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Deal #1205

Location #1

Spatial accuracy level
Administrative region
Location
Gambella, Ethiopia

Target country
Ethiopia
Comment on location
Jikao and Itang districts

Land area

Intended size (in ha)
300000
Size under contract (leased or purchased area, in ha)
[2010] 100000
Size in operation (production, in ha)
[2012] 4000
Comment on land area
The company acquired 300 000 hectares in 2008 from the Gambela Regional government on a 99 year lease. in 2009 the federal government took responsibility for the land deal and the size under agreement was reduced to 100 000 hectares in 2010 on a 50 year term. 100,000ha initially, further 200,000ha after first tranche is under production, provided that it was by 2012. 42.088ha in Itang and 57,912ha in Jikao. The first crop was destroyed by floods in 2011.

Intention of investment

Intention of investment
Biofuels, Food crops

Nature of the deal

Nature of the deal
Lease

Negotiation status

Negotiation status
[2010] Concluded (Contract signed)
Comment on negotiation status
The head of AISD, Mr. Esayas Kebede told OI that the amount of land was not 300,000 ha, but was in fact 100,000 ha, was for 30 years, and was for 111birr/ha (USD 7/ha). Maps publicly on display inside the office showed that the land given was 100,136 ha. The full 100 000 hectares was due to be cultivated within two years from the date the contract was signed. In January the company claimed that it would cultivate only 60 000hectares.

Implementation status

Implementation status
In operation (production)
Comment on implementation status
Karuturi is being investigated for illegal activities, including corruption, environmental destruction and failure to uphold the terms of their contracts. Local sources have said that Karuturi's farming operations in Gambela have shut down, and that the company has removed its tractors and other farm machinery from the farm. The Ethiopian Investment Agency intends to revoke the investment permit granted to Karuturi because the company has not proceeded with the investment project within the agreed time frames. The company owes the Commercial Bank of Ethiopia (CBE) 65 million birr from its overdraft facility. Initally the bank issued a foreclosure notice, however the company is now settling the minimum 25 percent of the debt.

Leasing fees

Annual leasing fee
20
Annual leasing fee currency
Ethiopian Birr
Annual leasing fee type
per ha

Contract #1

Contract date
2010-10-25
Duration of the agreement (in years)
50

Number of domestic jobs created

Jobs created (domestic)
Yes
Comment on jobs created (domestic)
In March 2013,92 Ethiopian workersat Karuturi's Gambela site filed a complaint with the Department of Labour and Social Welfare claiming that their salaries were delayed by up to 20 days and that the company did not provide identity cards, safety equipment, medical treatment or proper residence. The department found workers living in cramped metal shacks without proper ventilation.

Operating company

Operating company
Comment on investment chain
Ethiopian.

 

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Data source #1

Data source type
Research Paper / Policy Report
File
Date
2011-01-01
Comment on data source
A case study of the Bechera agricultural development project, Ethiopia

Data source #2

Data source type
Media report
File
Date
2012-06-02
Comment on data source
Business world- Indian Farmers African Safari

Data source #3

Data source type
Media report
File
Date
2014-02-13
Comment on data source
Karuturi going down? A summary of recent developments

Data source #4

Data source type
Research Paper / Policy Report
File
Comment on data source
Oakland Institute: Country report Ethiopia

Data source #5

Data source type
Media report
File
Date
2014-06-07
Comment on data source
Farm Land Grabs- Foreclosure notice forces Karuturi to pay off 25 percent debt

Data source #6

Data source type
Media report
File
Date
2013-02-07
Comment on data source
The Guardian- Indian investors are forcing Ethiopians off their land

Data source #7

Data source type
Media report
File
Date
2010-09-17
Comment on data source
Farmland Grab- Ethiopians say Indians grabbing land, Indian farmers claim it is official

Data source #8

Data source type
Media report
File
Date
2010-10-28
Comment on data source
Farm Land Grab- Karuturi Tractors make big splash on Bole road

Data source #9

Data source type
Media report
File
Date
2010-01-01
Comment on data source
The Ethiopia Macroeconomic Handbook by Access Capitals

Data source #10

Data source type
Contract
File
Comment on data source
Karuturi Agreement

Data source #11

Data source type
Research Paper / Policy Report
File
Comment on data source
Ecofys- Land Grabs for Biofuels driven by EU biofuels policies, Carlo Hamelinck, 2013

Data source #12

Data source type
Research Paper / Policy Report
File
Comment on data source
Institute of Developing Economies- Karuturi Global Limited.

Data source #13

Data source type
Media report
File
Date
2013-04-22
Comment on data source
The Weekend leader- Roses for the world: An Indian success story in Ethiopia

Data source #14

Data source type
Media report
File
Comment on data source
Bloomberg Business week- Ethiopian Meadows PLC

Promised or received compensation

Promised compensation (e.g. for damages or resettlements)
There are reports that the resettlement program involved coercion and abuse

Former land cover

Former land cover
Forest land
Comment on former land cover
Reports that the company has cleared forest land without an environmental impact assessment

Detailed crop, animal and mineral information

Crops area
Corn (Maize), Oil Palm, Rice, Sugar Cane

Use of produce

Has domestic use
Yes
Has export
Yes
Country 1
Djibouti
Country 2
Kenya
Comment on use of produce
All East and South Africa is targeted, yet DJI and KEN are the only countries mentioned explicitly. The Ethiopian Agriculture Minister said the trade balance, which was hugely skewed towards India , would tilt in Ethiopia's favour once the projects materialise.

In country processing of produce

In country processing of produce
No

Water extraction envisaged

Water extraction envisaged
Yes

Source of water extraction

Source of water extraction
Groundwater
Surface water ()
Comment on source of water extraction
There are concerns over the drainage of wetland areas

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