Billionaire Al Amoudi injects $100m into Ethiopian rice farm

By Eliot Beer

- Last updated on GMT

Billionaire Al Amoudi injects $100m into Ethiopian rice farm

Related tags Agriculture

Saudi billionaire Mohammed Al Amoudi has revealed plans to pump US$100m into his stalled 15,000-hecatare Ethiopian rice farm project, as part of a US$500m investment plan.

The injection of cash is aimed at restarting development of the site, owned by Al Amoudi’s Saudi Star Agricultural Development firm, in Abobo, in the Gambela region in the west of Ethiopia, according to media reports. Saudi Star acquired the land from the Ethiopian government in two tranches in 2008 and 2012, but has faced difficulties with contractors and irrigation, leaving only 350 acres cultivated to date.

In October Al Amoudi announced the appointment of a new CEO – Jemal Ahmed – for Saudi Star. Ahmed replaced Haile Assegide, a former minister for urban development, housing and construction in the Ethiopian government.

New plans unveiled

Under Ahmed’s new plan for Saudi Star, it will build new irrigation infrastructure, including a 42km canal to connect the farm to the Alwero Dam, and will abandon plans to develop the land as small submerged rice paddies. The firm also plans to construct a rice de-husking plant and storage silos.

Currently only a small proportion of the land is being used to develop seed and to analyse the conditions for a later expansion of production. The appointment of Jemal Ahmed follows heavy and critical investment to create the infrastructure for rice production​,” said a statement on Al Amoudi’s official website.

The next phase of this project, for which Jemal Ahmed will be responsible, is related to production of greater quantities of Saudi Star rice. He will also be responsible for the restructuring necessary to ensure a fully functioning export capability. Saudi Star has said that its latest projections target a production level of around 50,000 tons of rice from 7,000 hectares in use by the end of June 2015​,” the statement added.

Once fully operational the farm will employ 50,000 people, and Saudi Star could eventually cultivate up to 500,000 hectares of land for rice production, according to Al Amoudi. The main market for the rice would be Saudi Arabia, in support of the country’s food security programme.

Citrus, coffee and criticism

The Abobo rice farm is part of a much larger series of planned investments by Al Amoudi, which will total at least US$500m over the next five years. Along with Saudi Star’s rice farm, Al Amoudi is developing plantations for coffee, spices and citrus fruits, through his Horizon Plantations and Upper Arwash Agro-Industry firms.

At Horizon Plantations, the funds will be used to train workers, improve roads and replace and modernise equipment at its Bebeka and Limmu coffee plantations and at its Upper Awash Agro-Industry farms (with 1,200 hectares currently devoted to citrus). The investment is part of a major growth strategy for Horizon, which also produces a wide range of organic fruits and vegetables and which is closely aligned with [Al Amoudi’s] commitment to help build a stronger Ethiopian agricultural economy​,” said a statement from Al Amoudi’s site.

The Saudi-Ethiopian billionaire’s plans have faced criticism, with local residents and international NGOs claiming the projects are a “land grab​”. The Saudi Star site at Abobo is guarded by Ethiopian soldiers, and in 2012 workers on the canal project came under attack.

In January 2012, Human Rights Watch reported that local populations were forcibly displaced for the Saudi Star rice project in Gambela. Shortly after the announcement of the irrigation project in April of 2012, Saudi Star’s farms came under attack, resulting in five dead and 11 wounded. Retaliation attacks were reported, as well as villagers fleeing to neighbouring Sudan. Federal police now guard the area​,” said a report on the project by the Atlas of Environmental Justice.

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