Gov’t in midst of another attempt at selling off sugar estates

Ethiopian Investment Holdings (EIH) reports the state-owned enterprises under its wing amassed 901 billion birr in total revenues over the first half of the fiscal year.

The figure is equivalent to USD 5.1 billion and stands on par with 20 percent of the country’s total tax revenue over the reporting period, according to Brook Taye, CEO of Ethiopia’s first sovereign wealth fund, who made the comments at a networking event organized by the European Chamber in Ethiopia on January 23, 2025.

EIH serves as the government’s strategic investment arm, overseeing and managing the nation’s state-owned enterprises. It has full ownership of state-owned enterprises such as Ethiopian Airlines, the Commercial Bank of Ethiopia, Ethio telecom, the Ethiopian Insurance Corporation, Ethiopian Shipping Lines as well as minority stakes in joint ventures such as AMCE.

EIH collects dividends from 40 companies under its management.

“This year alone, we paid 5.3 billion birr in the first quarter. We are expected to contribute a total of 14 billion birr to the national budget, and whatever remains becomes our investment capital. We deploy this capital to ensure that companies entering the market have no difficulty accessing investment capital,” the CEO said. “We aim to be a de-risking partner for investors—whether through in-kind contributions or equity investments, we are here to support them when they seek investment.”

Brook told European investors at the event that for most companies entering Ethiopia, the biggest challenge is navigating the local legal landscape, including issues with customs and various government institutions. He said EIH is ready to help investors through the process.

“If an investor seeks 3,000 hectares of land for a project for instance, they no longer need to navigate various regions to find suitable land with the right agro-climatic conditions. Instead, EIH utilizes its comprehensive database to input specific parameters, identify the appropriate land, and ensure the investor can focus entirely on launching their business,” said the CEO.

He indicated that EIH can invest in equity, allowing it to support investors who typically bring in foreign exchange, while EIH handles the birr component, utilizing its own capital. The CEO emphasized that this is not debt financing, but rather equity investment.

Brook also provided an update on Ethio telecom’s partial privatization process, the offering for which is set to close in mid-February, and disclosed plans to fully privatize eight sugar estates under the Ethiopian Sugar Industry Group.

The privatization of sugar estates has been attempted several times before, with each attempt failing due to a lack of investor interest and concerns about security and other factors.

“Meanwhile, companies such as the insurance, shipping, and printing firms are exploring the possibility of listing on the stock exchange,” said Brook.

He noted that foreign investors will be permitted to participate in the exchange market, with a quota of up to 30 percent.

According to an IMF report issued on January 29, 2025, reviewing the progress on the implementation of the IMF program agreement reached with Ethiopia in July 2024, the government has pledged to embark on restructuring electricity tariffs and involving the private sector in the railway and sugar industries.

“We have relaunched the privatization process for nine sugar estates to attract private sector investment to exploit Ethiopia’s sugar industry potential and help recoup the large public investments in the sector. Direct negotiations on eight sugar companies are underway, with a view to transfer of assets to successful private investors by end-December 2025,” reads the report.