sing healthcare are coverag rage e to the large rural population that promotes the need for increased access to pharmaceutical products; – Primary health care service coverage reached 100% in 2015

• Aware

reness, ess, diagnosi sis s and treatmen ment t of diseases ses are increas asing; – High burden of communicable diseases: malaria, HIV/AIDS, and TB – Preva valen ence ce of non-comm communica cable e diseases, ses, such as diabetes, cancer and hypertension Growing populati tion and economy my Rising health care e cover erage age

• Ethiopia has second-larg

argest est populat ation in Africa a (>100M, ~8.5% of Africa’s population); grow

• wth of 2.3% per year is expected
• With average economic

c growth th of >10% per year, , increase in disposable income will influence spending on pharmaceutical products

Key drivers of pharmaceutical demand in Ethiopia

Sourc rce: Interviews, market research

Local cal pharm rmaceutic ceutical al market ket is expected pected to grow

• w at 15%

% per year r to reach ach nearly arly $1 billion lion by 2020

45

Pharmaceutical market in Ethiopia (2015-30F), US$ million

Sourc rce: Frost & Sullivan, World Bank, National Strategy and Plan of Action for Pharmaceutical Manufacturing

450 450 517 517 595 595 684 684 787 787 905 905 1,821 21 3,662 62

3,000 500 500 2,000 1,500 1,000 2,500 3,500 4,000 2025F 2025F 2018F 2018F 2015 2015 2016F 2016F 2017F 2017F 2030F 2030F 2019F 2019F 2020F 2020F

Ethiopi

• pia

a is the next front ntie ier r for pharm rmaceutic ceutical al marke rket t value ued d at >$25B

46

Note: *2013 numbers are approximate; 2020 numbers are estimates; **CAGR is for the top seven countries in Africa (Algeria, Egypt, Ghana, Kenya, Morocco, Nigeria, and South Africa) Source: McKinsey (2015) Africa: A Continent of Opportunity for Pharma

The growth th of pharmace maceuti tical al sales in Africa* a* (2013-20E), $US billion

6% 9% 6%

10% 13% 17%

Pharma rma segme ment t growt wth in Africa a (2013-20E), $US billion

As developed markets stagnate, Africa represents a promising source of growth for multinational pharmaceutical cal companies

CAGR%

CAGR%**

Energ rgy y Sector Opportu tunities ties

Strategic rategic Inves estm tmen ent t Area eas 2

Ethiopi

• pia

a has 4.29 GW instal alle led d capacit acity and more e than 60 GW poten entia tial l from renewa ewable ble sources ces

48

4.29 GW

Installed Capacity 86% hydropower

60% 60%

National electrification rate

60 GW+

Potential power generation from hydropower, wind solar and geothermal

17.2 GW

Planned total installed capacity by 2019/20

90% 90%

Electrification Rate GTP II targets for 2019/20

80 kwh

Per Capita Electricity Consumption (per year)

4.9 GW

2018 Installed Capacity

17.2 GW

Planned installed Capacity by 2019/20

5,189

Number of rural towns and villages reached by the Rural Electrification Program

52.5%

Percentage of towns with access to electricity 60 GW

Potential Capacity

Tremen remendo dous us opportunit

• rtunity

y in the sector

• r with

h ~4,5 ,500 MW expec pected ted from privat vate e sector

• r gener

eration ation

49

Demand

Increased power demand

Potential al

Utilized less than 5% of hydropower <1% of wind and geothermal

Opport rtunity

Renewable energy private development for the GTP II period is 4,524 (MW)

Hydro: nine major basins estimated to generate competitive energy of about 45,000 MW Wind: generating capacity about 10,000MW Solar: average solar energy potential of 5.5 KWh/m2/day Geothermal: abundant resources in Ethiopian Rift Valley system which runs for mare than 1000 Km across the country with 5,000 MW capacity

• Private sector is allowed for on-grid

and off-grid power generation including Public Private Partnership (PPP)

• Ethiopian Electric Power (EEP) buys

power from Independent Power Producers (IPP)

• IPPs can generate power and sell it

to EEP

• Transmission is administered by EEP

and distribution is administered by Ethiopian Electric Utility EEU

 Pubic

bic-Private rivate Partn tnersh erships ips

• Newly introduced model in Ethiopia; viewed as

alternative way of narrowing investment gaps in Ethiopia through blended financing.

• The government is keenly interested to invite

especially foreign private investors, as capacity could be issue for domestic once.

• The government has already formulated policy to

guide PPP.

• Institutional strengthening and system creation is

being carried out.

• Currently, road and energ

rgy sectors are ready for PPP model.

Africa’s 1st park with zero liquid d discharg rge facility y (ZLD) Size: 350 Ha Number er of shed: 52 sheds (2018) Locat ation: : Hawassa, Ethiopia Specializat ation: Textile and Apparel Inaugurat ration date: July 2016

Complete pleted d IPs in Ethiopia

• pia occupied

pied by renown

• wn brands

nds in the textil ile e & appare arel sector

• r

51

Hawassa ssa Industry ry Park Bole e Lemi I In Industry ry Park Size: 156 Ha Number er of shed: Phase I has 20 sheds in total where the 10 sheds are 5500 M2 sized Locat ation: : Addis Ababa, Ethiopia Specializat ation: Textile, Apparel, leather Inaugurat ration date: November 2014

Kilinto into Indust stria rial l Park rk is the only and the first t IP that specializ cializes es on pharma armaceutic ceuticals als

• Total area of the park is 279 ha and 60%
• f these amount

t will be service ced d by the GoE and availed ed to intereste sted d investors

• It’s located in Addis Ababa, the capital of

the country ry

• Industri

trial cluster er/ special alizat ation - Pharma rmaceu ceuti tica cals

• As the pharmaceu

eutica ticals s sector r is the GoE’s priority sector, it’s endowed with tailor- made incentive ves Facts Kilinto to Industria rial Park

Governme vernment nt owne ned d upcoming ing indust stria rial l parks ks specia ialize lizes s on textile tile, , garmen ent, t, footwear wear and machin hiner ery

53

Komb mbolch cha Industri rial al Park Dire e Dawa Industry Park

Size: 75 Ha Number er of shed: 9 (two 11,000 m2 and seven 5,500 m2) Locatio ion: n: Kombolcha, Ethiopia Spec ecia iali lizatio ion: Textile and garment

Adama Industri rial Park Mekel elle e Industry ry Park

Size: 75 Ha Number er of shed: 15 (five 11,000 m2, six 5,500 m2 and four 3,000m2) Locatio ion: n: Mekelle, Ethiopia Spec ecia iali lizatio ion: Textile, garment and leather Size: 120 Ha Number er of shed: 19 (six 11,000 m2, nine 5,500 m2 and four 3,000 m2) Locatio ion: n: Adama, Ethiopia Spec ecia iali lizatio ion: Machinery, footwear, apparel and Textile Size: 150 Ha Number er of shed: 15 (four 11,000 m2, six 5,500 m2 and five 3,000 m2) Locatio ion: n: Dire Dawa, Ethiopia Spec ecia iali lizatio ion: Machinery, footwear, apparel and Textile

55

Ethiopi

• pia

a built lt sustain ainabl able e infrastructur rastructure e that suits globally bally renown

• wn

firms

Largest est cargo network rk and terminal al in Africa ca Africa’s first electric-pow power ered d railway ay Green en electri ricity generation support rts s industri rialization

• n

Specialized d industry parks s

Tha hank nk you

• u!