Integrated Agro-industrial Parks

Reducing time-to-market for investors in the agro-processing industry

To address the needs of investors in the agro-processing industry, the government has established three integrated agro-industrial parks (IAIPs) in Ethiopia. IAIPs are geographic clusters where industry players benefit from shared infrastructure, logistics and services to gain economies of scale; and exploit opportunities for bulk purchasing and selling, training courses and extension services.

The three IAIPs are located in regions with recognized potential both for agriculture production and for the industrial processing of agricultural products:

  • Burie IAIP in Amhara region
  • Yirgalem IAIP in the Sidama region
  • Bulbula IAIP in the Oromia region

To facilitate investment, the parks feature the following built-in infrastructure and systems:

  • Access roads
  • 50 MW power supply with a tariff rate of US$0.045/kwh
  • 12,000 square-meter/day water supply with a tariff rate of US$0.57/square-meter/month
  • Sewage and effluent treatment plants
  • Specialized infrastructure components such as cold storage units and quarantine facilities
  • Specialized storage and processing facilities
  • Park operation and management offices
  • Quality certification centers
  • Training centres
  • Health centres
  • Police station and fire brigade
  • One-stop shops

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Rural Transformation Centers: an easier way to source raw materials

As shown in the graphic above, each IAIP is located near at least one Rural Transformation Centre (RTCs), which act as a collection centre for investors seeking to source inputs for production. They are equipped with warehouses, pre-processing facilities, information centres and agricultural support services. The RTCs collect, sort, store and, in some instances, process agricultural outputs that are later transported to IAIPs. In addition, the RTCs provide access to SMEs that support investments inside the IAIP—including packaging, transport, and testing services.

Currently, one RTC is established near each IAIP (in Motta, Amhara; Shashemene, Oromia; and Bensa, Sidama). The government has plans to build additional RTCs (seven in Amhara, two in Sidama and five in Oromia).

Incentives for companies operating in IAIPs

The IAIPs offer a unique value proposition for investors looking to develop a profitable venture in Ethiopia. They offer the following incentives for investors in the parks:

  • Completed infrastructure
  • Tax incentives
  • Income tax exemption
  • Loss carry-over
  • Export tax exemption
  • Exemption from customs duty
  • Exemption from tax salary
  • Franco Valuta
  • Streamlined and expedited procedures
  • Export Credit Guarantee Scheme

Establishing businesses inside IAIPs

Investors looking to set up their ventures inside IAIPs can do so in two ways:

1. Lease ready-made sheds built in three sizes: 1,500, 2,500 and 3,500 square meters. Currently, the lease cost for sheds inside IAIPs is US$1.5/square-meter/month for foreign investors.

2. Build sheds on available lands inside IAIPs. Currently, the cost of leasing land for construction is US$1.2/square-meter annually.

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