The Commercial Bank of Ethiopia (CBE) has approved a 942 million birr loan to MIDROC Ethiopia Project Office MEPO, a company owned by the Saudi billionaire Sheik Mohammed Al-Amoudi, for the construction of a five-star hotel and a paper plant. The Board of Directors of CBE, chaired by Bereket Simon, approved the loan two weeks ago.
Reliable sources close to The Reporter disclosed that CBE will disburse 850 million for the Grand African Union Hotel which is located off Roosevelt Street, while the rest, 92 million birr, is for the construction of MIDROC’s Maya PP bag factory.
The CBE approved the project loans by holding the two properties as collateral.
Originally, around 80 sq.m of land that the hotel will be built on was granted to the AU by Addis Ababa City Administration in 2006. However, later on, following the bid floated by AU for the construction of the hotel, MIDROC submitted an extraordinary proposal that pledges to cover the full cost of the construction of the hotel if AU is willing to transfer the title deed of the plot of land to it.
Subsequently, AU cancelled the public bid and accepted the proposal which enabled the city administration to transfer the title deed of the plot to MICROC.
Last year the city administration granted MIDROC some 17,000 sq.m of land. Following that, MIDROC also requested additional land for security and parking.
Currently the construction of the Grand Hotel is under way and it was also learnt that the loan has already been disbursed for the company.
The other beneficiary project from the CBE loan is Maya PP bag factory under the management of Haile Asegide’s Derba MIDROC.
The objective of the PP bag factory is to provide plastic bag packaging for the packing of cement and rice produces of Derba MIDROC and Saudi Star Agriculture Development, respectively.
The plastic bag factory is located in the Derba areas of the Oromia region which plans to be sited on 13 hectare of land. The factory aims at producing some 80 millions of bags a year.
MIDROC is one of the biggest customers of CBE which has over 547 branches across the country. Currently, it is the second biggest creditor of CBE, next to government’s road project