AGANDA TRADING GAS STATION +BETE

GURAGE CULTURAL LODGE AND GUST HOUSE

INVESTMENT PROPOSAL
5/7/2022

Promoter:- Aganda Trading, PLC

MOBILE: +251913275506

PEOJECT LOCATION: CHEHA WOREDA, ENDIBIR

TOWN
Specific Location: Amorameda
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PREPARED BY: REKIK DEVELOPMENT CONSULTANTS
PLC
Mobile Phone: 0911384833
 TABLE OF CONTENTS
Acronyms .................................................................................................................................................. 6
List of Annex ............................................................................................................................................ 7
List of Figure ............................................................................................................................................ 7
List of Tables ............................................................................................................................................ 7
1. EXECUTIVE SUMMARY ................................................................................................................. 8
2. INTRODUDTION ............................................................................................................................ 12
2.1 RATIONAL BEHIND THE PROJECT ............................................................................................ 13
2.2 SOCIO-ECONOMIC JUSTIFICATIONS ........................................................................................ 14
2.3. COMPANY /APPLICANT ............................................................................................................ 14
2.4 PROMOTER’S PROFILE ................................................................................................................. 15
3. BACKGROUND INFORMATION ................................................................................................. 16
3.1 STATUS OF HOTEL, LODGE, RESORT & TORISM SNNPR IN SNNPR .................................. 16
3.1.1 CURRENT HOTEL AND TOURISM INDUSTRY .............................................................16

3.1.2 SOUTHERN REGION TOURISM TREND .........................................................................17

3.2 PETROLEUM INDUSTRY .............................................................................................................. 17

3.2.1 FUEL SUPLLYING SYSTEM IN ETHIOPIA .....................................................................17

3.2.2 FUEL AND PETROLEUM PRODUCTS BUSINESS LEGAL STATUS ...........................19

3.2.3 PETROLEUM SUPLLYING REGULATORY BODIES .....................................................19

4. GENERAL DESCRIPTION 0F THE PROJECT .......................................................................... 20

4.1 LOCATION OF PROJECT AREA ................................................................................................... 20
4.2 TOPOGRAPHY OF THE AREA ..................................................................................................... 20
4.3 CLIMATICA CONDTION OF THE PROJECT AREA ................................................................... 21
4.4 THE SOIL OF THE PROJECT AREA ............................................................................................. 21
4.5 WATER RESOURCES ..................................................................................................................... 21
4.6 SOCIO-ECONOMIC ENVIRONMENT........................................................................................ 22
4.6.1 POPULATION PROFILE ......................................................................................................22

4.6.2 INFRASTRUCTURE AND SERVICES ...............................................................................22

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 4.6.3. SETTLEMENT PATTERN ..................................................................................................22

4.6.4 HEALTH FACILITIES..........................................................................................................22

5. THE PROJECT ................................................................................................................................. 23

5.1 PROJECT DESCRIPTION................................................................................................................ 23
5.2 PROJECT ACTIVITIES.................................................................................................................... 24
5.3 PURPOSE OF THE PROJECT ......................................................................................................... 25
5.4 PROJECT OBJECTIVES .................................................................................................................. 25
5.5 INDUSTRY ANALYSIS................................................................................................................ 26
5.5.1 OIL INDUSTRY ....................................................................................................................26

5.5.2 HOTEL SERVICE INDUSTRY ............................................................................................26

5.6 PRODUCTS AND SERVICES ...................................................................................................... 27

5.6.1 GAS STATION ......................................................................................................................27

5.6.1.1 FUEL SALES ................................................................................................................... 27

5.6.1.2 CAFETERIA SALE ......................................................................................................... 27

5.6.2 CULTURAL LODGE AND GUST HOUSE .........................................................................27

5.7 TECHNOLOGY AND ENGINEERING ....................................................................................... 28

5.7.1 PRODUCTION PROCESS .................................................................................................28

5.7.2 MACHINERY AND EQUIPMENT ......................................................................................28

5.7.2.1 GAS STATION MACHINERY AND EQUIPMENT ..................................................... 28

5.7.2.2 LODGE AND GUST HOUSE MACHINERY AND EQUIPMENT .............................. 29

5.8 PROJECT COMPONENTS PRODUCT AND MARKETING PLAN .......................................... 30

5.9. UTILITIES OF GAS STATION & LODGE AND GUST HOUSE ................................................ 31
6. MARKET STUDAY AND APPLICATION ................................................................................ 32
6.1 GAS STATION MARKETING STUDY .......................................................................................... 32
6.1.1 OVER-VIEW OF PETROLEUM PRODUCTS CONSUMPTION ......................................32

6.1.2 PAST SUPPLY AND PRESENT DEMAND ........................................................................33

6.1.2.1 PAST SUPPLY ................................................................................................................. 33

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 6.1.2.2 THE PRESENT DEMAND .............................................................................................. 33

6.1.2.3 DEMAND PROJECTIONS.............................................................................................. 34

6.1.3 MAIN CUSTOMERS ............................................................................................................34

6.1.4 GAS STATION SELLING PRICE ........................................................................................35

6.1.5 COMPETITION .....................................................................................................................36

6.2 LODGE AND GUST HOUSE SERVICE MARKET ANALYSISS ................................................ 36

6.2.1 PRESENT DEMAND AND SUPPLY ..................................................................................36

6.2.2 PROJECTED DEMAND IN ETHIOPIA...............................................................................37

6.2.3 TARGET MARKET ..............................................................................................................38

6.2.4 COMPETITION ANALYSIS ................................................................................................38

6.2.5 PRICING AND DISTRIBUTION ......................................................................................39

6.2.6 PRICING STRATEGY ..........................................................................................................39

6.2.7 PROMOTION AND ADVERTISING STRATEGY .............................................................39

7. LAND USE, BUILDING AND CIVIL WORKS ......................................................................... 40

7.1 LAND USE PLAN & BUILDING CIVIL WORKS & RELATED COST ...................................... 40
7.1.1 GAS STATION BUILDING CIVIL WORKS & RELATED COST ....................................40

7.1.2 GAS STATION BUILDING AND CIVIL WORKS STANDARDS ....................................41

7.2 CULTURAL LODGE & GUST HOUSE BUILDING CIVIL WORK COST .............................. 43
7.2.1 BUILDING HEATING, VENTILATION AND CONDITIONING SYSTEM .................43

7.2.2 WATER SUPPLY AND SEWAGE SYSTEM ......................................................................45

7.2.3 POWER SUPPLY SYSTME .................................................................................................45

7.2.4 ELECTRICAL EQUIPMENT AND LIGHTING ..................................................................46

7.2.5 INSTALLATION OF TELEPHONES ..................................................................................46

7.2.6 PRINCIPLES AND STANDARDS OF FINISHING ............................................................46

7.3 PROJECT IMPLEMENTATION SCHEDULE ................................................................................ 47

8. MANPOWER REQUIREMENT AND TRAINING REQUIREMENT ...................................... 49
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8.1 HUMAN RESOURECE .................................................................................................................... 49
8.2 ORGANIZATION AND MANAGEMENT ..................................................................................... 49
8.3 TRAINING REQUIREMENT .......................................................................................................... 50
9. FINANCIAL STUDY ........................................................................................................................ 51
9.1 INTRODUCTION ............................................................................................................................. 51
9.2 PROJECT FINANCIAL REQUIREMNT PLANNING COST ........................................................ 51
9.3 SOURCE OF FINANCING............................................................................................................... 52
9.4 IMPLEMENTATION ........................................................................................................................ 52
9.5 GENERAL FINANCIAL PLANNING ASSUMPTION ............................................................... 52
9.5.1 ECONOMIC ASSUMPTIONS ..............................................................................................52

9.5.2 CASH FLOW ASSUMPTIONS ............................................................................................53

9.5.3 WORKING CAPITAL ESTIMATIONS ...............................................................................53

9.5.4 PRODUCTION ASSUMPTIONS .........................................................................................53

9.5.5 REVENUE, EXPENSES AND NET PROFIT ......................................................................53

9.6 BUSINESS COST ESTIMATE ASSUMPTION .............................................................................. 54

9.6.1 GAS STATION FURNITURE AND FIXTURE REQUIREMENTS ...................................54

9.6.2 LODGE&GUST HOUSE FURNITURE AND FIXTURE REQUIREMENTS ....................54

9.6.3 GAS STATION & LODGE AND GUST HOUSE PRODUCTION COST ..........................55

9.6.4 GAS STATION & LODGE AND GUST HOUSE OPERATION COST .............................55

9.6.5 REVENUE ESTIMATION .................................................................................................56

10. FINANCIAL PROJECTIONS ....................................................................................................... 57

10.1 PROJECTED INCOME STATEMENT .......................................................................................... 57
10.2 PROJECTED BALANCE SHEET .................................................................................................. 57
10.3 PROJECTED CASH FLOW STATEMENT .................................................................................. 57
11. FINANCIAL EVALUATION......................................................................................................... 58
11.1. PROFITABILITY ........................................................................................................................... 58
11.2. BREAKEVEN ANALYSIS ........................................................................................................... 58
11.3. PAYBACK PERIOD ...................................................................................................................... 58

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11.4. SIMPLE RATE OF RETURN ........................................................................................................ 58
11.5 INTERNAL RATE OF RETURN AND NET PRESENT VALUE................................................ 58
11.6 LOAN REPAYMENT SCHEDULE ............................................................................................... 59
11.7. SENSITIVITY ANALYSIS ........................................................................................................... 59
12. ECONOMIC AND SOCIAL BENEFITS AND JUSTIFICATION ............................................ 60
12.1. PROFIT GENERATION ................................................................................................................ 60
12.2. TAX REVENUE............................................................................................................................. 60
12.3. EMPLOYMENT AND INCOME GENERATION ....................................................................... 60
12.4 PRO ENVIRONMENT PROJECT ................................................................................................. 60
13. CONCLUSIONS AND RECOMMENDATIONS ........................................................................ 61
13.1 CONCLUSIONS ............................................................................................................................. 61
13.2 RECOMMENDATION ................................................................................................................... 61
14. ANNEXURE OF FINANCING ASSUMPTIONS ........................................................................ 62

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 Acronyms
ADLI Agricultural Development-Led Industrialisation
ECX Ethiopian Commodity Exchange
ETB Ethiopian ETB
FDRE Federal Democratic Republic of Ethiopia
GDP Gross Domestic Product
GTP Growth and Transformation Plan
Ha Hectare
KA(s) Kebele Administration(s)
KM Kilo Meter
m.a.s.l. Meters above sea level
Mm Millimetre
MoARD Ministry of Agriculture and Rural Development
MoFED Ministry of Finance and Economic Development,
o
C Degree Cellicious
PIF Policy and Investment Framework (of Ethiopian Agricultural Sector)
PLC Private Limited Company (Pvt. Ltd. Co)
Qtl(s) Quintal(s)
USA United States of America
USD United States Dollars

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List of Annex
Annex 1: SUMMARY OF GAS STATIONS AND LODGE AND GUST HOUSE REVENUE .....62
Annex 2: COST OF GAS STATION GOODS ASSUMPTIONS.......................................................62
Annex 3: COST OF LODGE AND GUST HOUSE GOODS ASSUMPTIONS ................................63
ANNEX 4: PROJECTED PROFIT AND LOSS STATEMENT ........................................................64
ANNEX 5: PROJECTED BALANCE SHEET ...................................................................................65
ANNEX 6: PROJECTED CASH FLOWS ..........................................................................................65
ANNEX 7: PROJECTED WORTH MEASURE (NPV, IRR,) AND PAYBACK PERIOD ...........66

List of Figure
Figure 1: Tourism circuit of Ethiopia ..................................................................................................16
Figure 2: Petroleum product imported into the countries from ...................................................18
Figure 3: Trends in Petroleum products Consumption in Ethiopia .....................................................33
Figure 4: Typical Organizational Structure of a Fuel Station..............................................................50

List of Tables
Table 1: Summary of International Tourists by Purpose of Visit ........................................................17
Table 2: Fuel Station Machinery and Equipment Required & Related Cost ......................................29
Table 3: Cultural Lodge& Gust House Machinery and Equipment Required & Related Cost ..........29
Table 4: Fuel and Oil and Lubricates marketing plan ........................................................................30
Table 5: kerosene, Gasoline and Diesel Demand Projections (M.Tons) .............................................34
Table 6: Tourists arrived in Ethiopia and corresponding Receipts......................................................37
Table 7: Average price of service by category ....................................................................................39
Table 8: Land Use Plan & Building Civil Work & Related Cost........................................................40
Table 9: Cultural lodge& Gust house Building Civil Work & Related Cost ......................................43
Table 10: Project Implementation Schedule ........................................................................................48
Table 11: The Required human Resource and Qualification...............................................................49
Table 12: Total Investment Cost (Et Birr) ..........................................................................................51
Table 13: Loan Repayment Schedule (Et. birr) ...................................................................................59

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1. EXECUTIVE SUMMARY
The present investment feasibility study is established with view to develop new AGANDA TRADING (PLC)
GAS STATION + BETE GURAGE CULTURAL LODGE & GUST HOUSE project at Cheha district to
introduce public service of Gas Station and Cultural Lodge and Gust House center (hereafter referred to as
shopping petroleum product and leisure center), located in Cheha woreda Gurage Zone, SNNPRS in Endibir
town, specific location is Amorameda. The constructional project of the Gas Station and Cultural Lodge and
Gust House leisure center will not only give the citizens of Endibir town the opportunity of purchasing of
petroleum goods and products, but also create enjoying the family entertainment in the leisure center and the
attraction center of truism.

The investor is planning to investment and initiated on established of AGANDA TRADING AGANDA
TRADING (PLC) GAS STATION + BETE GURAGE CULTURAL LODGE & GUST HOUSE with land of
30,000 square meters at Endibir town, Cheha Woreda, Gurage Zone, Southern Nation, and Nationality
Regional States.

This summary highlights the key points of feasibility of investment land and capital requirements and to
establish for the energy supplying gas station and the leisure center of Gurage culture and gust house for
both local and foreign tourists, new gust and investors.

The proposed of this specialized in commercial cultural heritage lodge and gust house service industry with
land resort supply products of 130 guest rooms, restaurant and bar facility which can serve 500 persons,
conference room, sauna and steam, and boots service at the landscape side of Cheha district. The Gas Station
is also providing with capacity of 200.000 liter per week consumption of petroleum products such as
Gasoline, diesel and kerosene, oil lubricant and others.

