Under Article 4 of the approved investment policy, EIH has identified 8 priority sectors in line with the key goals of the current 10-year National Development Plan. Sub-article 4.2 indicates that EIH will develop an investment thesis for each identified sector to pinpoint constraints that can be addressed through investments. The following sector overviews highlight EIH’s role in resolving these constraints and narrowing down sub-sectors and investment projects that align with the 10-year National Development Plan. EIH aims to balance strategic and commercial goals, ensuring each project fulfills both simultaneously.
The investment process adheres to four key criteria to comply with the investment policy:
Identifying EIH’s strategic objectives within the development plan.
Focusing on the binding constraints or root causes within each sector.
Determining EIH’s role in resolving these constraints, whether through de-risking, financing, project development, strategic partnerships, or optimization.
Solving economic challenges through investments while maintaining commercial principles.
Ethiopia, with a rapidly growing population exceeding 110 million, has over 36 million hectares of arable land, less than half of which is currently cultivated. Additionally, more than 3.7 million hectares are suitable for commercial farming. The main cereal crops—Teff, wheat, maize, sorghum, and barley—cover 12.2 million hectares (88%) of cultivated land, yet current production volumes do not meet domestic demand. The 10-year development plan’s main agricultural objectives are to:
By measuring the success of these objectives, the development plan has identified targets to be met over the next 10 years which EIH can contribute to. Thus, in line with the targets set in the plan, EIH’s strategic objectives are to contribute to the achievement of the following targets:
Has a significant market size and promising growth potential.
Strives to produce fertilizer from natural gas and potash where we are onboarding partners interested to collaborate with EIH.
This sector has a robust market size exceeding $1.5 billion.
Staples with ever-increasing demand driven by population growth.
The most attractive segment due to its ripple effect on poultry, dairy, and brewing industries.
Based on these sub-sectors, EIH is pursuing different agricultural investments. For instance, the Integrated commercial agriculture and agro-processing project.
The project focuses on three commodities - rice, oil seeds, and cotton with three integrated agro-processing facilities.
Other agriculture investments in the pipeline include:
Ethiopia’s logistics sector stands as a pivotal element in the nation’s journey towards economic prosperity. Despite the geographical challenge of being landlocked, the sector’s development is crucial for Ethiopia’s continued growth. Ethiopia has ambitions to leap to the 40th rank in the Logistics Performance Index, reflecting a commitment to enhancing its logistics capabilities. EIH plays a transformative role in the logistics domain, particularly through its associations with the Ethiopian Airlines Group (EAG) and Ethiopian Shipping and Logistics (ESL).
Through strategic partnerships and policy reforms, EIH aims to revamp the logistics sector into a competitive and efficient driver of national wealth. To adeptly manage current and anticipated trade volumes, Ethiopia recognizes the need for further investment.
EIH’s role in this regard is a two-fold approach of optimizing existing assets and business units as well as developing and investing in new infrastructure projects.
The Ethiopian Government recognizes the importance of collaborating with private entities to infuse the sector with external expertise, experience, and capital.
Ethiopia’s economic growth, marked by an increasing trade flow and infrastructure projects, has spurred significant demand for logistics. The overland transport system is predominantly reliant on road transport, with trucks carrying the majority of goods. However, rail transport also plays a crucial role in supporting the country’s logistics network.
Ethiopia’s dry port infrastructure is crucial to the nation’s trade. Among the eight existing dry port facilities, Dire Dawa, Kality, and Modjo serve as the primary inland ports for container and general cargo clearing.
The Ethiopian aviation sector is poised for a transformative leap with the introduction of new investment regulations. These changes are set to redefine market access, allowing private operators to venture into domestic services.
Based on these sub-sectors, EIH is pursuing different Logistics and Transport investments. Investments in the pipeline include:
Ethiopia has a unique and resource-rich landscape for electricity generation. With its vast volcanic plateau, abundant rivers and lakes, and year-round sunshine, Ethiopia has the potential to generate 60,000 MW of electric power. Hydropower alone holds immense potential, with the capacity to produce 45,000 MW from the country’s significant water resources. Additionally, Ethiopia’s position along the Great Rift Valley presents a geothermal energy potential of 10,000 MW, while solar energy offers significant prospects for future development.
EIH aims to contribute to the achievement of the following key targets in the development plan for the energy sector:
EIH plays a dual role in the energy sector. Through our ownership of Ethiopian Electric Utility (EEU), we hold the responsibility of ensuring nationwide electricity distribution. Additionally, since our inception, we have actively explored Public-Private Partnership (PPP) opportunities with different investors. These outreaches allowed the formation of partnerships with various investors across energy sub-sectors. EIH actively seeks partnerships with diverse investors in the renewable energy sector.
Provides the most dependable source of energy
The most cost-effective in terms of development
Attracting investment in grid expansion
Offers a balanced dependability and development cost
Interest in being off-takers of excess energy produced.
EIH is currently pursuing several investment projects in the energy sector:
According to the 10-year Development Plan, the Ethiopian government aims to increase the GDP contribution of the manufacturing sector to 20.6% by 2030. The major focus areas of the manufacturing industry development plan include:
EIH plans to play a strategic role in achieving these objectives by contributing to the following targets:
Involves the production of pulp from prospective raw materials (e.g., eucalyptus, bamboo, bagasse, banana) and is currently at the concept note stage.
An emerging space in the country with only smaller active players, launching a pilot project in the Special Economic Zones (SEZs).
Attracting foreign investors who want to leverage Ethiopia’s energy infrastructure and labor to export their goods, taking advantage of the incentives in SEZs.
