Incentives for local investors engaging in Hawassa industrial park announced

Addis Ababa, April 22, 2016 (FBC) –The government of Ethiopia has today announced the incentives it would offer to local investors interested to engage in Hawassa industrial park.

Dr Arkebe Equbay, special advisor to the Prime Minister and Board Chairman of the Industrial Parks Development Corporation, briefed the investors on the incentives today

He said various incentive packages were prepared by the government for local investors who are keen to engage in the industrial park.

He said the government has prepared two types of loan arrangements – 75/25 arrangement (75% by the government and 25% by investors) and 85/15 arrangement (85% by the government and 15% by investors).

The loan will be released within 30-60 days after a feasibility study is completed and the amount of investment capital as well as type of machinery and their suppliers are identified, it was indicated.

The loan needed for the companies will be readied at the development and commercial banks of Ethiopia, Dr Arkebe indicated.

He further said employees chosen by the companies will be made to get skill and technical support abroad, with the government covering 85 percent of the cost in the first year, 75 percent in the second, 50 percent in the third and 25 percent in the fourth year.

The companies will entirely export their products to the global market and get a ten-year tax holiday, it was noted.
The fee required to open a letter of credit (LC) is also reduced to 0.5 percent from 3.5 percent in the past, he said. They will also be offered a special discount to export their products.

The companies are expected to come to level with international companies within three year in terms of quality and quantity of products.

Companies that will fulfill these requirements will be provided with additional sheds. On the country, those who failed to meet the measurement will be expelled from the park.

In addition to local investors, potential investors from the U.S., India, Sri Lanka, Indonesia, Hong Kong and China were chosen to engage in the park.

Built on 130 hectares of land, Hawassa industrial park is expected to go operational within the coming two months.

Some 20 percent of the park will be occupied by local and the remaining 80 percent by foreign investors.