This Gas Station is suitable for the costumers and site lies along Cheha to Hosaina, Hosaina to wolayita-
Kebeta Tembaro asphalt road and Hosaina to Alaba kulity, Alaba kulity to shashemen viea Hawassa Hwassa
town. Secondly Cheha to Gubire woreda to Butajira to Ziway to Shashemen Via Hwasa town international
road and Surronding woreda Gubere, Imidibire and others of Cheha districts with high number of vehicles
and tracks are passed within a 24 hours along the project site.

Thus, the main objective of this project is:-to established GAS STATION +BETE GURAGE CULTURAL
LOADGE & GUST HOUSE PROJECT service industry with intensified technological thereby making
promising profit making business to the investor; serve as a model gas Station and cultural lodge center
transformation and promotion of service industry in the project area

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Total investment outlay is about 28.232 million, including all the construction costs and putting into
operation. It should be noted that project proponent has invested equity funds in the following works:
Acquisition of building land;
Purchasing of water supply networks;
Purchasing of the sewage networks;
Purchasing of telephone cable;
Purchasing of power/Electrification;
Development of project documentation and etc…;
The allocation of investment cost is mainly on Site and building development accounts 42% and Furniture &
Fixture, Machinery & equipment 39% of total investment. The breakdown of total investment (‘000 Birr) is

The financial studies show the envisaged Project provides an internal rate of return (IRR) of 123% and 95%
before and after tax respectively and a payback period 2 year in both case before and after government tax
respectively. These results demonstrate that the project is viable and provides healthy returns to the
promoters.

The part of the cost will be covered through bank loan of 19.762 million birr for financing the project on
equity to debit ratio of 70:30 and or lease financing. The balance of the investment cost 8.469 million will be
financed by promoter
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The built up are of buildings covers for Gas Station 992M2 and Cultural and gust house center 28,991.867M2
and Land scope design and garden area 16.133M2 from the total 30,000M2 of requested investment land.

Some of social economic benefits

 The project will employ 21workers in permanent employment bases for gas Station and 102
employments for cultural lodge and gust house service total more than 123 and 50 casual laborers in
construction period. Through this permanent employment bases birr 1,829,004 was expend per year
with in the project life.

The envisage Gas Station + Bête Gurage Cultural Lodge and Gust House Project: at Cheha district Endibir
town will contribute to the national economy by,

 increasing the foreign exchange income of the country by directly or indirectly contributing
to the tourism industry of the county

 Benefit from the tax of the das station and leisure center of lodge and gust house operations.

 Benefiting all the actors’ in the chain of this service industry from the rural community to tourist
operators, and others who participate in the chain will benefit from this project.

Other Strategic Significance of Project

 Service providing industry Project plays important role in economic development of the country
by creating revenue tax from occupancy and other gas Station and lodge and Gust House
activities in the Project chain.

 The Service industry Project sector is growing fast and stands as the third foreign income
earner, through truism industry.

 The Hotel and Tourism Industry contributes GDP 1426 (US$ million) or 9.2 % of the total GDP, and
create 7.2% of the job opportunity of the country in the year 2025.

Some of opportunities and government strategies considered by the owner when planning to invest of Gas
Station + Cultural Lodge and Gust House are,

 Strong effort is underway to improve Ethiopia’s image for the world tourists,

 The government commitment to use tourism industry for the fight against poverty,

 The long-term vision of the government is to make Ethiopia one of the top ten tourist destinations in
Africa by the year 2025, with an emphasis on maximizing the poverty-reducing impacts of tourism,

 The demand supply gap of Energy and Hotel industry in large and shortage of tourist standard
hotel and Lodge and Resort in Cheha district and Gurage administrative Zone,

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To full fill his desire after looking the gaps and opportunities AGANDA TRADING, PLC has Proposed
new investment on GAS STATION +BETE GURAGE CULTURAL LODGE & GUST HOUSE PROJECT at
30,000 square meter area and investment of Et. Birr 28.232 million birr for the envisaged project. The
details breakdown and others details on building area cost specification will supported at the engendering
plan and bill of quantities.

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2. INTRODUDTION
The investor is planning to invest the establishment of new gas station industry of the current most
required energy supply of the country economic development. Fuels, especially petroleum products,
are currently the most widely used source of energy in the world. The same international trend is true
in Ethiopia as well. Currently, Regular gasoline, Gasoil, Kerosene, Heavy fuel oil (HFO), Light fuel
oil (LFO) and JTA-1 are imported by Ethiopian Petroleum Supplies Enterprise (EPSE).

The Heavy fuel oil (HFO) and Light fuel oil (LFO) is imported for industrial use and JTA-1 for
aviation purpose. Gasoil and gasoline are used in the transportation, construction, industries, power
generation, agriculture, house hold cooking and lighting in rural areas.
At present, Ethiopia spends 2.5 billion USD annually on imported petroleum products (The Reporter
2016), 20% of the country’s imports of goods is purely spent on fuel (Euromoney 2014).

The consumption of petroleum products such as petrol, diesel and kerosene and others has
been significantly growing with an increase of 10% Diesel accounts for 85%-87% of oil
consumption. In the country, the fuel demand is more of driven by demand of the transport sector.
Lewin (2003) states the importance of the sector in fulfilling most transportation needs, providing
power and serving as a foundation for petrochemical business underpins the survival of other
essential industries.
The service (Hotel and Tourism) industry plays important role in economic development of the
country by creating revenue tax from occupancy and other tourism activities in the hotel chain. The
tourism sector is growing fast and stands as the third foreign exchange earner, following coffee and
oilseeds.

The Travel and Tourism Industry contributes GDP 1426 (US$ million) or 9.2 % of the total GDP,
and create 7.2% of the job opportunity of the country in the year 2007. The study conducted by
World Bank forecasted the tourism and travel industry will grow at the rate of 4% from 2007-2017.
Ninety percent of the international standard hotels are located at Addis Ababa the capital city of
Ethiopia.

The study conducted by World Bank- Pro-Tourism Strategy of Ethiopia, Japan-Embassy Hotel
Industry Study, and SNNPR tourism strategy shows that un-availability of international standard
outside Addis Ababa along the tours circuit is one of the major problem for the development of
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tourism industry of Ethiopia. Various studies also shows that the supply of bed rooms of Ethiopia is
least when compared to other African courtiers has highest income from tourism sector but with
lowest number of tourist attraction heritage and natural resources cites. The hotel industry and
tourism growth expected to be increased due to the following development observed at the senior
and potentials,

2.1 RATIONAL BEHIND THE PROJECT

Some of the rational for establishment of the envisage Gas station + Bete Gurage Culture Lodge and
Gust House Center services rather energy and hotel service supply of which establish top quality
road side recreation center, sustainably supply fuel, oil& lubricant products and cultera lodge and
gust house product service for their customers and a good road side national and international truest
moment are,
Policy: Federal/Regional laws that promote good business practices. Central to service industry
operation is the firm commitment to excellent service delivery & maximum customer satisfaction.
The policy strongly promote customer focus is the philosophy guiding the project activities. New
investment in fuel and 0il & lubricant and business industrial sector which have a great advantage
for others investment development currency generating directly or indirectly contributes to the
growth of industries through this energy supply project.
Labor: There is plenty of skilled and semi-skilled labor in Ethiopia. The country has a good
education system that churns out a number of graduates in most key professions at all levels.
Therefore for this project there is an opportunity to employees’ cheap labor.
Availability of Gas Station Raw Materials: The principal raw material is petroleum products.
Petroleum products supply ensuring the distributed consistently and timely to fuel station consumers
through an effective and efficient supply chain system. Distribution of fuels through effective and
efficient way includes the concept of quality or keeping the fuel standard of the country.

Availability of Cultural Lodge and Gust House Raw Materials: The principal raw material is
foods, Beverage, Snacks and bed room material products supply ensuring the distributed consistently
and timely to the consumers through an effective and efficient supply chain system. Providing of
leisure goods and service through effective and efficient way includes the concept of quality or
keeping the national and international standard of the country.

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 Market: The proposed service gas stations and Bete Gurage Culture Lodge and Gust House’s
Center operational activities, which involves selling petrol products to motorists, though, it also
includes the sale of convenience items through the convenience of oil and lubricants with smart
cafeteria and Culture Lodge and Gust House service. Smooth and reliable supply of products in the
country, all partners involved in the project supply chain need to follow integrated approaches and
always shares a big picture. The government support this vibrant economic growth needs to be
supported by a robust, safe and operationally sustainable service industry sector. This selling of
petrol and diesel products and hotel and tourism service high market demand supply gap, in the
country is an opportunities for this envisaged project.

2.2 SOCIO-ECONOMIC JUSTIFICATIONS

The project is expected to contribute in the Ethiopian fuel demand supply gape to rural and urban
area demand supply gap of Hotel industry in the country. It is important for the country to contribute
partly through the employment opportunity for the non-job women’s and youths to generate their
income. The project will totally employ mortmain 50-80 casual labour for the establishment phase
and 123 skilled workers for technical and production staff in the project operation and
implementation phase respectively. This employment will generate salary & wage income of 1.8
million birr per annum at the project initial year and then become increased throughout the project
life.
The Federal as well as the Regional governments would also receive substantial amount of revenue
in the form of different taxes including profit tax.

2.3. COMPANY /APPLICANT

Name of Owner AGANDA TRADING, PLC

2.1.1 Nationality: Ethiopian

2.1.2 Type of business: Gas Station + Cultural Lodge & Gust House Service
2.1.3 Full Address : Addres Mobile: +251911300650
Gas Station + Bete Gurage Cultural Lodge & Gust House
Project Name:
Service
2.1.4 Status of the Project: New
2.1.5 Proposed Site: Cheha Woreda, Gurage Zone, SNNPRS
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Specific location: Specific area Amora meda at Endibir town
Size of proposed land: 30,000M2
Total estimated capital: 28.232 Million Birr
Legal Form of organization: PLC
Registering office: Gurage Zone and Cheha Woreda Investment Office
Taxpayer Identification No.: ----------------
Right of Occupancy: PLC properties
project Period: 10 years (2020-2030)

2.4 PROMOTER’S PROFILE

The anticipated “Gas Station and Cultural Lodge and Gust House Project” is initiated by the
AGANDA TRADING, PLC, which is owned by plc menbers . The share of the ownership is held
by equaly contribution to the company. Mr.Wonidmu Biza is the general manager of project. In
view of his work experiences have a very reputable experience in the field of agricultural farm and
products businesses, management. He has also started in agricultural commercial business at Cheha
district, production and value added processing on fruit processing and marketing. Mr.Tasena
Habite is the vice manager of the project. Mr.Tasena Habte educational back ground is BA in
Management, from Bahiredare universty. He works fiber supplying and foreign company agent and
other retail sales and vastly involved in money management and administrationsIn. Both of them has
had more than 10 years of work experience in the area of similar business and vastly involved in
money management and administrations.

Hence, this envisaged project was establishment of a new Gas Station and Cultural Lodge and
Gust House Project, with specific focus on Gas Station and Cultural Loge and Gust House service
as its immediate objective. Nevertheless, other investment high value type of agricultural crops will
include in value addition processing based on Cheha woreda potential and results of future studies.

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3. BACKGROUND INFORMATION
3.1 STATUS OF HOTEL, LODGE, RESORT & TORISM SNNPR IN SNNPR
3.1.1 CURRENT HOTEL AND TOURISM INDUSTRY
Tourism is vital for the Ethiopia economy providing 9.2 % of GDP and 7.1 % of the total
employments in year 2007 according to World tourism organization report valued at around US$
1426 million. The long-term vision of the government is to make Ethiopia one of the top ten tourist
destinations in Africa by the year 2020, with an emphasis on maximizing the poverty-reducing
impacts of tourism.

The basis of Ethiopia’s tourism product is cultural, historical and natural sites. This demand of
tourism products of Ethiopia could be split into two distinct product identities, a) a northern historic
circuit and b) a southern ethnological and nature based circuit. These two products account for more
than 95% of tour packages sold to Ethiopia

Figure 1: Tourism circuit of Ethiopia

International tourist arrival to the Region has shown a gradual growth every year. Most international
tourist comes to the SNNPRS to appreciate the untouched culture of the diverse ethnic communities
and the associated natural attractions. The Tiya Tikil Dingay is located in the Guragw Zone of the
Soddo district which is one of the local and foregn tourim center of SNNPR of Ethiopia. The ethnic
communities in Debub Omo including Hammer, Bena, Mursi, Ari and their cultural practices as well

16
as the Dorze and Konso people cultural practice are very well-known and visited by many
foreigners. Besides, NechSar and Mago National Parks are among the natural attraction found along
the destinations visited by the tourist together with the cultural practices of the communities.

In the recent years, the tourism sector in SNNPRS is encouraging and shows a promising
performance. The great promotion made for the Ethiopian millennium had stimulated many
Ethiopian Diasporas and foreigner to visit the country in 2008. Tourism earning in the region
increases by 46.6 % from 12,739995 Birr in 2007 to 23, 852410 Birr in 2008 (almost 50%
increment).

3.1.2 SOUTHERN REGION TOURISM TREND

This growth rate in tourist arrivals in 2006/7 to 2007/8 due to Ethiopian millennium quite impressive
at 208% compared to the growth rates achieved in 2008/9 to 2009/10 which is 31 %. The average
annual growth of tourists flow to SNNPR region town has shown 70 % at national tourist’s arrivals
and 93 % at foreign tourist’s arrivals and the target included Gurage Zone.
Table 1: Summary of International Tourists by Purpose of Visit
Summary of International Tourists by Purpose of Visit 2006-20010
Year Nationals arrivals Foreigner arrivals Total
No % increase No % increase No % increase
2006/7 19136 2532 21668
2007/8 57904 203% 8868 250% 66772 208%
2008/9 45212 -22% 8674 -2% 53886 -19%
2009/010 58405 29% 12452 44% 70857 31%
Average 45164 70% 8132 97% 53296 73%
Source: SNNPR Tourism Office
3.2 PETROLEUM INDUSTRY
3.2.1 FUEL SUPLLYING SYSTEM IN ETHIOPIA
Since Ethiopia does not produce oil, to meet the country’s oil requirement, the country imports fuels
from oversea. By the year 2016 Ethiopia buys 100 percent of the country’s jet fuel consumption,
800,000 metric tons and 60 percent of diesel, 1.2 million metric tons from state-owned Kuwait
Petroleum Corporation (KPC) that supplies the products directly from Kuwait using its own fuel
tanker vessels. 30%-80% percent of Ethiopia’s benzene consumption is bought from Sudan. The
remaining are bought from international oil trading firms through an international open tender
process
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Fekadu (2013) mentioned that at present, liquid bulk cargo tanker trucks are transporting fuel from
Duraleh petroleum terminal of Djibouti port and from Sudanese refinery at El Geli located 42kms
north of Khartoum to the hinterland. The government has an intention of increasing the number of
depots, but also to elevate the capacity of the existing depots. Accordingly, in Awash NPRDA depot
a project for installation of additional 30,000 cubic meter tank is undergoing.

