Note:
This document is an unofficial translation, commissioned by OpenLandContracts, of the original Amharic-language contract disclosed by the government
Amharic version of contract available below as an associated document
Upon the mutual agreement of the parties, the land lease agreement can be renewed for additional year/s on similar contractual terms. If Rahwa Agri-Development wishes to renew the land lease agreement it must notify the Ministry of Agriculture and Rural Development 6 months before the expiry of the land lease agreement.
Rahwa Agri-Development shall take good care of and conserve the leased land and natural resources on it. Rahwa Agri-Development shall also: (a) conserve trees that have not been cleared during the leased land preparation; (b) utilize various methods that are appropriate to prevent soil erosion especially in sloping areas; and (c) respect and implement legislation in relation to natural resource conservation.
Rahwa Agri-Development shall receive exemptions import duties on capital goods in accordance with the laws of Ethiopia that are proclaimed for foreign companies
The Ministry of Agriculture and Rural Development, considering the fact that this is a major investment operation, shall provide and execute special privileges to Rahwa Agri-Development, such as repatriation of capital and profits in accordance with the laws of Ethiopia that are proclaimed for foreign companies
Starting from the day this lease is signed, there shall be a 3 year payment grace period. The unpaid rent during the grace period shall be prorated over the remaining years of the lease period and shall be paid along with the regular annual payment. After the 3 year period, the annual lease rate shall be Birr 158 per hectare of land, or Birr 474,000, and the total amount payable for the 25-year lease period shall be Birr 11,850,000. There shall be a down payment of 1 year of rent of the land. The Ministry of Agriculture and Rural Development reserves the right to revise and change the lease rate as deemed necessary and inform Rahwa Agri-Development accordingly. When the grace period ends, Rahwa Agri-Development shall settle the annual land rent in addition to the prorated amount that is not paid during the grace period to the regional (office) where the land is located every year between the months of December and June in accordance with the predetermined land lease rate for rural lands.
Rahwa Agri-Development shall have the right to build infrastructure such as dams, water boreholes, power houses, irrigation systems, roads, bridges, offices, residential buildings, fuel stations, health and educational institutions, whenever deemed appropriate by submitting a permit request to the relevant authorities with their consultation and subject to the type and size of the investment project. Within 6 months of termination or the expiry of the land lease agreement, or cancellation of the investment license, Rahwa Agri-Development shall remove assets that are installed on the leased land and hand over the leased land to the Ministry of Agriculture and Rural Development. When this land lease agreement is terminated, the Ministry of Agriculture and Rural Development will have priority to negotiate and purchase the properties on the land. Unless the Ministry of Agriculture and Rural Development would like to keep certain chattels on the land, Rahwa Agri-Development has the right to detach and take what belongs to it.
The Ministry of Agriculture and Rural Development shall cooperate in providing adequate security, free of charge, so that Rahwa Agri-Development may develop the land peacefully free from any trouble, riot, or disturbance other than force majeure
Rahwa Agri-Development shall start developing the land within 6 months from the signing of the land lease agreement, provided that all relevant government licenses have been issued. Rahwa Agri-Development shall develop 1/3rd of the leased land within 1 year from the date the land lease agreement was signed and must have developed the entire leased land within 3 years of the date the land lease agreement was signed.
When a dispute arises between the Ministry of Agriculture and Rural Development and Rahwa Agri-Development in connection with or arising out of the land lease agreement, both parties shall endeavor and use their utmost efforts to resolve the dispute peacefully and to the benefit of both parties. If the dispute cannot be resolved accordingly as stated above, then it shall be referred to the Ethiopian Federal Court.
Rahwa Agri-Development does not have the right to transfer the leased land to another company or individual unless 75% of the land has been developed and the prior written approval of the Ministry of Agriculture and Rural Development has been obtained. Once the request is submitted, the Ministry of Agriculture and Rural Development shall respond promptly.
The land lease agreement may be terminated if: (i) the land lease agreement has expired; (ii) the Ministry of Agriculture and Rural Development is unable to deliver the land to Rahwa Agri-Development due to a force majeure event; (iii) either party fails to fulfill any of its obligations or covenants in the land lease agreement even after the expiry of 6 months from the date of receipt of a notice from the other party to do so; (iv) Rahwa Agri-Development fails to make annual rental and other tax payments for 2 consecutive years, develop the leased land within the time limits stated in the land lease agreement, or damages the natural resources on the land; and (v) if either party has another good reason to terminate the land lease agreement and has given the other party 6-month’s prior written notice to such effect.
Upon the request of the Ministry of Agriculture and Rural Development, Rahwa Agri-Development shall provide accurate data and report investment activities. The Ministry of Agriculture and Rural Development has exclusive rights to control and follow up that Rahwa Agri-Development is executing all of the obligations under the land lease agreement diligently.