Two years in the making, the project to erect four major integrated agro industrial parks in Ethiopia has progressed to the next level with the government lately deciding to channel the 12 billion birr annual budget earmarked for the Sustainable Development Goals (SDGs) to the construction of the parks.
Mebrahtu Meles (PhD), state minister of Industry, told reporters on Friday that the government has decided to redirect all the SDGs funds to finance the development of the agro parks that are set to be built in the Amhara, Oromia, Tigray and Southern regional states. In addition to redirecting the SDGs budget, the recently announced 41 billion birr lease financing scheme the Development Bank of Ethiopia (DBE) has allocated to small and medium enterprises was also set aside for the development of the integrated agro parks.
The government, according to the state minister, is seeking for more resources to help build the 13 more similar parks across the country in the future. That said, the Italian government has pledged to provide some 100 million dollars to the project. A couple of international institutions are aligning with the government’s plan to offer more resources, Mebrahtu said on the on occasion.
The parks, which will be owned by regional governments, will require a total budget of USD 1.5 billion and so far three regional states with the exception of the Oromia Regional State have initiated the project by securing plots and establishing governing institution. The Oromia Regional State has been lagging behind to initiate the project due to the recent deadly political unrest intensified in that region.
According to Mebrahtu, the size of the parks will vary between 250 to 1,000 hectares. The title deeds of the four agro parks have already been secured, the state minister said. The government is tasked to develop the basic “horizontal infrastructures” that includes: roads, electricity, telecoms, water supplies, landscaping works and the likes, which according to crude estimations will cost the government 1.5 billion dollars. The actual construction work on the manufacturing sheds is left for manufacturers who will be required to allocate 25 percent equity to secure a spot at the park. The remaining 75 percent of the required finance will be availed via banks for the potential anchor investors, the state minister noted. In addition to the private sector’s involvement, the government contemplating to pull in endowment enterprises, Mebratu said.
Back in November, the government together with the United Nations Industrial Development Organization (UNIDO) has held the first agro parks development investment forum, which according to Prime Minister Hailemariam Dessalegn will be an annually event to be held in Addis. Mahindra Group, the Indian consulting firm is contracted to design the four agro parks and currently three have been finalized. The parks are expected to be readied for investors by the end of September