Bulk Distribution Companies (Oil Companies): These companies have been licensed by the MoT
as bulk distributors. They purchase oil from EPSE and distribute the product either through their
Retail Network or directly to commercial customers. At present, there are thirteen Oil Companies in
the country; namely Oil Libya, Total, National Oil Ethiopia (NOC), Yetebaberut Beherawi
Petroleum (YBP), Kobil, TAF, Nile Petroleum, Wadi Alsundus (WAS), Dallol, Olway, Gomeju,
Yeshi, and Getnet. All are local companies, except Libya, Total, Nile and WAS. As per the monthly
fuel uplift report compiled by EPSE Oil Libya, Total, National Oil Ethiopia (NOC), Yetebaberut
Beherawi Petroleum (YBP) and TAF uplift more than 85% of the countries consumption.

Figure 2: Petroleum product imported into the countries from

Source: Data source EPSE - in metric tons

The country consumes daily one million liters of benzene, 6.5 million liters of diesel and two million
liters of jet fuel. The annual kerosene consumption is 260,000 metric tons. The country’s annual fuel
consumption has been growing at a rate of ten percent per year
18
 3.2.2 FUEL AND PETROLEUM PRODUCTS BUSINESS LEGAL STATUS
There are many key players in the overall supply and distribution of fuel in Ethiopia, some of them
Ministry of Mines, Petroleum and Natural Gas (MoMPNG). Ethiopian Petroleum Supply Enterprise
(EPSE): EPSE, Horizon Terminal Limited and Nile Petroleum Terminal and Bulk Distribution Companies
(Oil Companies.

3.2.3 PETROLEUM SUPLLYING REGULATORY BODIES

There are different actors of organization responsible for petroleum regulatory but the key regulatory
bodies Ministry of Trade (MoT). The MoT was re-established in August 1995 under the
proclamation No. 4/1995. The Ministry was again reorganized with a proclamation No. 619/2003.
The main objectives of the ministry are to ensure a modern fair trading practice. The ministry has
three main responsibilities:

a) Provides a trade license for Oil Companies and dealers (fuel station operators).
b) Regulates and establishes the price of fuel in the country by preparing a price build up that shows
the price structure from purchasing price at Djibouti and Sudan up to the pumping price at the
station. The price build-up is used by all stakeholders involved in the marketing and distribution
process (including transport rate to be paid to Bulk Road Vehicles).

c) Calibrates Bulk Road Vehicles and dispensing pumps/meters installed at depots and stations.

The Ministry retains regulation of the entry of petroleum marketing firms in the downstream sector.
It requires the Oil Company to construct a depot that can store a minimum of 500,000 liters and
have a minimum of 6 filling stations before issuing a license to operate as oil distributor in
Ethiopia. Although, the requirement is not implemented strictly

19
4. GENERAL DESCRIPTION 0F THE PROJECT
4.1 LOCATION OF PROJECT AREA
Cheha is one of the Gurage Zone woredas in the Southern Nations, Nationalities, and Peoples'
Region of Ethiopia. This woreda is named after one of the sub-groups of the Sebat Bet Gurage, The
subsistence agriculture in Cheha is primarily based on enset, together with corn, sorghum and
chickpea, as well as some annual vegetables and root crops. Important cash crops include teff and
Niger seed.
Cheha has 87 kilometers of all-weather roads and 49 kilometers of dry-weather roads, for an average
road density of 237 kilometers per 1000 square kilometers. Based on the 2007 Census conducted by
the CSA, this woreda has a total population of 115,951, of whom 56,851 are men and 59,100
women; 8,992 or 7.76% of its population are urban dwellers. Geographical coordinate of the site
8° 10′ 0″ N, 37° 45′ 0″E. The project location is Amora Meda(Endibir town) SNNPR, Gurage
Zone, Cheha Woreda and its geographical coordinates 807’N and 37056’E at 2130 m.a.s.l. The
envisage project is 256 km away from Hawssa the capital city of SNNPRS and the project location is
far way 160 km from Sebeta National Rail-way station. Cheha woreda is suitable for fuel supply to
the costumers and site lies along Cheha to Hosaina, Hosaina to wolayita-Kebeta Tembaro asphalt
road and Hosaina to Alaba kulity, Alaba kulity to shashemen viea Hawassa Hwassa town. Secondly
Cheha to Gubire eown to Butajira to Ziway to Shashemen Via Hwasa town international road and
Surronding towns Gubere, Inidibire and others of Cheha districts with high number of vehicles and
tracks are passed within a 24 hours along the project site. Cheha also one of newly industry
development center of Gurage Zone t requires modern cultural lodge and Gust house for customers.
Therefore, the localities of this project are technically feasible for establishment of “Gas Station +
Bete Gurage Cultural Lodge and Gust House” which is owned by AGANDA TRADING, PLC
as it full files the project objectives.

4.2. TOPOGRAPHY OF THE AREA

Topography of the proposed project area is generally characterized by gentle slope. The project site
is located within the Part of the Gurage Zone, Cheha is bordered on the south by Enemorina Eaner,
on the west by the Oromia Region, on the north by the Wabe River which separates it from Abeshge
and Kebena, on the east by Ezha, and on the southeast by Gumer and Geta. The administrative center
for Cheha is Endibir; other towns include Gubre. Elevations in this woreda range from 1700 to 3000

20
meters. Rivers include the Gotam, Gogeb, and Metrekat. Local points of interest include the Acho
Falls on the Wabe River which is 60 meters in height, and Gotam Falls on Gotam River near. An all-
weather road was built in 1963 which connects Emdibir north to Addis Ababa, and south to Hosaena
by way of Welkite. It generally drains towards a Give stream located on the eastern side of the
proposed land. The topography of the project area generally indicates availability of favourable
opportunity for low cost installation of infrastructures and land preparation requirements

4.3 CLIMATICA CONDTION OF THE PROJECT AREA

Cheha district is categorized in to two main climate zones of the mid to highland. The project area
climatic condition is characterized by wind W at 8km/h and 32% humidity. The project area could
be broadly categorized as highland, sub humid moist highlands. According to traditional
classification of agro-climatic zones in Ethiopia; and, considering the high rainfall, medium to high
altitude (above 1900 to 3000 m.a.s.l.); the project area might be classified as ″wet worm″. The
specific features of the project area in terms of temperature and rainfall patterns are described below.
Temperature: According to the climatic data obtained from the Ethiopian Meteorology Agency
(Gurage); the average minimum and maximum temperatures of the project area are 27 o C.

4.4 THE SOIL OF THE PROJECT AREA

Soil Conditions of the Project Area: Results of soil sample analysis of the regional soil laboratory
from the project area indicate Abolus soil, the district major soil textures are Nitosols soil,
Vertisols have wide distribution; are heavy, black clay soils and sandy with strong coarse structure.
The PH of surface soil ranges from 5.5-7.1, which implies moderately acidic and alkaline soils.
These soils are chemically and physically suitable for teff and Niger seed vegetables cultivation. In
addition, the proposed investment area refers to water logged; it needs water drained systems that
occur on almost flat to gentle slope. The proportion of the land is suitable to most of annual crops.

4.5 WATER RESOURCES

The project is situated distance from the river, more than 1km away. So water is not a big problem in
this area since many homes depend on water from ground water. The project is not expected to have
any adverse impact on ground water quality as the level of waste emanating from the project will be
low and directed to the properly installed waste hip tank

21
4.6 SOCIO-ECONOMIC ENVIRONMENT
4.6.1 POPULATION PROFILE
The average population density of the district is about 800 people per km2. According to the data
obtained from the CSA offices the population growth on average is 2.2%. The national average
annual population growth rate is estimated to be 3%. (Source: national office of population).
Concerning sanitary conditions, 97.22% 0f the urban houses and 23.32% 0f all houses and access to
safe drinking water at the time of the census; 44.12 of the urban and 10.63 of all houses had toilet
facilities.

4.6.2 INFRASTRUCTURE AND SERVICES

When compared with others neighboring districts, Cheha district has good infrastructure services,
such as roads, Electricity, Mobile networks and access to water. Cheha has 87km 0f all-weather
roads and 49kms 0f dry-weather roads, for an average road density of 237 kms per 1000 square
kilometers.

Telecommunication: According to the data collected from the Bureau of Finance and Economy, the
district town and the surrounding PAs in the project area have access to different telephone services,
such as, wire line, mobile telephone service, and wireless.

Financial Institutions: There is one Government Bank and the private bank is available in the
administrative center of Indibir town. Those entire banks are found in the project district at a near
distance of the project specific location.

4.6.3. SETTLEMENT PATTERN

Most of inhabitants of the project area can be characterized as crop growers. As usual trend on the
same agro ecology of Ethiopia, Crops producers lives in a closest manner. Most of the crop
producers are engaged in cash crop production like crops teff and Niger seed vegetables others
cereal and horticultural crops, thus the project is not affected the inhabitants.

4.6.4 HEALTH FACILITIES

Regarding community’s health facility, health post and private clinics are available in the project
area. In addition to that, project area near to Indibir town Hospital and Health centers as well as
private clinics are accessible within short distance. Therefore, most of the locality people have
access for medium level health services in their area.

22
5. THE PROJECT
5.1 PROJECT DESCRIPTION
The owner is planned to invest on the corner of Cheha district along the Indibir town road side to
build a Gas station + Bete Gurage Cultural Lodge and Gust House center to provide service with
fuel retail convenience store and cafeteria and modern local and foreign tourism focus hotel service
at the intersection of Hosiana to Weliket road. The construction and operation of the project is in
specific location of Aomera Meda at Indibir town which will have an opportunities positive
impact on the regional economy, and surrounding communities. The proposed Gas station and
convenience + Bete Gurage Cultural Lodge and Gust House are situated at the entrance to the
INdibir town which enhances the woreda earning.

The project is in line with government interest and policy which focuses on fuel shopping to the
local and international car movement. Furthermore the construction of the new gas station service
also stimulates the economy through the induced effects of private energy consumption and tourism
moment by this proposed gas station service and convenience cafeteria. In this regard, construction
of the proposed gas station with convenience cafeteria service results in payments for labour services
that ultimately increase household income.
The project also develop Bete Gurage Cultural Lodge and Gust House to serve as a place
where tourists, visitors, vacationers and leisure travelers could stay overnight, dine, and enjoy
and offer a complete package Bete Gurage Cultural Lodge and Gust House lodging ,dining, and
recreational services for tourists/visitors to international and domestic ones which enhance and
contributing for the district economy development.

Through, this intended investment in the Gas station with relevant service of parking and car
washing, cafeteria & restaurant, and oil & lubricant shop and Cultural Lodge and Gust House
services will be realized with an initial investment of Birr 28.232 million for the realization of the
intended project. The project area has 30,000 M2 will be acquired on free from lease. The
realization of the project will open up about 50 temporary and 123 permanent employment
opportunities during the project operation and implementation phase, respectively.
The investor has already commenced the design and business feasibility study activities of the
project and expects to conclude sooner. Following the acquisition of land the project phase activities
will be commenced within six months duration. The investor has intended to speed up the project
23
 phase activities with partner collaboration of ETHIOPIA OIL COMPANY by made negotiation and
using professional in project management and qualified contractor for the civil works.

5.2 PROJECT ACTIVITIES

Gas station is special properties where the retailing or selling of petrol product is carried out. In
addition, many other services exist like car service and washing, oil & lubricant shops, stores serve to
customers. Factors considered in giving value to such a petrol station are mainly the design in terms
of accessibility, volume of traffic along the station's frontage, speed of the traffic; size of the total
station especially the forecourt.
Gas Station Cafeteria is a major special property investment with in Gas station. The most important
factor affecting the value of a Cafeteria is its profit-earning capacity derived from the accommodation,
catering, and the facilities for the Cafeteria business.
Bete Gurage Cultural Lodge and Gust House: All accommodations are decorated with eco-friendly
feature designed by lacquer wares, waving bamboo and teak wood in Bete Gurage traditional style.
These components may be greatly influenced by the age of design, planning, and conveniences of the
services in question location and parking facilities are of utmost importance. Cultural Lodge and
Gust House will have a plan to provide accommodation and amenities such as 130 different designs
single, classic family and suites, rooms, assembly Hall, Sauna with reception, bath, rest room,
changing room and foot bath facility, Gymnasium with international standard machinery and other
facility, Swimming pool, all other Service required for this Lodge and gust house national standard of
Ethiopia. This project component will has beautifully landscaped gardens with indigenous plat trees,
which will host weddings, meetings, seminars or other events. And also it has restaurant with bar,
Laundry services ……etc.
Therefore, to realization of the proposed project requires certain activities the need to undertake
during the project phase. During the Project phase, which is estimated to take about 6 months, the
major activities to be undertaken includes
Design and study and Civil work construction
Gas station, track parking and washing facility
cafeteria, and shop building construction
Car wash and oil change for small cars, lubricant shop, and office.

24
 Cultural Lodge and Gust House: Different class bed room, Sauna both, gymnasium,
Swimming pool, beautifully landscaped gardens, different gam center, modern restaurant and
bar, shopping center like supermarket and children gam center
International standard machinery and furniture and fixture installation

5.3 PURPOSE OF THE PROJECT

This profile envisages the establishment of modern Gas station and Bete Gurage Cultural Lodge and
Gust House project that contains fuel retailing and local & foreign tourist costumers loge and gust house
services by applying good Gas station and Cultural Lodge and Gust House management and to link
Gurage Zone tourism center to Cheha via different route of international road and at Indibir town.
The overall goal of the project is to contribute towards the economic development of Ethiopia through
using the existing investment opportunities in the Country and taking advantage of the expressed policy
incentives that emphasize on greater commercialization of Service industry and enhancing private sector
development. This Gas station and Bete Gurage Cultural Lodge and Gust House project with high
standards and quality service to raise new capital from outside partner and or lenders and ensuring
optimal economic returns as well as socially and environmentally acceptable station that will attain full
service within third years starting from the 2022 investment years.

