The Public Private Partnership: Participation of Foreign Investors

By Dagnachew Tesfaye, Partner at DMLF

The participation of the private sector is recognized as an important aspect in the development of infrastructure projects. Therefore to select projects and award such projects to the private sector, the Ethiopian government has come up with a special proclamation for such a purpose namely the Public Private Partnership Proclamation No 1076/2018. To implement this Proclamation, a directive has been issued namely A Directive Issued to Implement Public Private Partnership Directive No 55/2010/2018. The Investment Proclamation No 1180/2020 also recognizes PPP as vehicles for investments that foreign investors participate  jointly with the government of Ethiopia by way of Public Private Partnership. The PPP Directorate General is tasked with identifying projects, selecting private sector candidates that may participate in PPP or receive investment proposals submitted by any private investor intending to invest jointly with the government. The PPP Board shall follow PPP Proclamation and Directive for decision and upon approval designate a public enterprise or establish a project company to invest as partner in the joint investment.

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Highlights of the New Ethiopian Investment Incentive Regulation

By Mahlet Mesganaw, Partner at DMLF

The Ethiopian government has issued Council of Ministers Investment Incentive Regulation No 517/2022 (the Regulation hereafter) to be effective from the date of publication in the Federal Negarit Gazette. The Regulation contains six parts and a schedule( Investment Areas and Income Tax Incentives Schedule). The first part of the Regulation covers definitions and scope of the Regulation. As such the Regulation extends to  investment areas eligible  for incentives including mining, petroleum and geothermal sectors. The second part of the Regulation deals with income tax exemption incentives. Such incentives are available for  investors from the date of obtaining business license or from the date of expansion permit, as provided in the schedule attached to the Regulation. Part three of the Regulation provides for procedures that allow investors to import duty free capital goods, construction materials and motor vehicles free from custom duties. The fourth part of the Regulation deals with incentives for mining investment, petroleum and geothermal works. The fifth part contains duties and responsibilities of regulatory institutions in implementing the Regulation. The final part i.e. part six provides for miscellaneous provisions of who has power to issue directives, transitory provisions and repealed laws.

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