The agreement can be renewed for another additional year on the same terms and conditions, provided the extension is mutually agreed between the parties. If a party wishes to renew the agreement, it shall inform the other party at least six months before the expiration of the contract period.
State agency, national company or ministry executing the document
Ministry of Agriculture. The Ministry of Agriculture, as representative and highest authority of Ethiopian government to this contract, shall guarantee the validity of this agreement; Registration and approval by notary office is not necessary; Copies of the contract shall be sent to Al-Mehdi, District administration, finance office, investment commission and other concerned bodies
Environmental impact assessment and management plan
Agropeace is required to conduct an environmental impact assessment and deliver the environmental impact assessment report within three months of execution of agreement
Agropeace has obligation to provide good care and protection of the lease land and the natural resources hereon, including to conserve tree plantations that have not been cleared for earth works, apply appropriate work methods to prevent soil erosion in slopping areas, observe relevant natural resource conservation law, and complete an environmental impact assessment within three months of executing the agreement
The Ministry of Agriculture may monitor and establish that Agropeace is discharging and accomplishing its obligations diligently, provided that this right is exercised and performed in a manner which does not cause any hindrances to the work and activities of Agropeace
The Ministry of Agriculture undertakes to provide, or to cause to be provided, special investment privileges such as exemptions from taxation, import duties of capital goods, and repatriation of capital and profits granted under the investment laws of Ethiopia
The Ministry of Agriculture reserves the right to revise the lease payment rate as the need may arise; The Ministry of Agriculture shall have a right to amend the land rent
Restrictions on transactions with affiliated parties
Agropeace has the right to develop or administer the leased land on its own or through a legally delegated person or agency; Dividing the leased land among the shareholders of Agropeace to develop the leased land independently or subleasing the leased land to any party is strictly forbidden and shall result in the termination of the agreement; Unless 75% of the project land is developed, Agropeace has no right to transfer the land or the use right of the land and properties developed on the land to any other company or individual by forming a new company or transferring part of individuals company's share; Upon developing 75% of the project land, Agropeace is permitted to transfer the developed land or properties developed on the land to another company or individual only with prior consent and written permit from the Ministry of Agriculture
Agropeace is entitled to a 4-year grace period for the land rent, after which the rent for that 4 year period will be prorated over the remaining years annually. After such period, it will be subject to the annual lease rate of birr 665.85 per hectare, making an annual amount owing of birr 1,331,700, and a total amount for the entirety of the agreement of birr 33,292,500. Once the land rent is payable, Agropeace must settle the current annual land rent including the prorated rent amount of the grace period to the regions where the land is located during the months December up to June every year as per predetermined lease rate for rural lands. Agropeace is also required to pay a 1-year down payment to the Ministry of Agriculture.
Agropeace is obliged to provide good care and conservation of the leased land and natural resources thereon; It must conserve tree plantations that have not been cleared for earth works, apply appropriate working methods to prevent soil erosion in sloping areas, observe and implement natural resource conservation laws, and conduct an environmental impact assessment and deliver the environmental impact assessment report within three months of the execution of the contract
Agropeace has the right to build infrastructure such as dams, water boreholes, power houses, irrigation systems, roads, bridges, offices, residential buildings, fuel/power supply stations outlets health/ hospitals/ dispensaries, and education facilities at its discretion upon consultation and submission of permit request with concerned offices and subject to the type and size of the investment project whenever it deems so appropriate.
Upon the expiry of the agreement, Agropeace shall remove assets installed on the leased land within the period not exceeding one year. However, Ministry of Agriculture has priority right to purchase properties over the land in negotiation with Agropeace
The Ministry of Agriculture is obliged to arrange access and use of facilities of the Ethiopian government and the Regional State Research centers, with fee, for soil testing and mapping
Upon entering into this agreement, Agropeace shall submit an advance action plan with regards to the use of the leased land to the Ministry of Agriculture; Agropeace is required to execute all development activities as per the agreed business plan. Change to or deviation from the business plan must be reported with justification to the Ministry of Agriculture. Agropeace shall not make any unauthorized use of the leased land beyond the predetermined purpose, objective or plan as permitted under this agreement without the consent in writing of the Ministry of Agriculture.
The Ministry of Agriculture shall deliver the site plan to Agropeace within 30 days of signing the contract; If the site plan cannot be effected due to actions by Agropeace despite the Ministry of Agriculture informing Agropeace in writing of the complication, the Ministry of Agriculture shall not assume any responsibility of such failure; The land shall be transferred within 30 days of the signing of the contract, immediately after which the contract shall come into force
The Ministry of Agriculture must provide adequate security, free of cost, against any riot, disturbance or any other turbulent time other than force majeure, as and when requested by Agropeace
Agropeace is expected to start to develop the land within six months from the date of execution of the agreement, or from the date that Agropeace receives final clearance from the Ethiopian government, whichever is later; Agropeace has to execute all development activities as per the agreed business plan. Agropeace shall develop '666 hectare' of the land within the first year; Agropeace shall develop the entire leased land within 3 years from the date of signing or receipt of all necessary clearances from Ethiopian government.
In the event of dispute, both parties will do their utmost to resolve the dispute amicably and to their mutual satisfaction. If they are unable to achieve such a settlement, the dispute shall be referred to the Ethiopian Federal Court.
Unless 75% of the land is developed, Agropeace has no right to transfer the land, land use rights or properties developed on the land to other persons. Upon developing 75% of the land, Agropeace can transfer the land or properties developed on the land to other persons only with the prior consent and written permit of Ministry of Agriculture.
The Ministry of Agriculture reserves the right to restore such lands covered by this contract which are not developed by Agropeace within one year from the date specified for commencement of development as per the agreed business plan, provided that Agropeace is given six months' prior notice and fails to resolve within such one year period; The Ministry of Agriculture shall issue six months' advance notice prior to termination of the contract on the grounds of failure to develop the land within the time limits in accordance with contract obligations, of any damage to the natural resources or of nonperformance of due payment of rent or relevant taxes. In the event of not addressing such an issue, the Ministry of Agriculture may extend the time period for such compliance or terminate the contract according to the terms of this contract.
The contract may be terminated for the reasons of: (i) expiry of agreement period; (ii) failure of the Ministry of Agriculture to deliver the leased land within 30 days after the down payment for reasons other than force majeure; (iii) failure by the Ministry of Agriculture to remedy any of its breach of obligations or covenants within six months of Agropeace sending notice of such breach; (iv) failure by Agropeace to settle annual rental and other relevant taxes for two consecutive years; (v) failure by Agropeace to remedy any of its breaches of obligations or covenants that are within its control within six months of the Ministry of Agriculture sending notice of such breach; (vi) termination by the Ministry of Agriculture for better public interest after giving six-month's notice; and (vii) termination by Agropeace for its own good reasons after giving six-month's notice. On termination of the contract, Agropeace shall surrender the leased land back to the Ministry of Agriculture within one year from the date of termination. If the contract is terminated by Agropeace for (i) breach of obligations or covenants by the Ministry of Agriculture; or (ii) termination by the Ministry of Agriculture, the Ministry of Agriculture shall pay to Agropeace the value of improvements made by Agropeace on the land at the market price after deducting any dues on account of rentals or taxes
Agropeace shall provide correct data and investment activities reports upon request by the Ministry of Agriculture; The Ethiopian government has the right to monitor and establish whether Agropeace is discharging and accomplishing its obligations diligently; Such monitoring must be done in a manner that does not cause any hindrances to the work and activities of Agropeace