5.4 PROJECT OBJECTIVES

The project’s main objective is to implement on power and energy supply and local & foreign tourist
focus lodge and gust house service investment project using in Gas station and Bete Gurage Cultural
Lodge and Gust House services especially bearing in mind that crate a tourist corridor and local energy
consumption. The specific objective s of the project is:-
To ensure viability of the business which are planning to start improve the level of services to
match those offered in one of the Gurage Zone Woreda of Cheha along with the international
road of the woreda intersect road line.
To link different surrounding woreda and towns in and out of Gurage zone in services industry
by creating a tourist corridor center and enhancing local customers.
As a business firm one of objective of the investment is to earn higher income from the demand
supply gap exists in the sector at large and from the local energy consumption and tourist
markets.

25
 5.5 INDUSTRY ANALYSIS
5.5.1 OIL INDUSTRY
The oil industry is involved in a global supply-chain that includes ordering, transportation,
import/export facilitation, inventory visibility and control, depot administration, distribution
management, customer service and information technology. Realizing the synergies that exists in
these functions, many companies have extended the concept further upstream and downstream; the
supplier of suppliers and customer of customers.

In recent years, there have been concerns and many have argued that the oil and gas industry may
have entered an era of very scarce resources. However, in reality, the resources are not the cause of
supply constraints, rather putting these reserves into production and delivering the final products to
consumers.

5.5.2 HOTEL SERVICE INDUSTRY

The hotel, lodge & resort service industry is the largest segment of the Ethiopia service industry
sector, contributing more than 16% of its share of gross domestic product. It provides employment,
directly and indirectly, for about 108 000 people throughout its value chain and related industries. It
supports many businesses and provides a strong platform for rural development, as well as the
government’s zero-hunger goals, as it is the main supplier of a protein diet. It has evolved, over more
than 100 years, from basically a set of industry activities into a complex and highly integrated
industry.

The total number of international hotel, lodge and resort in Ethiopia is steadily increasing. As a
gateway to all international inbound, outbound and transit tourists/passengers, Addis Abeba has been
taking the lion’s share in the country’s tourist arrivals hosting an estimated 95-99% of the total
international tourist arrivals, they said. Being a popular conference venue is also helping the city
attract more visitors each year. Conference tourism has a great potential and is poised to gain greater
significance.

The overall growth and the continued progress in the service industry are forecast by the World
Travel & Tourism Council to be 4.8% per annum over the coming decade. Increasing the supply of
high quality, top end hotel accommodation through hotel construction is necessary for improved
competitiveness and the economic success of the sector,(said Matthew Weihs), According to Ebisa

26
C. Gobena and Andualem H. Gudeta of Awash International Bank, whose study “Hotel Sectors
Investment in Ethiopia” is published on Journal of Business Management in 2013, the hotel industry
in Ethiopia is signified by a substantial gap between demand and supply. This creates a big business
opportunity for those planning to enter into the sector. Considering its pivotal role in the economy,
particularly employment and food security, the industry’s long-term sustainability needs to be
prioritized. It is vital to improve the competitiveness of various segments of the value chain,
especially those aimed at lowering poverty. The hotel service industry in Ethiopia is signified by a
substantial gap between demand and supply. This creates a big business opportunity for those
planning to enter into the sector.

5.6 PRODUCTS AND SERVICES

5.6.1 GAS STATION

Through this Gas Station’s retail location (where most profits are realized), the cafeteria will provide
an expansive variety of food, beverage products. A vast majority of the revenues (not the profits)
will from the sale of gasoline, Kerosene and diesel petroleum products.. Below description is the
products offered by the owner of gas station.
5.6.1.1 FUEL SALES

This envisaged project expects to sell more than 200,000 litter of fuel per week, 800,000 liters per
month and 9,600,000 liters per year to motorists within the target market area. The oil and lubricant
is sales 96,000leters per year. This is by far the largest revenue center for the business, but it does
not generate an overwhelming amount of profit.
5.6.1.2 CAFETERIA SALE

The primary profit center of the Gas Station will be the retail sale of fresh food and packaged food
items, prepared food items, beverages (sodas, coffees, and bottled beverages), as well as other
merchandise such as small toiletries. The Company will offer an expansive number of these items
throughout the location. On each item sold, the business generates approximately 40% of operating
income

5.6.2 CULTURAL LODGE AND GUST HOUSE

The first priority of the lodge and gust house is to give the best service and satisfaction to our
customers through environmental sustainable practices. The lodge and gust house will offer
27
excellent services 24-hour availability to guest by well-trained staff. The lodge and gust house is
integrated with the ecofriendly surroundings and historical side seeing. The services we offer in best
classic bed room, recreational activities and entertainment will be provided with nature based. The
lodge and gust house provides chances for relaxation, experiencing the nature as well as the tradition
cultures of locals. There will be restaurant, café, bars, a full-service spa, health center (sauna, gym
and meditation class), recreation center (one outdoor swimming pools, basketball court, tennis court
and playground), children club and weeding Park. Additionally, there will be also a restaurant and
bar on the boat with traditional style dishes. For the business convenience, one medium meeting
rooms and a conference room will be provided. Free Wi-Fi with high-speed Internet access is
available in all resort areas. Additionally, the project will provides packaged food goods, bottled
beverages, and ancillary merchandise such as toiletries, automotive products, and other small life
essentials.

5.7 TECHNOLOGY AND ENGINEERING

5.7.1 PRODUCTION PROCESS
Cultural Lodge and Gust House: The main processes of establishing modern Cultural Lodge and
Gust House at Cheha woreda include studying the market, securing land, constructing buildings such
as restaurant, bar, bead room gam center, Swimming pool, gym center, landscape green area,
equipping and furnishing the buildings and starting the operations of the businesses.
Gas Station: The main processes of establishing at Cheha woreda modern gas station building
include fuel filling machinery and canopy, car wash, car service, oil and oil lubricant shop and
cafeteria room equipping and furnishing the buildings and starting the operations of the businesses

5.7.2 MACHINERY AND EQUIPMENT

5.7.2.1 GAS STATION MACHINERY AND EQUIPMENT

For the purpose of this study we are assuming that good foreign manufactured machinery costing
and equipment around birr 3.7 million will be able to give the desired quality of output. The cost
implications would depend on the capacity of the machine. All machinery are imported and foreign
manufactured state-of-art, eco-friendly. For the detailed information the total cost show below the
table 2.

28
Table 2: Fuel Station Machinery and Equipment Required & Related Cost
UNIT
COST ITEM Unit Qt TOTAL COST (BIRR)
COST
Fuel station Equipment and tools
Machinery
Lifting rack set 8 250000 2000000
Dispensing fuel pumps set 4 250000 1000000
Sub-total 3,000,000
Air compressor Set 2 70,000 140,000
Water Pump Set 2 150,000 300,000
Hand tools Set 2 30,000 60,000
Standby generator no 1 200,000 200,000
Sub-total 700,000
Grand total 3,700,000

5.7.2.2 LODGE AND GUST HOUSE MACHINERY AND EQUIPMENT

Machinery and equipment required for a modern cultural lodge and gust house could broadly be
classified into different categories. These are general facilities, bed room furniture,(includes beds,
mattress, blankets, bed sheets, tables, chairs, cap boards, etc), office machinery, hotel furniture and
equipments (tables ,chairs, glasses etc), restaurant furniture and equipments ( tables, chairs,
refrigerator, glasses, etc), kitchen utensils ( forks, spoons, trays, dish, deep freezer, etc) assembling
hall and recreation center, gam center and bar machinery and equipments Estimated cost of birr
7.672 million such machinery, furniture and fixture for a traditional lodge and gust house and
restaurant is estimated in table 3 bellow.
Table 3: Cultural Lodge& Gust House Machinery and Equipment Required & Related Cost
Units UOM Quantity Rate Cost
USD USD
GENERAL
TV Set Set 2 3,500 7,000
Multimedia (DSTV) set 2 2,045 4,090
Conference Room Equipment Set 2 4,500 9,000
Internet Eq Set 1 1,200 1,200
Sound and Security Systems Set 2 3,682 7,364
Health club equipment set 1 5,000 5,000
Sub-Total 33,654
FRONT OFFICE
Fax machines set 2 409 818
Money Safe set 40 164 6560
Office Requirements sets 1 1,136 1136
Computers set 6 682 4092

29
 Units UOM Quantity Rate Cost
Printers set 2 227 454
Sub-Total 13,060
BED ROOMS
TV Set Set 75 540 40,500
Refrigerator set 75 800 60,000
Fridge Medium Set 1 545 545
Sub-Total 175,291
KITCHEN FACILITY
Kitchen equipment set 2 1,818 3,636
Cold Rooms Set 1 4,318 4,318
Dish Washing Eq Set 2 3,500 7,000
Restaurant equipment set 1 5,455 5,455
Sub-Total 20,409
OTHER FACILITY EQUIPMENT
Generator set 1 6,500 6,500
Laundry and Washing machines Set 1 4,545 4,545
Solar Systems set 1 4,545 4,545
Children outdoor and indoor game equipment’s and set 1 3,000 3,000
accessories
Others set 1 1,136 1,136
Sub-Total 19,726
Total Cost In USD 262,140
Grand Total in Ethiopia BIRR 7,672,837.80

5.8 PROJECT COMPONENT PRODUCTS AND MARKETING PLAN

The annual receiving and sales program is assumed that this Gas station will start operation in 2020
year. The project volume will be required fuel and Oil & Lubricates and cultural lodge and gust
house at full capacity (100%) in the second year and increased through the project periods. The
detail of receiving and sales program is as shown in Table 4 below.
Table 4: Fuel and Oil and Lubricates marketing plan

GOODS ITEM UNIT PROJECT YEARS

Gas Station Y1 Y2 Y3 Y4 Y5-y10
Diesel Lit 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000
Gasoline Lit 4,800,000 4,800,000 4,800,000 4,800,000 4,800,000
Kerosene Lit 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000
Oil and Lubricates Lit 96,000 96,000 96,000 96,000 96,000
Cafeteria
Break Fast Sales daly Number 120 126 132 139 146
salse
Soft Drinks and Bottled Number
60 63 69 76 84
Water

30
Car Wash Services Number 12 14 16 16 16
LOADGE AND GUST HOUS REVNUE ASSMPTION
Bed Room Number 130 130 130 130 130
Food Daily Estimated Number
33 50 74 111 167
Sales -
Beverage Daily Estimated Sales Number 130 195 293 439 658
Other Operation Daily Packge 41 41 41 41
41
Estimated Sales

5.9. UTILITIES OF GAS STATION & LODGE AND GUST HOUSE

Gas Station: The major utility required by this gas station is electricity and water. Annual electric
consumption of the plant at 100 per cent capacity utilization rate is estimated at 57,600 kW per year
and the estimated cost at the rate of birr 0.46 per kWh will amount to birr 26,672. Annual well and
potable water will be required for car washing and personal use for restaurant & café for other
facility. Annual water requirement is estimated to be 1,200 cubic meters and water consumption at
the rate of birr 4.63 per cubic meter amounts to birr 5,156 per year.
Cultural Lodge and Gust House: The major utility required by this gas station is electricity and
water. Annual electric consumption of the plant at 100 per cent capacity utilization rate is estimated
at 1056000 kW per year and the estimated cost at the rate of birr 0.46 per kWh will amount to birr
528,000. Annual well and potable water will be required for car washing and personal use for
Cultural Lodge and Gust House for other facility. Annual water requirement is estimated to be 27900
cubic meters per annum and water consumption at the rate of birr 4.63 per cubic meter amounts to
41,850 per year.

31
6. MARKET STUDAY AND APPLICATION
6.1 GAS STATION MARKETING STUDY
6.1.1 OVER-VIEW OF PETROLEUM PRODUCTS CONSUMPTION
According to Federal Democratic Republic of Ethiopia, 2011 CRGE report, during the last five years
the oil demand has increased on the average by 10% per year. Diesel accounts for 85%-87% of oil
consumption. In the country, the fuel demand is more of driven by demand of the transport sector.
Lewin (2003) states the importance of the sector in fulfilling most transportation needs, providing
power and serving as a foundation for petrochemical business underpins the survival of other
essential industries.

The figure below shows the trend of importation of main fuel into the country by product type.
Diesel (Naphtha): As shown in Fig. 1 between the budget years of 2010 to 2015 the amount of
diesel volume was grown exponentially. The demand is growing due to boosting of infrastructure
projects in the country, such as road, rail & dam.

Gasoline (Benizen): It is the second fuel imported in Ethiopia, in between 2011 to 2015 the amount
of gasoline imported rapidly change (Fig. 1). The demand is growing due to increasing number of
automobile in the country and introduction of Bajaj into the country

Kerosene (Nech gas): Kerosene is the third fuel type the country imports in large quantities. Form
eleven consecutive budget years between 2003 and 2015 the import of kerosene was linearly
increase both in total volume imported (Fig. 1). The demand is growing due to increasing number of
EAL destination.

32
 3,500,000
Value in Metric Tons
3,000,000
2,500,000
2,000,000
1,500,000 Gasoil

1,000,000
Kerosene
Gasoline
500,000
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Source: EPSE - in metric tons
Figure 3: Trends in Petroleum products Consumption in Ethiopia

6.1.2 PAST SUPPLY AND PRESENT DEMAND

6.1.2.1 PAST SUPPLY

The demand for petroleum products is directly related with number of agro-industry Company and
urbanization growth is another factor for the growth in demand for petroleum products. However,
the most determining factor is growth of energy required service particularly in transport and rural
industry. The supply trends and its growth rate of petroleum products are presented in Figure1-
above. Total value of petroleum products import and supply from 1979 to 2015 year the total
imported supply is surged by 7% (Diesel (Naphtha), 6% (Gasoline (Benizen) and 6% (Kerosene):
During the last five years the oil consumption demand has increased on the average by 10% per year.
The country, fuel demand is more of driven by demand of the transport sector.
The government supports this sector in fulfilling most transportation needs, providing power and
serving as a foundation for petrochemical business underpins the survival of other essential
industries.
6.1.2.2 THE PRESENT DEMAND

According to the Federal Democratic Republic of Ethiopia, 2016 CRGE report, the country
consumes daily one million liters of benzene, 6.5 million liters of diesel and two million liters of jet
fuel. The annual kerosene consumption is 260,000 metric tons. The country’s annual fuel

33
consumption has been growing at a rate of ten percent per year. In 2017 the fuel consumption is
expected to surge to 3.4 million metric tons
6.1.2.3 DEMAND PROJECTIONS

The future demand for fuel very much depends on the growth of the industrial sector. However, in
view of the current trends is in economic growth and government’s plan to invest millions of dollars on
infrastructure, hydropower projects, mining and others a sector. The current gaps between demand and supply
in the petroleum sector are wide.

