How to Start and Operate Environmentally Sustainable Agribusiness Project in Ethiopia

Last updated March 14, 2015

Is your Ethiopia agribusiness investment project environmentally friendly and sustainable?  This is in fact a research questions you have to deal with in order to comply with the policy, legal and administrative framework of Ethiopia concerning development projects, be it public or private. To that end, agribusiness investors like you are required to undertake an environmental impact assessment (EIA) research study before starting a new investment.

Only that research can answer and resolve the question posed and subsequently qualify you to proceed to the next stages of business startup and operation. However, you can achieve that as long as you do your job as a proponent of the project and fully satisfy the legal and administrative requirements. To learn the basics, start with this quick guide article and consult other useful resources for more information and advises.


Begin with understanding why Ethiopia desires agribusiness development project that does not cost the earth

According to the World Commission of the Environment and development (cited in Asnake and Belay 2013), the concept of sustainable development embodies “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” It encompasses three pillars including economy, environment and society. The environment component is ‘concerned with the conservation, and enhancement of the physical and biological resource base and ecosystems” (Asnake and Belay 2013).

The government of Ethiopia offers vast high value lands including virgin lands in new areas that harbor immense natural resources. While the investment objectives to make use of the resources can be one thing, whether or not the planned investment project will have positive or negative impacts on the environment can be another.

You are therefore advised to read and have sound understanding of the investment and environmental impact assessment (EIA) objectives of Ethiopia. This will help you a great way to consider head on and fulfill the requirements while also benefitting yourself from practicing environmentally sustainable agribusiness.

For instance, you may consider the aims that necessitated the promulgation of Environmental Impact Assessment Proclamation No 299/2002. These include:

  • to predict and manage the environmental effects which a proposed development activity as a result of its design sitting, construction, operation, or an ongoing one as a result of its modification or termination, entails and thus helps to bring about intended development;
  • assessment of possible impacts on the environment prior to the approval of a public instrument provides an effective means of harmonizing and integrating environmental, economic, cultural and social considerations into a decision making process in a manner that promotes sustainable development
  • the implementation of the environmental rights and objectives enshrined in the Constitution would be fostered by the prediction and management of likely adverse environmental impacts, and the maximization of their socioeconomic benefits.
  • environmental impact assessment serves to bring about administrative transparency and accountability, as well as to involve the public and, in particular, communities in the planning of and decision taking on developments which may affect them and its environment;

Come up with a novel business concept

As a proponent who initiated the project, consider environmental issues and concerns for sustainable development in Ethiopia during the initial business conceptualization stage of your agribusiness investment in the country. In doing so, you will possibly come up with clear and best ideas and ultimately prepare a good sensible project proposal.

In this way you can also be able to somehow start the process of environmental impact assessment which involves “identifying, predicting, evaluating, and mitigating the biophysical, social, and other relevant effects of development proposals prior to major decisions being taken and commitments made” (Adane and Belay 2013).


Examine your project plan

You are advised to carefully examine your agribusiness project plan and make  ensure that your investment in general does not pose serious environmental risks and issues. These may include, among other potential negative impacts, water resource depletion, water pollution, soil degradation, health problem, conflict over resources such as water with communities around your project site, emergence of new pests and improper waste disposal.

Perhaps the best way for you to do this may be finding an external body and also possible an expert who can examine your plan more objectively than you.


Hire an EIA consultant

You are required to get the EIA done by a consultant. Therefore, you should hire one possibly with experience in EIA study in a similar agribusiness sector and use his/her services. 

You need to find an independent and licensed consultant to undertake the EIA research. You may consider getting help from existing investors operating in a similar agribusiness sector in finding capable and resourceful consultant in the field of service you require.


Decide whether you wish to use the advice of institutions that can guide you

This is not a must-do requirement that you should fulfilled. However, it is necessary that you get useful guidance and technical advice as some wise investors in your position do.

You need to get the technical support available at the Ethiopian Environment Authority (EPA). It is the most concerned government agency on environmental policy and administration issues and services.


