A USD 121.7 million loan agreement which was concluded between the Ministry of Finance and Economic Cooperation and the International Development Association was ratified by the parliament. The Ethiopian House of People’s Representatives ratified the loan agreement which was signed in June, 2018 during its first assembly for the financing of competitiveness and job creation.
The USD 121.7 million grant will be used to complete Bole Lemi II and Kilinto Industrial parks and to start operational management after the parks commence operation. It will also be used to setup public-private partnerships.
Already operational, Bole Lemi is Ethiopia’s first industrial park developed by IPDC. Bole Lemi Phase 1 (156 hectares) started operations in 2014, with all pre-erected factories already rented-out to more than 12 different corporations. Bole Lemi Phase 2 (186 hectares) is currently being developed in collaboration with the World Bank Group while Kilinto is currently being developed as IPDC’s second park in Addis Ababa. With a total size of 337 Ha, Kilinto will be a mixed-use park and the number one destination for manufacturers in agro-processing, pharmaceuticals, electric and electronics products, and wood and furniture.
The International Development Association (IDA) is the part of the World Bank that helps the world’s poorest countries. Overseen by 173 shareholder nations, IDA aims to reduce poverty by providing loans (called “credits”) and grants for programs that boost economic growth, reduce inequalities, and improve people’s living conditions.
IDA complements the World Bank’s original lending arm—the International Bank for Reconstruction and Development (IBRD). IBRD was established to function as a self-sustaining business and provides loans and advice to middle-income and credit-worthy poor countries. IBRD and IDA share the same staff and headquarters and evaluate projects with the same rigorous standards.
IDA is one of the largest sources of assistance for the world’s 75 poorest countries, 39 of which are in Africa, and is the single largest source of donor funds for basic social services in these countries.
IDA lends money on concessional terms. This means that IDA credits have a zero or very low interest charge and repayments are stretched over 30 to 38 years, including a 5- to 10-year grace period. IDA also provides grants to countries at risk of debt distress.
In addition to concessional loans and grants, IDA provides significant levels of debt relief through the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI).
In the fiscal year ending June 30, 2018, IDA commitments totaled $24 billion, of which 21 percent was provided on grant terms. New commitments in FY18 comprised 206 new operations. Since 1960, IDA has provided $369 billion for investments in 113 countries. Annual commitments have increased steadily and averaged about $20 billion over the last three years.
IDA is a multi-issue institution, supporting a range of development activities that pave the way toward equality, economic growth, job creation, higher incomes, and better living conditions. IDA's work covers primary education, basic health services, clean water and sanitation, agriculture, business climate improvements, infrastructure, and institutional reforms.
Source: Addis Fortune, Industrial Parks Development Corporation’s Official Website, and World Bank’s Official Website (http://ida.worldbank.org/about/what-is-ida)