In accordance consultant analysis the Ethiopia fuel such as Diesel, Gasoline and Kerosene supply
average growth rate tends from 1997 to 2015 the consumption growth rate of kerosene (6%),
Gasoline (6%) and diesel (7%) are recorded. .
Accordingly, for this envisaged project demand forecast, based on the analysis indication of the
increase frequency order of 6% for present supply and 10% for projected demand and total average
annual fuel consumption of the country 1,603,629 metric tons (1997-2015) was taken initial
projected demand analysis for the next eleven year. For the detailed information the consultant
analysis is shown below the table-5.
Table 5: kerosene, Gasoline and Diesel Demand Projections (M.Tons)
Present Imported Present Demand -Supply
Supply (6%) Demand (10%) Gap
2020 2,555,940 3,437,520.50 881,580.01
2021 2,709,297 3,781,272.55 1,071,975.63
2022 2,871,855 4,159,399.81 1,287,545.07
2023 3,044,166 4,575,339.79 1,531,173.77
2024 3,226,816 5,032,873.77 1,806,057.79
2025 3,420,425 5,536,161.15 2,115,736.21
2026 3,625,650 6,089,777.26 2,464,126.82
2027 3,843,189 6,698,754.99 2,855,565.52
2028 4,073,781 7,368,630.48 3,294,849.65
2029 4,318,208 8,105,493.53 3,787,285.85
2030 4,577,300 8,916,042.89 4,338,742.75
Source: Consultant Analysis Results

6.1.3 MAIN CUSTOMERS

The project main customer’s root lies along side of Cheha to Hosaina, Hosaina to wolayita-
Kebeta Tembaro asphalt road and Hosaina to Alaba kulity, Alaba kulity to shashemen viea Hawassa
Hwassa town. Secondly Cheha to Gubire woreda to Butajira to Ziway to Shashemen Via Hwasa
town international road and Surronding woreda Gubere, Imidibire town. Through this a number of
34
may translate high traffic into the Gas Station’s convenience store and a number of vehicle and track
travel and arrived per day, Hence the project customers are comprise as follow:
Company and enterprise: - Many private company and institutions such as police and defines
forces, Rural, urban industry and transport services are all over the country large depend as energy
consumption
Individual Customers:- The demand for petroleum products for individual consumer level is a
function of increase in population size the demand of energy increased, though the individual
consumption level is considered in terms of rural household consumption.
Based on the information obtained from CSA abstract, there is more or less the same distribution of
consumption between rural and urban population, with an average consumption of petroleum
products per head per annum be com increased. In addition, the average per capita consumption of
petroleum products in Ethiopia which is at low level compared to most of African counties, is
expected to increase slowly to at least the fellow African levels in the next few years as induced by
economic growth.
Business Establishments:- The demand can also be viewed from private investment projects which
make use of the product.

6.1.4 GAS STATION SELLING PRICE

The fuel prices depend on the CIF value of fuel at Djibouti Fuel Price. For this envisaged project
sales price customized based on the current fuel and oil & lubricant local price per litter and has
grown by 5% growth rate considered in the five years project life. However the price revalued based
on the Ministry of Trade charged examines and revises. The other cafeteria, restaurant and car
service price depends on the local market. The project fuel selling price analysis is shown in the
following tale.
YEAR
Description
Y1 Y2 Y3 Y4 Y5
FUEL AND OIL & LUBRICANT(Birr/Lit)

Diesel 18.91 19.86 20.85 21.89 22.99

Gasoline 21.90 23.00 24.14 25.35 26.62
Kerosene 18.91 19.86 20.85 21.89 22.99
Oil and Lubricates in liters 137.50 144.38 151.59 159.17 167.13

35
 6.1.5 COMPETITION
In order to gain an impression of the current market situation in terms of competitors and rivalry for
Gas Station, we decided to collect information about Gas Station and Cafeterias around Cheha-
Indibir town and its proximity. Around the project area Gas Station and Cafeterias were no detected
in the area around the project area. We decided to focus on four establishments which are most
comparable with our conception of the Gas station. Hence, there is any threaten competition at all
and in depth analysis should not part for the project.

6.2 LODGE AND GUST HOUSE SERVICE MARKET ANALYSISS

6.2.1 PRESENT DEMAND AND SUPPLY
The SNNPR Region encompasses one the major tourist attraction centers of the country. The major
ones are Natural coffee forest is the curdle of world coffee biodiversity region. Inline these the
region is become a tourist attraction sites which is registered under UNESCO as world heritage
centers. A number of domestic and foreign tourists visit these sites every day. Another tourism
attraction centers in the region are the presence different peculiar park, ethnic cultural ceremony
and collective Tikil Dingay.
Gurage Zone Tiya Tikil Dingay and Bete Gurage Cultural ceremony are some of the most
centers of attraction for both domestic and local tourists which is visited almost every day
throughout the year.
Usually most tourists arrive at the Adey Ababa blooming period around September to October in
the morning when it is hot at the site. While watching the cascading of the Ethiopia Epiphany
period, they need drinks Gurage coffee ceremony they need international leisure place. But
unfortunately there are limited facilities to provide these services outside the central city of the
country. If there were hotels and restaurants, many tourists could have made overnight stay at
Gurage towns.
They would have preferred to watch the nature at sunset or sunrise. They could have wanted to hear
the sound of the wild animals and birds during the night. They could have experienced what it feels
during the night in Cheha administrative center of Indibir town. Gurage Zone where there are no
noises of urban life. In short, they could have preferred to stay near the nature watching. But there is
nothing there to make them stay. Because of no standard hotel, restaurant and not even an umbrella
in other places, in other countries, all sorts of tricks are made to make tourists stay longer and spend

36
more. They leave soon because there is nothing to make them stay longer even though they are
attracted by the natural beauty of the forest landscape.

6.2.2 PROJECTED DEMAND IN ETHIOPIA

Service sector especially hotel, lodge and resort industry is some of the potential sectors of the
country to generate foreign currency. Its contribution towards import tourism and GDP growth is
increasing. For example in 2007 tourism has arrivals growth rate19% and contributed revenue 47%
to the country's foreign currency and GDP growth, respectively. As indicated in table 6 bellow, the
number of tourists arriving in Ethiopia and receipts from international inbound tourism is increasing
from year to year.
Table 6: Tourists arrived in Ethiopia and corresponding Receipts
Year Arrivals GR% Revenue (in "000" Birr GR%
2002 428,000 252,000
2003 432,400 1% 577,800 129%
2004 510,154 18% 542,000 -6%
2005 603,335 18% 778,000 44%
2006 715,181 19% 676,000 -13%
2007 849,622 19% 991,200 47%
2008 1,011,448 19% 1,117,781 13%
2009 1,206,490 19% 2,567,894 130%

Total 5,756,630 113% 7,502,675 343%

Average 719,579 14% 937,834 43%
Source: Ministry of Culture and Tourism, tourism Statistics (2002-2009)

The number of tourists who had visited the national heritage during the last eight expects 2004
indicates that there is sufficient demand for the services of international standard Cultural Lodge and
Gust House like many other tourist sites in other country, the market for this Cultural Lodge and
Gust House could be seasonal, but it can be profitable by working during the “tourist season”. The
Cultural Lodge and Gust House do not have to be very sophisticated and expensively built. All they
need is to be extremely clean and comfortable with cultural heritage and with reasonable prices and
efficient services. The food must be simple but carefully and cleanly prepared and cooked. These are
what “ferenjis” want in 3rdworld countries.
Besides serving tourists, the Cultural Lodge and Gust House at Cheha central town cultural Lodge
and gust house project could be a good recreational center for wedding and also for occasional
37
ceremonies like cultural day, graduation day, short conferences and trainings of Indibir twon and its
surrounding towns. On the other hand, as GDP and per capita income of the population increase
local people will try to spend their leisure time with their families in such a lodge, just like "ferenjis”
do.
In this respect it is of paramount importance to establish neat, clean and medium modern and
traditional Cultural Lodge and Gust House at the Indibir Cultural Lodge and Gust House project
that could accommodate foreign and local tourists so as to enjoy the beauty of the Cultural Lodge
and Gust House landscape during the every year.

6.2.3 TARGET MARKET

Business Owners & Workers: Most of them work early in the morning, so the Cultural Lodge
Resort will open at 6:30. This group includes managers, factory employees, retail clerks,
professionals, tradesmen, laborers, and other food service workers. This group will form the base
clientele, as many will be repeat customers. A number of tradesmen have promised to patronize the
coffee shop & café every day. Fast, accurate service will be provided, as these customers often have
limited time to eat.
Local Residents & Workers: Small ads will be placed weekly in the Cultural Lodge café section of
the national tourism newspaper and local radio voice. Specials will be promoted with an A-frame
sign and, during slow periods, coupons and “2-for-1” deals will be offered. Menus will be distributed
to local businesses and faxing in orders will be encouraged. Take-out will be attractively boxed and
given equal priority to sit-down services.
Tourists: The Ethiopia tourism well become increased and will be the potential source of Cultural
Lodge and resort tourism industry. Menus will be distributed to the local lodging establishments to
encourage their guests to come to the Cultural Lodge and Gust House. Advertisements and listings
will be placed in statewide and regional tourist guides and publications. Menus will also be placed at
information booths and other spots likely to have tourist traffic

6.2.4 COMPETITION ANALYSIS

In order to gain an impression of the current market situation in terms of competitors and rivalry for
Cultural Lodge and Gust House service, we decided to collect information about Cultural Lodge and
Gust House service around Cheha-Indibir town and its proximity. Around the project area Cultural
Lodge and Gust Houses were no detected in the area around the project area. We decided to focus on

38
four establishments which are most comparable with our conception of the hotel. Hence, there is
any threaten competition at all and in depth analysis should not part for the project

6.2.5 PRICING AND DISTRIBUTION

Pricing of a Cultural Lodge and Gust House services could be classified into three main categories
i.e. food, beverage and bed rent. In this regard the daily average price by category of service is given
in table 7 bellow. Type of food to be prepared at this site is more of "ferenji" culture.
Table 7: Average price of service by category
Type of Service Unit Price in Birr
Food 200/ meal / person
Beverage 25 /bottle(excluding whisky)
Bed Rent local 200/night/ person
CLASIIC ROOM 700
FAMILLY ROOM 1200
SUITE 3200

6.2.6 PRICING STRATEGY

The Project primarily utilizes competition based pricing. The Cultural Lodge and Gust House does
not utilize coupons and discounts (other than opening promotion) because they believe that the most
valuable customer demographic of daily local & foreign consumers is not influenced by discount
programs or coupons..

6.2.7 PROMOTION AND ADVERTISING STRATEGY

 Online Advertising - The Cultural Lodge and Gust House Project will advertise regularly on
popular social media sites, such as Facebook. Compared to traditional print advertising, this
is a cost effective tactic that will allow them to reach prospects in a highly targeted way (e.g.
based on criteria such as age, gender, geography, etc.).
 Web Site - the Project will develop a simple Web site, which will provide basic information
about the business, the menu, and links to their presence on the aforementioned social media
channels.
 Radio Advertising - During the first six months of operation, and during the busy holiday
shopping season, the business will advertise on local radio stations

39
7. LAND USE, BUILDING AND CIVIL WORKS
7.1 LAND USE PLAN & BUILDING CIVIL WORKS & RELATED COST
For the proposed project, an area of about 20,000 sq. meter requirement is secured Of the total
land area, 20,000 m2 will be covered by different types of buildings and recreation center. The gas
station facilities mainly comprise GAS STATION (992M2) and CULTURAL LODGE AND GUST
HOUSE (288M2) and Other Building component (3875M2) service and the reaming land of 16133M2
is the parking area will be provided with facilities such as lights, and signs for easy entry and exit to
allow free flow of traffic.

7.1.1 GAS STATION BUILDING CIVIL WORKS & RELATED COST

The detailed buildings are includes Fuel Reservoir Tank (6M depth), Steel Structure Canopy, Tray
Service Building, Car Service Building, Carwash Building, Oil & Lubricant Shop Building, Office
Building, Other Building Back Side of Fuel Station, Café, Resting Room, Toilet Facility and Gardens
and Car Parking Area. In this regard the daily building facilities by category of service and related cost
of is given in table 8 bellow.
Table 8: Land Use Plan & Building Civil Work & Related Cost
Total Building Cost (birr) AREAS
Sr.
DESCRIPTION Executed TOTAL
NO. NO (M2)
Amount AMOUNT
A. FUIL STATION
1 CANOPY 1 821,500.00 821,500.00 289
2 TANKER 4 420,000.00 1,680,000.00 192
Provide by YTB-Oil Company(cost Reference in Mach &
3 ACSOSSARIS
Eq.part)
SUB TOTAL=A 2,501,500.00
BUILDING PARTS
1 BAR AND RESTORANT 1 906,893.76 906,893.76 160
2 OFFICE 1 298,096.03 298,096.03 25
OIL AND LUBRICANT
3 SHOPE
1 152,619.46 152,619.46 25
4 STORE 1 146,045.60 146,045.60 16
5 REST ROOM 1 146,045.60 146,045.60 20
6 CAR WASHING 1 105,000.00 105,000.00 96
7 PARKING 1 45,000.00 45,000.00 120
TOILET WITH SEPTIC
8 TANK
1 428,442.11 428,442.11 25
9 KITCHEN 1 180,281.12 180,281.12 24
Sub-total of Building Area 992
10 FENCE WORK 1 272,340.00 272,340.00 153m

40
 SUB TOTAL COST=B 2,680,763.68 992
11 Open area reserved for the Expansion
GRAND TOTAL COST= A+B 5,182,263.68
GRAND TOTAL 5,182,263.68

Based on the above building the estimated engineering bill of quantities the total cost of building is
Birr 5,182,263.68. The details breakdown and others details on floor area shown at the supporting
plan and bill of quantities in the annexure. The details of the area required for different activities are
given at table-8 above.