Request EPA for a pre-screening consultation session

It will be wise to contact the Environmental Impact Department of EPA and request it for arrangement of a pre-screening consultation session for you. That will allow the department to allocate enough time and be able to properly support and guide you.


Have your project plan screened

Take the consultant with you to also partake in the pre-screening consultation session. A team of at least two including you the investor and the independent consultant who will undertake the EIA study should be present to benefit more from the advisory of EPA. The consultant will be able to understand expectations from the study so that he/she will be able to prepare adequate document that contains relevant information.

The EPA will screen your investment plan and advise your team what the important research points are. In that way, you will be able to adequately address the points during the actual impact assessment study.


Conduct the EIA study

Now the consultant should conduct and successfully complete the study as planned. A key deliverable of this research undertaking is an EIA study report.


Prepare the EIA study report using the required format

The report is the output of the research and hence it should be prepared with utmost care. You are strongly recommended to check and follow the required reporting format.

According to a guide by EIA and EKN (2008) An environmental impact study report shall contain as minimum, a description of the following:

  • the nature of the project including the technology and the processes to be used
  • the content and amount of pollutant that will be released during implementations as well as during operation
  • source and amount of energy required for operation
  • information on likely trans-regional impacts
  • characteristics and duration of all the estimated direct or indirect, positive or negative impacts
  • measures proposed to eliminate, minimize, or mitigate negative impacts;
  • contingency plan in case of accident
  • procedures of self-auditing and monitoring during implementation and operation

For each different sector there are specified guidelines. You therefore need to check at the Environmental Impact Department for more information. The Ethiopian Private sector associations such as the Horticulture Producer-Exporters Association (EHPEA) if you are planning to start a horticulture farm can also advise you on the most efficient way to proceed.


Get approval of the EIA study report

Be aware that you need to submit the EIA study report to the investment agency that will approve the report. You need to follow up decisions of the agency to know whether the report is found acceptable or otherwise.


Start and operate your agribusiness investment project

Provided that the report is found acceptable, you can now start and operate your project as planned. You may also be required to submit updates on a periodic basis. You need to find out requirements of investment and environment protection agencies at federal level regarding EIA study and reporting requirements during the startup and operation phases of your project implementation.

Take note that this article was prepared by Amare Molla, Information Hub Coordinator for ABSF, and as such does not necessarily reflect the views and opinions of the institutions involved in funding or managing the website. The article is written with utmost care by referring available and reliable information sources on the agribusiness and investment situation of Ethiopia. It is also thoroughly reviewed by Gertjan Becx, the ABSF project coordinator, and other experts of the project. Despite that, you are advised to check the accuracy of the information as legislative frameworks and procedures or other related conditions pertaining to EIA in Ethiopia may change over time with, for instance, changes in related policies or regulations.
You are advised to take necessary proactive measures to prevent potential negative impacts of your project on the environment if possible or eliminate, minimize or mitigate the impacts otherwise.
You need to fully comply with the relevant legislation frameworks and EIA study reporting requirements Failure to do so may cost you a lot .including warnings, fines and ultimately even cancellation of your investment grant or the land lease agreement.
Council of Ministers Environmental Impact Assessment Proclamation No 299/2002. Accessed on January 1, 2015. Asnake Melaku and Belay Teferra. 2013. The role of environmental impact assessment for sustainable development. In: Proceedings of the Thirty-third Annual Meeting of the International Association for Impact Assessment held in Calgary, Canada. Accessed on January 1, 2015. EIA and EKN (Ethiopian Investment Agency and Embassy of the Kingdom of the Netherlands). October 2008. Investing in the Agricultural Sector of Ethiopia: A Guide for New Investors. Accessed on December 12, 2014.

2 responses to “How to Access Agribusiness Development Credit in Ethiopia”

  1. abooook says:

    It is a very good explanation, but the reference is outdated. Proclamation No 249/2001 is repealed by Proclamation No 543/2007 and the repealing law itself i.e. p543/2007 is also repealed by Proclamation No. 768/2012 Export Trade Duty Incentive Schemes Proclamation before THREE YEARS AGO. It need to be re-written based on the new law i.e. Proclamation No. 768/2012