This summary covers an investment by Mr. Dirieh Ali Mawel and Mrs. Samya Houssein Addillahi, two Djiboutian nationals (the Investors), into the project enterprise incorporated in Ethiopia, Alvima Import & Export PLC (the Project Enterprise), a company incorporated in Ethiopia engaged until now in food trading.
The project entails the establishment of a flour processing and pasta manufacturing plant that will produce flour as well as high-quality pasta products primarily in Adama town, 90 km South East of Addis Ababa, Ethiopia. The plant will have a daily manufacturing capacity of up to 66 tons of pasta and up to 95 tons of flour.
The Investors have applied for MIGA guarantees covering up to $6 million of equity investments into the Project Enterprise. The guarantees will have a term of up to 10 years and will provide coverage against the risks of expropriation and war and civil disturbance.
The project is located in an industrial zone in the city of Adama which is 90 Km South East of Addis Ababa. The pasta processing plant is currently under construction and is expected to be completed in the coming months. The plant will rely on bore holes for water and city power, but will have backup generators in case of black outs. Communities are some distance from the plant and have been consulted regarding the potential impacts of the project for which they have a positive opinion.
The project is a category B under MIGA’s Policy on Environmental and Social Sustainability. The Environmental and Social Impact Assessment (ESIA) identified potential environmental and social impacts and proposed mitigation measures including those related to air pollution (dust), food contamination, solid and liquid waste management, workers and communities health and safety, supply chain risks, especially in relation to child and forced labor, and issues related to the use of security guards. An environmental and social management system for the project (including environmental and social management plans, procedures and policies) is currently being developed based on the recommendations presented in the ESIA. An Environmental and Social Action Plan (ESAP) has been developed and agreed with the client.
The project is expected to have a positive impact on Ethiopia’s economy by creating jobs for the local population, contributing to the development of the agricultural sector through contract farming (for wheat procurement), and creating import substitution opportunities through the domestic production of currently imported pasta by the Project Enterprise.