7.1.2 GAS STATION BUILDING AND CIVIL WORKS STANDARDS

The building will have walls made of hollow–block linings and properly cement plastered. The Fuel
Station hangars will have walls covered by corrugated iron sheets on columns and beams made of
metallic bars. The roofs will be of saw –tooth type with metallic trusses and covered with metal
cladding. Other buildings will be built by hollow-block walls properly finished, but mot cement
plastered.
The building materials will consist of natural stones, sand, and cement. Also steel pipes, roofing
tiles, wall tiles, PVC pipes, steel rods and glass will be used. Other materials that will be used on site
include timber. The building will be constructed as per the respective structural engineer’s detail as
provided for in the site plan. Basically, the building structure will consist of concrete appropriately
reinforced with metal (steel and iron). The building will be provided with facilities for drainage of
storm water from the roof and canopy through peripheral drainage systems into the storm water
drainage system. Drainage pipes will be of the PVC type and will be laid under the building and the
driveway encased in concrete. The development will be connected to a septic tank to be put up
during project implementation. The development will have adequate natural ventilation through
provision of permanent vents in all habitable rooms, adequate natural and artificial light, piped water
stored in tanks and above ground water tanks provided with water pumps to feed overhead tanks and
firefighting facilities.

The technology used in the design and the construction of the fuel station will be based on national
and international standards which have been customized in Ethiopia. These include building
standards of NATIONAL BUILDING REGULATIONS AND BUILDING STANDARDS ACT NO.
103 OF 1977.

41
 Antiterrorism Construction Standards– the new facility would incorporate Unified Facilities
Criteria building as per EUREGAP/ISO14001 regulations and industrial building standards:
 Architectural Design Standards–the new facility would reflect modern design
standardization with an emphasis on sustainability and would conform to criteria in and
technical guidance of Fuel station Facility Planning and Design Guide; Fire Protection
Engineering for Facilities. Objectives include low environmental impact, optimal and efficient
use and reuse of materials and resources using the Leadership in Energy and Environmental
Design (LEED) Green Building Rating System.
 UTILITIES: The fuel station will have a comprehensive and robust infrastructure including,
parking area, water storage, electricity distribution and waste disposal.
 Electricity: The site will be connected to the electricity main line of the Kenya power and
lighting company, which will be in all phases of the project. The necessary guidelines and
precautionary measures relating to the use of electricity shall be adhered to.
 Water: Water from the Ethiopia Authority will be used during construction and operational
phases of the fuel station. More so there will be water storage tanks to increase water capacity
at the project site to the required amount. There are also local rivers which will provide water
as an alternative source.
 Solid Waste/ sewerage: Solid waste collection center for the entire station will be located
strategically and covered on top and on the sides to protect against weather and scavengers as
per the Ministry of Health Standards. The waste will then be collected by NEMA licensed
private waste collectors for disposal at the approved dumping sites. Waste bins will be
provided for each section for temporarily holding of waste before delivery into the central solid
waste collection area. The proponent shall apply for an effluent discharge license from NEMA
tandem to the Water Quality Regulation, 197/2000. This report recommends the construction
of a three pit oil water interceptor tank, where all runoff water will be directed to before being
discharged into the main drainage system.
 Security: A guard shall be located next to the main entrance for easy security operations
around the compound during construction and there will be guards at all times during the
operation phase of the Project.
 Car Parking: The parking area will be provided with facilities such as lights, and signs for
easy entry and exit to allow free flow of traffic. The parking bay will be inclined to a degree
42
 that does not allow stagnation of water and thus linked to storm water drainage system.
Parking area floor will be made of capro slabs.
 Pavement Works: The filing station will have capro floor covering all open sections apart
from the office and sanitary facilities.

7.2 CULTURAL LODGE & GUST HOUSE BUILDING CIVIL WORK COST

Based on below table description building type and the estimated engineering bill of quantities the
total cost of building is Birr 8,318,000. The details breakdown and others details on floor area
shown at the supporting plan and bill of quantities in the annexure. The details of the area required
for different activities are given below at table-9.
Table 9: Cultural lodge& Gust house Building Civil Work & Related Cost
UNIT
Description Units Qt. TOTAL COST (BIRR)
COST
1. LODGE BUILDING
Lodge M2 480 4,000.00 1,920,000.00
Cultural center M2 1,500.00 3,000.00 4,500,000.00
1980 6,420,000.00
2. OTHER BUILDINGS
Service with laundry, Storage, and maintenance facility M2 295 3,800.00 1,121,000.00
WATER SUPPLY / TREATMENT/ DISPOSAL m2 400 1,500.00 600,000.00
Sub total 695 600,000.00
3. Land scope design and garden
Bore hole & Wastes Water Systems Pcs 1 350,000 350,000.00
Land scope Green Area Ls 1 150,000 150,000.00
Sub total 500,000
3. OTHERS-CIVIL WORKS
Perimeter fencing Ml 440 1200 528,000
Parking Lot and Access M2 200 1200 240,000
Main gate and access No 2 15000 30,000
Sub total 200 798,000
Total (1-4) 2875 8,318,000
Grand total 8,318,000

7.2.1 BUILDING HEATING, VENTILATION AND CONDITIONING SYSTEM

The heating and conditioning facilities of the building are provided with the help of central plant air
conditioning system, with water circuit based on the two built-in dual-purpose lithium bromide
absorption machines, operating by the heat pump cycle using the thermal value of natural gas. It is
planned to use urban network as a backup heat supply source.

43
The heating and conditioning system in the Cultural lodge& Gust house would be installed with the
help of fan coils connected according to the scheme of the dual-purpose lithium bromide absorption
machine. Such scheme allows to operate the system both centrally (by temperature changing of the
dual-purpose lithium bromide absorption machine circuit), and locally (by changing the productivity
of fan coils).
Warm air heating equipment will be used for the heating system:

The modern air heating system, ventilation system and conditioning system in the Cultural lodge&
Gust house center are the jointly operated systems. All these systems are called the environmental
control system which is able to set not only the temperature parameters, but also the parameters of
humidity, air purity and air changes. The heating is achieved by air warming in the air intake system
up to the defined working temperature (18° – 24°), and also by temperature variation up to the set
level, for this purpose it is necessary to install fan coil units; these fan coil units operate in the air
heating mode by means of cooling circuit (water) at the local Individual Heating Plant (IHP) or
central heating system (standby).
It is necessary to equip the used air system with the fan coils both with cold (conditioning) and hot
(heating) water line, operating in summer and winter time. After being heated or cooled in the air
inlet units, the air is delivered through air ducts.
Landscaping: The un-built area will be landscaped after construction, using plant species available
locally. This will include establishment of flower pots to improve the visual quality of the site.

The ventilation in the shopping center consists of the following systems:

Storey inlet ventilation – suspended ventilation unit: its efficiency is about 10ths.m3/h; the
ventilation units are mounted in ceiling space, providing inlet air preparation (purification,
cooling/heating, delivery to the consumers).
Storey general exhausts ventilation consisting of exhaust ventilation units. General exhaust
ventilation is characterized by its high degree of automation: quick response of the air quality
sensors. The automation system of the general combined exhaust and inlet ventilation makes it
possible to adjust the air balance between large spaces depending on the number of visitors.
Local exhaust ventilation units: Built in cooking spaces (restaurant and café’s kitchen, kitchen in
the food-court area and food preparatory workshop), in the engineering building rooms (individual

44
heating plant, transformer substation), in amenities (bathroom units, shower cubicles, smoking
areas).
The integrated system of central conditioning and ventilation consists of: story central inlet
ventilation units (air-intake unit), chilling machine, local fan coils, heat/cold supply air duct and
circuit.
There are no “dead-leg areas” in the ventilating and conditioning system, the system provides the
necessary air change coefficient and temperature maintenance both on shopping and total area.

7.2.2 WATER SUPPLY AND SEWAGE SYSTEM

The two input of the city cold water conduit, located at Indibir town, are used as water supply. The
water supply system is designed as the down distribution, with floor-by-floor offsets. Main and
sectional conduits (hot and cold water), sewage pipelines (sanitary and storm water drain) are made
of polypropylene pipes. The design project provides a separate public water supply system and fire-
fighting water conduit.
For the necessary water height in inner fire line we use pressure-holding pumps installed in the
pumping plant. The inner fire pipelines are made of steel gas-water pipes.
For collecting and pumping of sewage effluent formed at the first basement floor (bathroom units,
shower cubicle, food preparatory workshops, and washing plants in the supermarket) we arrange
pumping plants at the second basement floor. Every pumping plant is equipped with two pumps
(operating and standby).
Storm water is collected from the roof (3, 4 floors) via intake head equipped with heating coils for
frosting prevention. Storm water drain is installed indoor. Storm water collection from the roads is
made through the surface water conduit with storm water inlets equipped with storm water gratings.

7.2.3 POWER SUPPLY SYSTME

Power is received from the main and standby power supply: bus section I and II 6 kV ПС 110/6 kV
of «К» and Cheha substations. The connection of power receivers to the building of the shopping
center according to the power receive scheme meet the requirements of customer contract demand
(3800kW), as well as the safety requirements to the 1 class of power receivers according to its
energy saving.
The substation of the shopping center is designed as a double-transformer substation 2×2500kVA
with two backup bus sections 0,4kW, without automatic transfer circuit breaker. The loading of 1st
category is to be connected through the fast-acting automatic transfer circuit breaker.
45
The main load of electrical consumers is proportionally connected to the both bus sections РУ-
0,4kV. The maximum available load of the transformer substation is defined by the power of
transformers and its non-reserved power makes 5000kVA.
The transformer substation parameters are selected according to the prospective development of
adjacent territory, with the connection possibility due to the voltage level of 0,4kV.
For the compensation of reactive energy and fulfillment of quality conditions, we install controlled
capacitor banks on the low-voltage side, with voltage of 500kVA for each bus section with 0,4kV.
The installation of static compensators on the side of 0,4kV allows to decrease costs and to unload
the power transformers from inductive component of the consumed energy.

7.2.4 ELECTRICAL EQUIPMENT AND LIGHTING

For indoor power supply we designed switch boards on each floor, the switch boards installed in
separate rooms are available for maintenance personnel only (2 switch boards per storey with zoning
of the north and south side of the building).
The switch boards are allocated overlapped and carry the load from main bus bar wired from
transformer substation РУ-0, 4 ТП of the Cultural lodge& Gust house center.
For the customers’ security there is a separate section specially designed for the customers of the
first security factor, the section is connected through the automatic circuit breaker from the inlets of
the transformer substation РУ-0,4kV. The switch boards are connected according to the main power
supply diagram.
For working lighting in common areas it is necessary to use energy-saving luminous tube lamps.
Within the space of bowling, billiards, café and restaurant we use combined lighting with
incandescent lamps.

7.2.5 INSTALLATION OF TELEPHONES

The external telecommunications networks are manufactured and laid at the expense of Network
proved Close Corporation according to the technical conditions provided by ETC. The installation of
telecommunication networks provides quick net connection, connection to the urban telephone
network and access to the internet.

7.2.6 PRINCIPLES AND STANDARDS OF FINISHING

The principles of finishing presuppose various approaches; each approach is used due to the
agreement between the tenant and the lessor.

46
Space finishing at the expense of tenant: This approach means the lease of gross leasable areas
with no “fine” finish, final finishing is executed at the expense of the tenant and according to his
project. The areas are leased according to the following standard of shell and core fit-out:
Cafeteria, Bar and Restaurant area: thermal contour, open plan of the Cultural lodge area, flat
waterproof floor with the heating system, naked walls, operating ceiling;
Utility Rooms/ Gust house: flat waterproof floor with the heating system, naked walls, operating
ceiling;
System Assembly (in the & Gust house area and in the utility rooms): ventilation system,
conditioning system for the hall area (main routes without end-use devices), heating system,
sewerage and water supply system, fire-fighting system, security and fire alarm;
Electricity: terminal only (without interconnection wiring).
This approach provides less fine finish expenses for the lessor, but includes the expenses incurred by
the tenant, dealing with the lease rent - less expense than when leasing with the fine finish.
Finishing anchor area is at the expense of the tenant, fine thread and total areas at the expense of the
lessor. In this case anchor areas are leased according to “shell & core” standard and “fine” finish is
executed by their independent projects subject to their technologies. For this period there is a
“leasing vacation”.
In the project calculation we accept the term that the anchor areas are transferred according to the
standard “shell & core”, subject to its technology concept by the approved decision of the lessor, and
the final finish is executed at the expense of the tenant.
The rest areas are finished according to the common interior design developed for the shopping
center. In the case when franchise raises special demands to the design they pay for the finishing
works at their expenses. The signing contracts with the anchor tenants at an early stage of designing
allowed make the project oriented to the technologies of concrete tenants.

7.3 PROJECT IMPLEMENTATION SCHEDULE

During the implementation period, the different activities likely to be undertaken have been
classified as follows on the basis of activities category and schedule in one year period as shown in
the activity chart shown at table below table-10.

47
Table 10: Project Implementation Schedule
Months
Description 7 8 9 10 11 12
Building and Site Work Construction
Purchase Machineries and Equipment
Installation of machinery
Machinery, equipment testing and training
Manpower recruitment
Training to Technical Staffs
Purchasing and supplying all inputs
Fuel Sealing start

48
8. MANPOWER REQUIREMENT AND TRAINING REQUIREMENT
8.1 HUMAN RESOURECE
For the Gas station and Cultural lodge& Gust house service operating labor, supervisory and
managerial production staff requirements are given in the finical assumptions sections below
the shift labor and supervisory requirement is based on 365 days of the year. For the detail
information of gas station and Cultural lodge & Gust house separately can be seen in the annex.
Table 11: The Required human Resource and Qualification
Summary of Gas Station and Cultural Lodge and Gust House Salary and waged Cost
Description No of Annual
Persons Salary(Birr)
Lodge and Gust House Service
L &G Salary of Administrative and Managerial line 55 843,600
L&G Salary of Production Line 47 677,004
Sub-Total 102 1,520,604
Gas Station Service
Gas Station Salary and Wage 10 156,000
Gas Station & Cafeteria Salary and Wage 11 152,400
Sub-Total 21 308,400
Grand Total 123 1,829,004

8.2 ORGANIZATION AND MANAGEMENT

The typical organizational structure of a Gas station and Cultural lodge & Gust house is composed of
the General Manager at the top with other mangers for this project, Administration, finance and
marketing. There are also sections for the different categories of Gas station and Cultural lodge &
Gust house service management. One of the key factors for success of a project is good
organizational set-up and management structure. The organizational set up of the project at hand
should be designed to have a functional structure which establishes effective management system
and enhances upward, downward, horizontal and lateral communications and tasks in the line of
order. The typical organizational structure for this Gas Station and Cultural lodge & Gust house
Organizational Structure is shown below figure-4.

