The Ethiopian Shipping and logistics Services Enterprise is looking for external lenders in order to procure two bulk cargo ships in an effort to expand its services to the growing number of importers and exporters in Ethiopia.
The Enterprise, which currently owns 11 ships, has not made such a purchase for the last decade. Transporting 11 million tons of cargo per year, the Shipping giant has already started discussions with lenders to secure finances for the procurement of the ships, though a little has been achieved so far.
“Thanks to our good credit rating, it is not difficult for us to get a commercial loan. But since the interest rate is very high and against the policy of our government, we are looking for a soft loan with a lower interest rate and longer repayment and grace period,” said Roba Megersa, CEO of the Enterprise.
By the end of last year, a project office was established to oversee the procurement process of the ships. Even though there was a plan to finalize the bidding process and hire a company that would build the ships this year, it has not yet materialized due to financial constraints.
“Besides chartering ships in a lease arrangement, we want to have our own ships that can handle bulk items,” Roba added.
The Enterprise, which handles 60 percent of Ethiopia’s imports annually, grossed a profit of 2.5 billion Birr in the last fiscal year.
During the first edition of the Growth and Transformation Plan, which was between 2010/11 and 2014/15, the Enterprise procured nine ships, two of which were oil carriers while the rest were cargo ships. The Enterprise spent USD 293 million on the ships, of which 80 percent was secured from Chinese Ex-IM bank.
“We have successfully paid our loans. So we hope to get finance for the ships in a short period of time,” Roba said.