Government has invited buyers to submit their expression of interests to privatize eight state-owned sugar factories.
In a bid to transform the sector, the government of Ethiopia has invited both international and domestic investors to participate in the tendering of 8 state-owned sugar enterprises — Omo Kuraz 1, Omo Kuraz 2, Omo Kuraz 3, Omo Kuraz 5, Arjo Dedessa, Kessem, Tana Beles, and Tendaho (together with the “Sugar Enterprises.”)
As part of the Federal Democratic Republic of Ethiopia economic reform strategy, the government of Ethiopia is committed to ensuring efficient use of national resources by shifting towards a competitive market structure, with a greater role for the private sector in the economy, Ministry of Finance (MoF) said in a statement.
To this end, the government of Ethiopia initiated a holistic sugar sector reform aiming at increasing private sector participation in the ownership and control of sugar companies to sustain rapid and inclusive economic growth by laying the ground for economic transformation that leverages the increasing role of the private sector.
The proposed transaction is aimed at improving competitiveness and increasing sugar production to meet domestic demand. This will save Ethiopia from spending substantial foreign exchange used in importing sugar.
The improved performance of the sector will in turn increase incomes and improve the standard of living for the population that relies on sugar cane plantations as the main source of livelihood in sugar-growing regions of Ethiopia.
The transaction will not only reduce the future reliance on public financing but also enable the sugar enterprises to raise additional capital to support projected expansion and modernization.
In addition to meeting domestic sugar demand, the transaction will create opportunities for refined and raw sugar exports given the good existing climate for growing cane in Ethiopia enabling foreign currency inflows into the country. The proposed transaction presents an excellent investment opportunity to interested investors to acquire up to 100% of the Sugar Enterprises, most of which are newly constructed factories with built-in trunk infrastructure, abundant water, land resources, and excellent cane growing agro-climate conditions. In addition to sugar production, the enterprises engage in the production of ethanol and electricity for internal use and to supply to the national grid.