CONTEXT AND CHALLENGES
Insufficient road access to the Butajira Industrial Zone
Butajira Town lies at the base of the Zebidar massif in Central Ethiopia and has a population of approximately 50,000. The Butajira Industrial Zone covers 75ha and provides enough space for companies that could employ up to 10,000 workers. But many companies hesitate to locate in the area, because the poor state of the access road increases transport costs and leads to a delay in the movement of goods. Especially the delivery of heavy and bulky goods like machines is difficult. Most of the people employed by the companies that are currently located in the industrial zone live in Butajira. As the existing road is not only full of potholes but is also unlit, it represents a safety hazard to commuters.
PROJECT APPROACH AND PROJECT GOALS
An asphalt road for the transport of people and goods
To increase the attractiveness of the industrial zone, the municipality wants to build an illuminated asphalt road of 2.4 kilometres. The objective is to connect the residential areas in the eastern part of Butajira to the industrial zone. The easier access should improve the conditions for companies operating in the industrial zone and attract new investors. Three companies from a local group have already expressed their willingness to relocate to the Butajira Industrial Zone after the completion of the new road.
The Municipality of Butajira will identify a suitable construction company through a public tender. It was contractually agreed that the local population will participate in the planning process and that environmental risks and the social impact will be assessed before the start of the construction. 1.5 years after the start of the planning phase, work on the road should be completed.
The Municipality of Butajira Town estimates that the construction of the road will cost around 5 million euros. The Facility Investing for Employment grants a subsidy of 4.51 million euros (90%). The textile company DESTA PLC is already located in the industrial zone and gets direct support from the Facility as part of a separate measure. This will help them finance the extension of their product range and the participation of their employees in a dual education programme.
STATUS AND OUTLOOK
New jobs through the establishment of businesses
By removing a major investment barrier, the new road allows businesses to locate in the industrial zone and to create a significant number of jobs and apprenticeships. Butajira Town as well as the surrounding area will benefit from the economic development. The Ethiopian group of companies Bekele has already pledged to create 4,500 additional jobs in the Butajira Industrial Zone once the road is completed. The long-term potential is significantly higher.
The Facility Investing for Employment of KfW Development Bank is part of the Special Initiative on Training and Job Creation of the German Federal Ministry for Economic Cooperation and Development (BMZ). With its support, it wants to remove barriers that prevent the creation of new and better jobs in the private sector.
