Ethiopia opens aviation, energy for Kenyan investors

The Government of Ethiopia has invited Kenyan companies to invest in Ethiopia’s energy and aviation sector.

“…The opportunities are now wide open for Kenyan companies to invest in both energy and aviation in Ethiopia,” Prime Minister Abiy Ahmed of Ethiopia, said this morning opening Kenya – Ethiopia Trade and Investment Forum in Addis Ababa.

Like banking and telecom, the aviation and transport sector of Ethiopia has not been open for foreign investors so far. It is not clear yet if this is liberalization of the sector for all foreign investors as part of the recent move of Ethiopian government or a special treatment for its neighbor Kenya like Ethiopia treats Djibouti.

In 2012 Ethiopia and Kenya have signed special status agreement which involves four major areas – infrastructure, investment, and trade and food security.

In his remarks PM Abiy highlighted the opening up of the country and the economic reforms underway as a catalyst for strengthening Ethiopia -Kenya trade relations. “…Similarly great potential awaits Kenyan investors to explore our agro-processing, textiles and garment manufacturing industries throughout the country,” PM Abiy said.

It is recalled that after coming to power the reformist Prime Minister Abiy has announced his government’s decision to partly privatize mega state enterprises such as Ethiopian Airlines, Ethio Telecom, Ethiopian Electric, shipping lines and sugar projects. The move is followed by statement of PM Abiy about the need to liberalize the market such as telecom and open for competition.

This week, a Kenyan power company KenGen has also secured geothermal project in Ethiopia along with two Chinese companies.

The business delegation representing 150 Kenyan companies led By President Uhuru Kenyatta is attending the two days Forum along with some 300 Ethiopian company representatives.

Addressing the Forum, President Uhuru indicated that trade and investment by the private sector of the two sides can help to grow the domestic and regional markets as well as attract foreign direct investments.

“I have a very high expectation that this engagement will yield positive results that will accelerate trade, investment and growth of our two great nations,” President Uhuru said, explaining the opportunities Kenya offers to Ethiopia investors.

Named after a county in Kenya, Lamu, the ambitious $25 billion LAPSSET project was launched by the heads of the three countries in March 2012.

Commenting this morning on LAPSSET, Prime Minister Abiy said: “We need to strengthen our joint pursuit of development of the Lamu Port and the construction of the Lamu, South Sudan – Ethiopia transport corridor.”
LAPSSET project consists of the following seven key infrastructure projects:
– A new 32 Berth port at Lamu (Kenya);
– Interregional Highways from Lamu to Isiolo, Isiolo to Juba (South Sudan), Isiolo to Addis Ababa (Ethiopia), and Lamu to Garsen (Kenya), Crude Oil Pipeline from Lamu to Isiolo, Isiolo to Juba;
– Product Oil Pipeline from Lamu to Isiolo, Isiolo to Addis Ababa;
– Interregional Standard Gauge Railway lines from Lamu to Isiolo, Isiolo to Juba, Isiolo to Addis Ababa, and Nairobi to Isiolo;
– Three International Airports: one each at Lamu, Isiolo, and Lake Turkana;
– Three Resort Cities: one each at Lamu, Isiolo and Lake Turkana; and
– The multipurpose High Grand Falls Dam along the Tana River.

President Uhuru on his part stated that his government is committed to realization of LAPSSET. “The LAPSSET project brings great promise to transform our countries and improving the living conditions of pour people,” he said.