49
 Figure 4: Typical Organizational Structure of a Fuel Station

8.3 TRAINING REQUIREMENT

Training of key personnel shall be conducted in collaboration with the suppliers of the gas station
Gas station and Cultural lodge & Gust house machineries and service providing. The training should
primarily focus on the service providing and machinery maintenance and trouble shooting. Birr
40,000 will be allocated for training expense.

50
9. FINANCIAL STUDY
9.1 INTRODUCTION
The financial analysis is based on the market demand analysis and the product development concepts.
The analysis took a conservative or at best a middle-road approach to forecasting occupancies, costumers
statistics, revenues and expenses. The analysis assumed that there was private sector participation in the
venture. Private sector support notwithstanding, the analysis assumed that the company would take some
years to discover and gain market share. However if a management company with an existing pipeline of
clients was to invest in the venture, then it is likely that results in the early years will be much more
positive. It should be noted that this analysis can only be indicative at this stage, as the envisaged private
sector management company should be given some flexibility in configuring the business venture,
specifically being able to decide on elements such as visitor facilities, pricing, exclusivity and service
quality

9.2 PROJECT FINANCIAL REQUIREMNT PLANNING COST

The forecast capital expenditure associated with the project is summarized below. A detailed breakdown
of this expenditure is found in the annexure. This excludes road maintenance outside of the Gas station
and Cultural lodge & Gust house as this is deemed a government responsibility. It should be noted that
the business plan recommends that some of the facilities be only established in a second phase of
implementation.
The project owner is seeking to raise start-up capital from bank as a bank loan and equity. The interest
rate and loan agreement are to be further discussed during negotiation. Based on our estimates, the total
capital cost to project is Birr 28,232,492. This project financial plan assumes that the business will
receive a 10 year loan with a 10.5 % fixed interest rate. From the total investment cost of the project
including its working capital is estimated at Birr 3.437 million as shown in table -12 below. The major
fixed asset of the project the cost estimated for procurement at 24.090 million birr and Pre-production
costs 704,609 birr are described in the table -12.
Table 12: Total Investment Cost (Et Birr)
SOURCE OF FINANCE
DESCRIPTION EQUITY BANK BANK
LOAN LOAN
Lodge & Gas Station Land acquisitions and development cost 26,328 61432 87,760
Lodge and Gas station Installation Cost 251,550 586950 838,500
Lodge Building and civil works 2,495,400 5822600 8,318,000
51
 Lodge Furniture & Fixture 850,747 1985076.8 2,835,824
Lodge Machinery & equipment. 1,135,954 2650559.8 3,786,514
Gas Station Building Cost 1,554,679 3627584.8 5,182,264
Gas Station Machinery and Equipment 810,000 1890000 2,700,000
Gas station Furniture & Fixture 102,600 239400 342,000
Sub-Total 7,227,259 16,863,603 24,090,862
Pre-production costs 211,383 493,226 704,609
Total Initial Investment Cost 7,438,642 17,356,830 24,795,471
Working Capital 1,031,106 2,405,915 3,437,021
Total Investment Cost 8,469,747.60 19,762,744.40 28,232,492
Percentage Share 30% 70% 100%

9.3 SOURCE OF FINANCING

The investor has intended in undertake the proposed project with 30% equity financing. The remaining
70% will be financed through bank loan. Details source financing estimate of the project is given above
table -12.

9.4 IMPLEMENTATION
The investor has already commenced the design and study activates of the project and expects to
conclude sooner. Following the investment the acquisition of land the project, necessary technical skills
and founding will be mobilized to finalize the project phase within 6 months.

9.5 GENERAL FINANCIAL PLANNING ASSUMPTION

Project Life (years) 10
Debt Ratio 70%
Equity Ratio 30%
And or lease financing 30% deposit
9.5.1 ECONOMIC ASSUMPTIONS
Operating Expenses for the project and there basis are taken as follows
Description Basis Basis
CONSTRUCTION AND FINANCE
Construction period 1 years 1year
Bank interest 10% 10.5%
Discounted cash flow 10% 10%
Source of finance 30% equity and 70% loan
ECONOMIC ASSUMPTIONS
Utilities price growth 5%
Material price growth rate 5%
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 Wage Growth Rate 5%
Tax rate 35%
EXPENSE
Salaries Expenses As per salary estimations
Staff Benefits 10% of Payroll
Insurance 2% of Revenue
Administrations expense 5% of Sales
Production processing 99% of sales
Casual Labour rate 55 Birr with 5% growth Rate
Utilities price growth
Water and electric city price growth rate % 5%
Loan period 10 years
9.5.2 CASH FLOW ASSUMPTIONS
Inventory (% of COGS) 8%
Minimum cash balance (% of sales) 2%
Accounts receivable (% of sales) 5%
Accounts payable (% of COGS) 3%
9.5.3 WORKING CAPITAL ESTIMATIONS
Auxiliary Raw Materials Local 1 Month
Stock of Finished Goods 10 Days
Goods in Process 1 Days
Administrative and Marketing Expenses 2 Months
9.5.4 PRODUCTION ASSUMPTIONS
Production and Machine Capacity
Project processing Capacity(kg/hr) 2000
Utilization Capacity(year 3) 100%
Business operation hour per day 8
available working day per year 365
Current efficacy starting year (%) 80%
9.5.5 REVENUE, EXPENSES AND NET PROFIT
Revenue, expenses, and net profit figures are summarized below (detailed breakdown in the
annexure). The financial assumptions underpinning the analysis are also listed in the annexure, but
can be summarized below:
The business is structured according to 4 main profit centers, namely the gas station Cultural
lodge bar & restaurant estate and accommodation & camping, Landscape green garden and
the gam center.

53
 Certain variable and direct fixed costs have been attributed to the relevant profit centers or
departments.
Fixes operational costs and administrative costs have been estimated based on unit project
business averages. Some are estimated as a percentage of turnovers.
All income and expense projections calculation at today’s rates.
The maximum annual capacity of the resort is estimated at 18,000 visitors per annum. This
was calculated as 50 visitors per day on weekends and holidays base.
On this basis day visitor occupancy was estimated to start at 15% in year 1 and increase to
40% by year 7.
Performance of 130 beds in 3 class was analyzed years 3 to 10.
Based on these bed numbers occupancy was estimated to start at 80% in year 1, year 2 90%
and increase to 100% by year 4 to 10.
Bar and restaurant retail and bed room sales was calculated at local Food 200/ meal / person,
Beverage 25 /bottle(excluding whisky), Bed Rent local 200/night/ person and bead rooms
CLASIIC ROOM 700, FAMILLY ROOM 1200 and SUITE 3200 for all overnight visitors.
Boat launch fees and fishing fees were not factored in as these transactions were understood
to be for the account of the business.

9.6 BUSINESS COST ESTIMATE ASSUMPTION

9.6.1 GAS STATION FURNITURE AND FIXTURE REQUIREMENTS
FURNITURE AND FIXTURE REQUIREMNTS Unit Total
Units Quantity Cost Et.birr Cost Et.birr
Restaurant furniture Set 1 155,000 155,000
Cafe Furniture Set 1 135,000 135,000
Office Furniture Set 1 40,000 40,000
Others Ls 1 12,000 12,000
Grand total 342,000
9.6.2 LODGE&GUST HOUSE FURNITURE AND FIXTURE REQUIREMENTS
Description UOM Quantity rate Cost
Bed Room Furniture Single Set 55 500.00 27,500
Bed Room Furniture Classic Set 45 700.00 31,500
Bed Room Furniture Family Set 25 789.00 19,725
Bed Room Furniture Suite Set 5 2,110.00 10,550
Restaurant furniture’s Set 1 3,000.00 3,000
Bar Furniture Set 1 2,500.00 2,500
Swimming Pool Furniture Set 1 2,110.00 2,110
54
 Total In USD 96,885
Total Cost in Ethiopia Birr 2,835,823.95
9.6.3 GAS STATION & LODGE AND GUST HOUSE PRODUCTION COST
The total production cost is estimated very large even annual production activities because of high
amount of fuel sales are operated. Operating costs will be recorded in a year basis.
Items Y0 Y1 Y2 Y3-y10
utilization capacity 80% 90% 100%
Gas Station
Diesel 45,220,800 36,176,640.00 40,698,720.00 45,220,800.00
Gasoline 104,793,600 83,834,880.00 94,314,240.00 104,793,600.00
Kerosene 45,220,800 36,176,640.00 40,698,720.00 45,220,800.00
Oil and Lubricates 96,116 76,892.40 86,503.95 96,115.50
Car Wash Services 25,200 20,160.00 22,680.00 25,200.00
Salaries & Social charges- 156,000 124,800.00 140,400.00 156,000.00
Sub-total cost 195,512,516 156,410,012 175,961,264 195,512,516
Gas Station Cafeteria
Housekeeping supplies 145,930 116,744.00 131,337.00 145,930.00
Food cost 1,983,640 1,586,912.00 1,785,276.00 1,983,640.00
Snacks & beverage Cost 1,764,990 1,411,992.00 1,588,491.00 1,764,990.00
Salaries & Social charges 152,400 121,920.00 137,160.00 152,400.00
Sub total 4,046,960 3,237,568 3,642,264 4,046,960
Cultural Lodge Expense
Food cost of goods sold 14,235,000 11,388,000 12,811,500 14,235,000
Beverage 1,154,313 923,450.40 1,038,881.70 1,154,313
Salary of Hotel Service & Production 677,004 541,603.20 609,303.60 677,004
Sub-total 16,066,317 12,853,054 14,459,685 16,066,317
G/Total 215,625,792.50 172,500,634.00 194,063,213.25 215,625,792.50

9.6.4 GAS STATION & LODGE AND GUST HOUSE OPERATION COST

The total operating cost is estimated very large even annual operation activities because of high
amount of fuel sales are operated. Operating costs will be recorded in a year basis. The operation
cost is described here & the amount and interest rate and loan agreement are need to be further
discussed during negotiation it is divided into overheads (fixed costs) and variable costs.

55
 Items Y0 Y1 Y2 Y3-y10
utilization capacity Period (moths) 80% 90% 100%
Miscellaneous Expense 12 21,154,054 16,923,243.20 19,038,648.60 21,154,054
Tel Communications 12 68,894 55,115.20 62,004.60 68,894
Laundry Service. 12 4,409 3,527.20 3,968.10 4,409
Housekeeping supplies 12 490,399 392,319 441,359.10 490,399
Commission 12 275,576 220,460.80 248,018.40 275,576
Utilities: Electricity, Water, Tele 12 1,284,471 1,027,576.80 1,156,023.90 1,284,471
Salary Of Managerial & Administrative 12 843,600 674,880.00 759,240.00 843,600
Maintenance & Sapir Part 12 685,165 548,132.27 616,648.81 685,165
Overhead Cost 12 1,565,817 1,252,653.6 1,409,235.30 1,565,817
Transport cost 12 534,500 427,600.0 481,050.00 534,500
Sub-total Factory costs 26,906,885 19,297,122 21,709,263 24,121,403

9.6.5 REVENUE ESTIMATION

GOODS SOLD ITEM UNIT PROJECT YEARS
Gas Station Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
Diesel Lit 45,384,000 47,653,200 50,035,860 52,537,653 55,164,536 55,164,536 55,164,536 55,164,536 55,164,536 55,164,536
Gasoline Lit 105,120,000 110,376,000 115,894,800 121,689,540 127,774,017 127,774,017 127,774,017 127,774,017 127,774,017 127,774,017
Kerosene Lit 45,384,000 47,653,200 50,035,860 52,537,653 52,537,653 52,537,653 52,537,653 52,537,653 52,537,653 52,537,653
Oil and Lubricates in liters Lit 13,200,000 13,860,000 14,553,000 14,553,000 14,553,000 14,553,000 14,553,000 14,553,000 14,553,000 14,553,000
Sub-total LIT 209,088,000 219,542,400 230,519,520 241,317,846 250,029,206 250,029,206 250,029,206 250,029,206 250,029,206 250,029,206
Gas Station Service Revnue
Car Wash Services birr 252,000 310,800 369,600 388,800 408,000 408,000 408,000 408,000 408,000 408,000
Cafeteria and Reasturant birr 1,971,000 2,109,791 2,299,787 2,518,297 2,015,957 2,089,161 2,166,025 2,246,732 2,331,475 2,420,455
Sub-total birr 2,223,000 2,420,591 2,669,387 2,907,097 2,423,957 2,497,161 2,574,025 2,654,732 2,739,475 2,828,455
Total Gas Station Revenue birr 211,311,000 221,962,991 233,188,907 244,224,943 252,453,163 252,526,367 ########## ########## 252,768,681 252,857,660
Summary ofLoadge Revenue
Revenue of Bed Rooms Rent birr 11,814,513 19,846,307 23,442,962 24,615,069 25,845,781 27,138,028 28,494,888 29,919,591 31,415,529 32,986,264
Food Revenues birr 7,227,000 11,382,525 17,927,477 28,235,776 44,471,347 70,042,372 110,316,736 173,748,859 273,654,453 431,005,764
Beverage birr 7,537,250 11,871,169 18,697,091 29,447,918 46,380,471 73,049,242 115,052,555 181,207,775 285,402,245 449,508,536
Other Operation Departments Revenues birr 1,476,000 1,659,218 1,866,593 2,101,517 2,367,888 2,670,189 3,013,581 3,404,015 3,848,352 4,354,516
Sub-Total birr 28,054,763 44,759,218 61,934,123 84,400,280 119,065,487 172,899,831 256,877,761 388,280,240 594,320,579 917,855,080

Total birr 239,365,763 266,722,209 295,123,030 328,625,223 371,518,650 425,426,197 509,480,992 640,964,178 847,089,260 1,170,712,740

56
10. FINANCIAL PROJECTIONS
10.1 PROJECTED INCOME STATEMENT
It may be seen from the profitability estimates that the unit would earn a net profit after taxation of
birr 14.379 million during the first years of operation at 80% of the capacity. The net profit after tax
will increase gradually from to ET. Birr 15.750 million in the second year 90% of the capacity and
birr 17.759 million in the third year when the unit expects to achieve 100% utilization of capacity.
On the above basis, there is adequate generation of funds out of the Gas Station and Cultural Lodge
and gust House business operation to service the repayment of term loan and interest liabilities, as
also to meet additional requirement of margin money for working capital in the second and
subsequent years. Further, adequate surplus cash is available with the unit for promoter withdrawal.
For The detailed information we can see in the Annex-4

10.2 PROJECTED BALANCE SHEET

Balance sheet on hand at a given period in time (i.e., projection) is critical component of a business
initiative. The Balance sheet is positive starting Year one. The cash end balance clearly shows that
the accumulated or the asset fund is sufficient to finance the expansion activities, strengthen the fuel
station and invest on the establishment of other services. For The detailed information we can see in
the Annex-5.

