Business Investment Holdings keen on Addis Ababa hotels privatization
May 4, 2024
Heads of the Ethiopian Investment Holdings (EIH) say they are close to realizing long-lived government ambitions to sell off stakes in the Addis Ababa Hilton, Ghion, and Filwuha hotels to unidentified foreign investors.
The sovereign wealth fund is eyeing cooperative investment ventures with foreign investors in agriculture, hospitality, manufacturing, and infrastructure development, according to Abdurehman Eid, CEO of EIH.
He told The Reporter that EIH is looking for investors with “better know-how and understanding” in managing certain businesses, including underperforming state-owned enterprises (SOEs) under its wing. Abdurehman says the fund is seeking to attract investment in existing businesses as well as new investment.
“We conducted an asset valuation so that we own whatever our asset value is and they [foreign investors] will own whatever investment they bring in,” the CEO said. “A good example is the hotels. We are trying to partner with investors.”
Hilton Addis, Ghion Hotel, the Spa Service Enterprise (Filwuha), and Genet Hotel are four state-owned hospitality establishments in the heart of Addis Ababa that EIH would like to solicit foreign investment in. Abdurehman says negotiations for investment in all but Genet Hotel are in progress, but declined to name the potential investors.
EIH is also considering investment partnerships on agricultural projects on 20,000 hectares in the Tana Beles area of the Amhara region, but security issues are a serious concern.
“Most of the negotiations have been finalized, but because of the security issues, we are waiting until things improve,” the CEO said. He foresees a final agreement this month, although the armed conflict in the Amhara region has shown no signs of de-escalating.
He disclosed the fund has signed preliminary agreements with firms based in the United Arab Emirates (UAE) for the construction of oil depots in Dire Dawa and Dukem, as well as other projects. Negotiations, however, are still going, according to Abdurehman.
The CEO says the fund has signed agreements for more than a dozen co-investment projects, but a printing enterprise deal with a Japanese firm is the only one that has achieved anything tangible so far. EIH signed an agreement in December with Toppan Gravity for the establishment of Toppan Gravity Ethiopia, a security printing company.
EIH and five SOEs under its wing have also acquired a 25 percent stake in the upcoming Ethiopian Securities Exchange (ESX).