ETHIOPIA – The federal government of Ethiopia is set to launch about a dozen large-scale irrigation projects under the public-private partnership agreements, estimated to cost 2billion Birr (US$62.8).
The National Irrigation Task Force, comprised of members from the ministries of Finance and Water, Irrigation & Electricity as well as the Office of the Prime Minister, plans to identify 13 potential irrigation projects, reports Addis Fortune.
The task force, under the supervision of the Prime Minister, has been working on the scheme for the past nine months.
It is currently reviewing these proposals including Tendaho, Kesem, Erer, Anger, Golocha, Keto, Megeche, Chacha, Gidabo, Koga, Raya, Meki-Zeway, Ada-Becho, Ribb and Kobo.
The projects intend to increase harvests to substitute for imported food items, dispense agricultural inputs to the agricultural industrial parks, export agricultural products and to improve the lives of farmers, according to Michael Mehari (PhD), commissioner of the Irrigation Development Commission.
“It aims to take a step forward toward the long-term course of action to revamp domestic production,” Michael told Fortune.
For the current fiscal year, the government has budgeted 14.6 billion Br (US$458m) for irrigation, a significant increase from the 8 billion Birr (US$251.3m) allocated in the previous fiscal year.
“This shows the government’s commitment to the development of irrigation,” said Michael.
Out of the 13 projects, the Ministry of Water, Irrigation & Electricity wants to see the launching of two of them as public-private pilot projects.
The technical pre-feasibility work of the projects has been forwarded to the Task Force by the Commission to comprehend the viability of the projects, who are currently reviewing them.
The Office of the Prime Minister, which chairs the task force, has awarded Mckinsey & Company a contract to conduct a study and design a work plan for a bankable transaction outline, which will focus on how to bring the projects to yield optimal returns by generating sufficient cash flow.
The duo has also outlined two significant impediments: commercial and political risks with respect to making the projects profitable and orchestrate a bankable financing solution to take two years.
McKinsey, with the Task Force, has presented innovative solutions to attenuate these risks and develop robust business cases to the task force.
Priority is given to projects that are considered brownfield investments i.e. complete or partial work done, but are not productive such as Tendaho whose irrigation scheme and the dam is completed but has not started production yet.