Ethiopia Turaco FMCG Project

Project Description

On September 30, 2021, MIGA issued guarantees for US$34.1 million in total against the risks of Expropriation and Transfer Restriction to cover Turaco for its equity investments and shareholder loans into Health Care Food Manufacturers Share Company (HCFM) and ZAK Ethiopia Manufacturing and Trading PLC (ZAK). The tenors of the MIGA guarantees will be 10 years for the equity coverage and 7 years for the shareholder loan coverage. MIGA’s risk exposure under the guarantees will be shared with the MIGA Guarantee Facility (MGF) of the IDA-Private Sector Window (PSW).  ^[1]

On December 24, 2024, MIGA issued a guarantee for US$17.2 million against the risks of Expropriation and Transfer Restriction to cover Turaco’s equity investment in Articrafts Private Limited Company for a tenor of almost 7 years. MIGA’s risk exposure under the guarantee is shared with the MGF PSW.

The project involves supporting (i) the existing operations of HCFM and ZAK, which comprise an edible seed-oil refining facility and laundry soap & detergent manufacturing, respectively, and (ii) the development of a  200tpd solvent extraction plant (SEP), operated by Articrafts, all of which are located in Ethiopia (the Project).

HCFM, ZAK and Articrafts are ultimately wholly owned by Turaco of Mauritius through its intermediate holding companies. HCFM and Articrafts manufacture and distribute edible sunflower oil, and soya bean oil at their processing facilities in Addis Ababa under the brand name of ‘Tena’. ZAK produces laundry soaps and detergents and personal care cleaning products including handwash and body soaps, under the brand names of ‘555’ and the newly established ‘Aura’ and “Progard” brands. 

Environmental Categorization

The Project is category B under the MIGA’s Policy on Environmental and Social Sustainability. Click here to view the environmental and social review summary.

Development Impact

The foreseeable positive development impacts of the project are as follows:

• Establishment of sustainable value chain: The Project is expected to locally procure oil seeds for the new oil extraction plant to the levels of around US$ 12 million annually once the facility reaches 90% capacity. The Project will purchase the oil seeds from aggregators who in turn purchase them from local farmers and cooperatives, therefore improving livelihood of smallholder farmers and creating new market opportunities for them.
• Import substitution: About 90 percent of edible oils consumed are imported products, and domestic soap production only meets 25 percent of the soap demand in Ethiopia. The Project will support import substitution by enabling the local production of edible oils and soaps.
• Business and sector development through demonstration of new technologies: The planned new solvent extraction plant for the edible oil business will introduce new technology into Ethiopia. It will enable HCFM and Articrafts to convert oil extracted from local seeds into finished goods products, and also into an improved defatted soya cake by-product which is in line with international market standards and of export-quality.
• Employment generation: HCFM, ZAK and Articrafts currently employ more than 500 people of which 42 percent are women. The project is also expected to create a number of direct additional jobs and have a positive impact on indirect employment generation, local skill development, and gender.

^[1] The shareholder loans expired in accordance with their terms as of June 14, 2025