Projects to upgrade the manufacturing plants of CIC to produce strategic products like caustic soda, aluminum sulfate, and pesticides, in alignment with vertical interventions planned on STP
Creating strategic, operational, and financial synergies among EIH portfolio companies engaged in the paper-producing and printing sector.
Exploring investment modalities to optimize and increase the under-utilized rubber plant, with the potential to boost eco-friendly tires, tubes, gloves, balloons, and other products.
The real estate sector in Ethiopia has experienced significant growth in recent years, driven by urbanization, population growth, infrastructure development, and increasing investment in the construction industry. According to National Bank annual reports, the GDP value of the sector rose to 103 billion ETB in 2021/22 from 57 billion ETB in 2011/12, an increase of more than 80%. The sector’s contribution to GDP stood at 4.5% in 2021/22, with one of the highest growth rates among major economic activities at 9%.
The principal objectives of the urban development plan are to develop cities and towns in a way that facilitates the development of both urban and rural areas in a coordinated manner, and to create a system by which cities and towns are managed in a participatory and decentralized way. The key target is to mitigate the existing challenges of the imbalance between the demand and supply of residential housing by involving all stakeholders and launching various types of housing programs. The development plan aims to raise the ratio of housing demand in urban areas from by building more than 4.4 million houses over the next 10 years.
The 10-year development plan emphasizes building an effective health system based on prevention and control methods. This includes activities to mitigate maternal and child mortalities, prevent communicable and noncommunicable diseases that may cause death or illness, and protect citizens from fatal health incidents.
The main targets to achieve the health objectives include:
EIH’s Strategic Objectives in the Health Sector
EIH aims to achieve these objectives by developing strategic investment projects focused on ensuring that services and products critical for primary to quaternary health care service providers are available. By addressing these key areas, EIH will contribute to building a robust health system that supports the well-being of all citizens.
The objectives of the mining and petroleum sectors in the development plan are to identify Ethiopia’s mineral and petroleum resources and, by developing and ensuring equitable utilization, to contribute to the structural transformation of the economy and raise national wealth.
The development plan has identified the following key targets:
To achieve this plan, the government aims to increase the volumes and efficiency of currently mined commodities as well as develop new mining projects
EIH’s strategic objective in the Mining Sector
EIH aims to develop key value chains across the identified commodities listed above. By focusing on these areas, EIH aims to support the government’s goals and contribute to the sustainable development of Ethiopia’s mining and petroleum sectors.
Significant deposits include Lega Dembi, Tulu Kapi, and Sakaromines.
Found in the western part of the country, used in various industrial applications.
Large reserves in the Tigray region, used in electrical equipment, building construction, and transportation.
Significant reserves in the Afar region, used as fertilizer.
Large reserves in the Tigray and Amhara regions, used in steel production.
Significant reserves in the Southern region, used for electricity generation.
Rich deposits of opal, emerald, sapphire, and garnet, with opal deposits in Wolloand Shewa in the Amhara regions.
Main deposits in the Ogadenregion.
Tantalum: One of the largest reserves in the world
By-products from sugar factories
Including limestone, gypsum, clay, pumice, marble, granite, sandstone, diatomite, bentonite, sulphur, feldspar, phosphate, dolomite, and quartz.
Ethiopia is undergoing rapid technological transformation. The government has identified the technology and innovation sector as a priority for driving economic growth and social development. The main focusareas of innovation and technology development in the 10-year plan include:
The government’s Digital Ethiopia 2025 strategy underscores its ambition to transform Ethiopia into a digitally empowered society. This strategy focuses on expanding digital infrastructure, fostering innovation, and promoting digital literacy across the population. This push towards digital transformation is expected to facilitate economic diversification and integration into the global digital economy.
EIH’s Strategic Objectives in the Technology Sector
In line with this direction, EIH’s strategic objective for the technology sector is to act as a catalyst to ensure the realization of the digital economy. This entails developing projects that enhance the infrastructural and financial needs for the development, launch, and use of digital products. This will mainly be through the development of technology-focused investments and funds.
EIH encourages the development and scaling of tech-enabled innovations that address local challenges. In partnership with UNDP and other stakeholders, EIH aims to support startups working on solutions in fintech, agritech, healthtech, and e-commerce. By providing access to funding, mentorship, and market opportunities, EIH aims to create an enabling environment for innovative solutions that can drive economic growth and social progress
EIH will also invest in KYC/Authentication service provision to enable startups to undertake the right due diligence to provide their services.
In recent years, the Government of Ethiopia has liberalized different sectors, especially telecom and finance, shifting towards a private-sector-driven economy. This has created a competitive landscape in infrastructure and business environment, making Ethiopia a favorable destination for BPO service providers. The private sector has utilized this opportunity well and has created the Ethiopian Outsourcing Association (EOA), which represents offshore outsourcing services and service providers and works with policymakers to promote Ethiopia as an outsourcing destination.
Data center management is emerging as a critical focus area for Ethiopia’s digital transformation. As the demand for data storage and processing grows, EIH is investing in the development and management of data centers to support the digital infrastructure. These investments aim to enhance data sovereignty, improve data security, and provide reliable hosting services for businesses and government agencies.
Develoing Ethiopian tourism resource is the objective of the sector in the 10-Year Development Plan through:
EIH’s Strategic Objectives in the Tourism and Hospitality Sector
EIH aims to act as an enabler to achieve these targets by developing projects around key areas:
Investment Project
EIH’s focus inthe tourism and hospitality sector includes upgrading and developing star-rated hotels in partnership with the private sector and creating diverse products to attract tourists.
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