Ethiopia announced the incentives it will be providing for local investors who will engage in the Hawassa Industrial Park.

According to the Special Advisor to the Prime Minister and Chairman of the Industrial Parks Development Corporation, Arkebe Equbay, there are different incentive packages prepared for local investors. One of the incentives is two types of loan arrangements. The first loan arrangement is where 75 percent loan will be provided for the investor while he/she will have to secure the rest 25 percent. The other loan scheme is where the investor will only have to secure 15 percent of capital needed and the rest 85 percent will be covered by loan.

According to Arkebe, the loan arrangements will be provided by Development Bank of Ethiopia and Commercial Bank of Ethiopia.

The loan is said to be released within 30 – 60 days after feasibility study is completed and the amount of investment capital as well as type of machinery and their suppliers are identified.

In addition to the loan arrangement, Arkebe explained, employees chosen by the companies would be sent abroad to acquire skills and technical support. 85 percent of such cost will be covered by the government for the first year while for the second year it will be only 75 percent of the cost that will be covered by the government. For the third and fourth years, it will come down to 50 percent and 25 percent respectively.

Tax holiday of 10 years is also part of the incentive package for investors that will export all of their products. Regarding opening letter of credit (LC), the fee has been reduced to 0.5 percent from 3.5 percent.

According to Fana Broadcasting Corporate, products of the local investors are expected to meet international companies’ quality as well as quantity standards in 3 years time.

Source: Fana Broadcasting Corporate