10.3 PROJECTED CASH FLOW STATEMENT

Cash flow on hand at a given period in time (i.e., projection) is critical component of a business
initiative. The cash flow is positive starting Year tow. The cash end balance clearly shows that the
accumulated or free cash fund is sufficient to finance the expansion activities, strengthen the Gas
Station and Cultural Lodge and gust House production and invest on the establishment of other
services. For The detailed information we can see in the Annex-6.

57
 11. FINANCIAL EVALUATION
11.1. PROFITABILITY
According to the projected income statement attached in the annex part (see annex 4) the project will
generate profit beginning from the first year of operation. Ratios such as the percentage of net profit
to total sales, return on equity and return on total investment are 6%, 170% and 51% respectively in
the first year and are gradually rising. Furthermore, the income statement and other profitability
indicators show that the project is viable.

11.2. BREAKEVEN ANALYSIS

The breakeven point of the project is estimated by using income statement projection. Accordingly,
the project will break even at 80% of capacity utilization. Then the breakeven ratio, the ratio of
breakeven sales to planned Gas Station and Cultural Lodge and gust House service, for the entire
period is between 0.10 and 0.79 The breakeven ratio of the project is not only low but it also steadily
declines throughout the operation period. This low break even ratio means low risk to the
investment; the business has great level of security against unforeseen operational difficulties

11.3. PAYBACK PERIOD

The computation of the payback period is given at graph Annex-8. The pay- back period would be
much less in case calculated on the basis of profit before tax. Therefore, the investment cost and
income statement projection are used to project the pay-back period works out to 2 years on the basis
of profit after tax. The project’s initial investment will be fully recovered within 2 years. For The
detailed information we can see in the Annex-8.

11.4. SIMPLE RATE OF RETURN

For this envisaged project of Gas Station and Cultural Lodge and gust House service the simple rate
of return equals to 70%, which means the project is viable the investor to invest.

11.5 INTERNAL RATE OF RETURN AND NET PRESENT VALUE

Based on the cash flow statement on the Annex-7, the calculated IRR of the project is 123% before
tax and 95% after tax and the net present value at 10 % discount rate is Birr 1.102 million and Birr
707.659 million before and after tax respectively The internal rate of return is calculated as the rate
of discount which equates the present worth of the costs and benefits streams.

58
 11.6 LOAN REPAYMENT SCHEDULE
The loan repayment period is simply defined as the period (i.e. the number of years) required paying
the principal and interest of the original investment cost throughout the project life. The outcome of
the financial analysis reveals that: based on the following repayment schedule the annual payment
was described below in table-8 throughout the project life.
Table 13: Loan Repayment Schedule (Et. birr)
Total Investment 28,232,491
Long Term Interest Rate 10.50%
Percent Financed 70%
Loan Amount 19,762,744
Loan Term 10
Year 1 2 3 4 5 6 7 8 9 10
Beginning Balance 19,762,744 18,552,131 17,214,404 15,736,216 14,102,817 12,297,912 10,303,492 8,099,658 5,664,421 2,973,485
Interest Rate 10.5% 10.5% 10.5% 10.5% 10.5% 10.5% 10.5% 10.5% 10.5% 10.5%
Interest 2,075,088 1,947,974 1,807,512 1,652,303 1,480,796 1,291,281 1,081,867 850,464 594,764 312,216
Annual Payment 3,285,701 3,285,701 3,285,701 3,285,701 3,285,701 3,285,701 3,285,701 3,285,701 3,285,701 3,285,701
Principal 1,210,613 1,337,727 1,478,188 1,633,398 1,804,905 1,994,420 2,203,834 2,435,237 2,690,937 2,973,485
Ending Balance 18,552,131 17,214,404 15,736,216 14,102,817 12,297,912 10,303,492 8,099,658 5,664,421 2,973,485 0
Total Annual Re-Payment 5,360,789 5,233,675 5,093,213 4,938,003 4,766,497 4,576,982 4,367,568 4,136,165 3,880,465 3,597,917

11.7. SENSITIVITY ANALYSIS

The Gas Station’s and Cultural Lodge and Gust House’s revenues are moderately sensitive to
changes in the general economy. The price of oil and its associated refined energy products and
Cultural Lodge and Gust House has hit all-time highs, and as such, drivers have no reduced their
driving to offset in all case. The envisaged plant is profitable even with considerable cost increment.
That is, the Gas Station and Cultural Lodge and Gust House maintain to be profitable starting from
the second year when 10 % cost increment takes place in the sector. This result is accompanied by
strong positive IRR and unchanged payback period.
For the sensitivity analysis three worst cases has been considered as follows,
Case 1:if the company sales prices decrease by 10%
Case 2:if the annual operating cost increase by 10 %
Case 3:if the production/revenue generating Quantity decreases by 10%
Project Case-1 Case-2 Case-3
NPV ( Birr’000) after tax 707,659 344,456 724,054 596,639
IRR (after Tax) 95% 126% 135% 139%
Pay Back Period 2Yers 1Yaers 1Yaers 1Year

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12. ECONOMIC AND SOCIAL BENEFITS AND JUSTIFICATION
The envisaged project possesses wide range of benefits that help promote the socioeconomic goals
and objectives stated in the strategic plan of the Southern Nation, Nationality, and National Regional
State. It also boosts inter sectorial linkage between the transport and industrial sectors and the tourist
and hotel and tourism industry. At the same time, therefore, it helps diversify the economic activity
of the region. The other major benefits are listed as follows:

12.1. PROFIT GENERATION

The project is found to be financially viable and earns on average a profit of Birr 132.677 million per
for ten years and Birr 14.379 million in the first and second year and will increased within the
project life. Such result induces the project promoters to reinvest the profit which, therefore,
increases the investment magnitude in the region.

12.2. TAX REVENUE

In the project life under consideration, the regional income about average Birr 9.562 million from
corporate tax payment alone at 100% production capacity at third years (i.e. excluding income tax,
sales tax and VAT) increased through the project life. Such result creates additional fund for the
regional government that will be used in expanding social and other basic services in the region.

12.3. EMPLOYMENT AND INCOME GENERATION

The proposed project is expected to create employment opportunity to several citizens of the region.
That is, it will provide at the operation period 50 temporary and permanent employments to 123
professionals as well as support staff. Consequently the project creates income of Birr 1.829 million
per year. This would be one of the commendable accomplishments of the project.

12.4 PRO ENVIRONMENT PROJECT

Due to Gas Station and Cultural Lodge and Gust House service the waste management plan was
initially will established with project, the economic risks are generally estimated as low. Cost of
capital is rather high and economic growth is low which bears some risk estimated as low to
medium. This means existing Gas Station and Cultural Lodge and Gust House in this area have
separate waste treatment each business component to compete minimized waste risk. The proposed
production process is environment impact assessment will sparely evaluate.

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13. CONCLUSIONS AND RECOMMENDATIONS
13.1 CONCLUSIONS
Results of the financial appraisal show that investing in Gas Station and Cultural Lodge and Gust
House service marketing is profitable. Based on the framework set out in this feasibility study the
following conclusions were made regarding the feasibility of proposed green coffee processing plant
enterer prize.
MARKET FEASIBILITY: A market opportunity was identified for the domestic service at the
present. The processing service demand and market trend confirms the project is marketable
TECHNICAL FEASIBILITY: The analysis of technical feasibility of the proposed service
industry enterprise revealed that the initial stock, machinery, equipments, production facilities and
services and the human resource could be integrated for efficient Gas Station and Cultural Lodge
and Gust House service. The marketing margin farcicalities will enables the project its products.
FINANCIAL FEASIBILITY: The analysis on financial feasibility of the proposed enterprise
revealed that based on the assumptions made, the enterprise is profitable. The enterprise is projected
to have a healthy cash flow and is viable over long term. The positive financial feasibility is,
however, dependent on stable inflation and macro-economic conditions. The profitability of the
service industry can be further increased by using alternative energy costs.

13.2 RECOMMENDATION
OVERALL FEASIBILITY: Based on the framework set out in this feasibility study where
feasibility is assessed in this three core areas, it can be concluded that the proposed processing
enterprise is feasible. The results of the feasibility study, however, are heavily dependent upon the
assumptions made during the study and other operating environments (political, environmental and
economic conditions) remain relatively stable.

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 14. ANNEXURE OF FINANCING ASSUMPTIONS
Annex 1: SUMMARY OF GAS STATIONS AND LODGE AND GUST HOUSE REVENUE
Production years Y-1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8 Y-9 Y-10
Summary Revenue unit
Revenue From Gas Station birr 209,088,000 219,542,400 230,519,520 241,317,846 250,029,206 250,029,206 250,029,206 250,029,206 250,029,206 250,029,206
Revnue From Gas Station Service birr 2,223,000 2,420,591 2,669,387 2,907,097 2,423,957 2,497,161 2,574,025 2,654,732 2,739,475 2,828,455
Total Gas Station Revnue birr 211,311,000 221,962,991 233,188,907 244,224,943 252,453,163 252,526,367 252,603,231 252,683,938 252,768,681 252,857,660

Revnue From Cultural Loadge Reveenue birr 28,054,763 44,759,218 61,934,123 84,400,280 119,065,487 172,899,831 256,877,761 388,280,240 594,320,579 917,855,080

G/Total Revenue birr 239,365,763 266,722,209 295,123,030 328,625,223 371,518,650 425,426,197 509,480,992 640,964,178 847,089,260 1,170,712,740
Good Sold Expence birr 242,341,123 255,896,632 277,943,410 305,755,858 341,952,392 390,447,262 457,097,788 550,675,167 684,320,662 877,729,836
birr 101% 96% 94% 93% 92% 92% 90% 86% 81% 75%

Annex 2: COST OF GAS STATION GOODS ASSUMPTIONS

COST OF GOODS SOLD
FUEL STATIONS Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
Fuel Supplies
Diesel 45,220,800 47,481,840 49,855,932 52,348,729 54,966,165 57,714,473 60,600,197 63,630,207 66,811,717 70,152,303
Gasoline 104,793,600 110,033,280 115,534,944 121,311,691 127,377,276 133,746,140 140,433,447 147,455,119 154,827,875 162,569,269
Kerosene 45,220,800 47,481,840 49,855,932 52,348,729 54,966,165 57,714,473 60,600,197 63,630,207 66,811,717 70,152,303
Total Fuel Cost 195,235,200 204,996,960 215,246,808 226,009,148 237,309,606 249,175,086 261,633,840 274,715,532 288,451,309 302,873,875
Oil and Lubricates 96,116 96,121 96,127 96,134 96,140 96,147 96,155 96,163 96,171 96,179
Car Wash Services 25,200 27,600 27,600 27,600 27,600 27,600 27,600 27,600 27,600 27,600
Salaries & Social charges- 156,000 163,800 171,990 180,590 189,619 199,100 209,055 219,508 230,483 242,007
Sub Total 277,315.5 287,521.3 295,717.3 304,323.2 313,359.4 322,847.3 332,809.7 343,270.2 354,253.7 365,786.4
Cafeteria and Restourant Cost Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
Housekeeping supplies 145,930 153,227 160,888 168,932 177,379 186,248 195,560 205,338 215,605 226,385
Utilities: Electricity, Water, Tele 587,955 617,353 648,220 680,631 714,663 750,396 787,916 827,312 868,677 912,111
Food cost 1,983,640 1,983,640 1,983,640 1,983,640 1,983,640 1,983,640 1,983,640 1,983,640 1,983,640 1,983,640
Snacks & beverage Cost 1,764,990 1,853,240 1,945,901 2,043,197 2,145,356 2,252,624 2,365,255 2,483,518 2,607,694 2,738,079
Salaries & Social charges 152,400 160,020 168,021 176,422 185,243 194,505 204,231 214,442 225,164 236,422
Transport cost 534,500 561,225 589,286 618,751 649,688 682,172 716,281 752,095 789,700 829,185
Sub Total 5,169,415 5,328,704 5,495,957 5,671,573 5,855,969 6,049,586 6,252,883 6,466,345 6,690,481 6,925,823

Total COST OF GOODS SOLD 200,681,931 210,613,185 221,038,482 231,985,044 243,478,935 255,547,519 268,219,533 281,525,148 295,496,043 310,165,484

62
Annex 3: COST OF LODGE AND GUST HOUSE GOODS ASSUMPTIONS
LOADGE COST y1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8 Y-9 Y-10
Administraive/ROOM SERVICE EXPENSE
Mesulanuse expenc 21,154,054.00 22,211,756.70 23,322,344.54 24,488,461.76 25,712,884.85 26,998,529.09 28,348,455.55 29,765,878.32 31,254,172.24 32,816,880.85
Tel Communications 68,894 75,783 113,675 170,513 255,769 383,653 575,480 863,220 1,294,830 1,942,246
Laundry Service. 4,409 4,850 7,275 10,912 16,368 24,553 36,829 55,243 82,865 124,298
Housekeeping supplies 344,469 378,916 568,374 852,561 1,278,841 1,918,262 2,877,393 4,316,089 6,474,133 9,711,200
Commission 137,788 151,567 227,350 341,025 511,538 767,307 1,150,960 1,726,441 2,589,661 3,884,491
Utilities: Electricity, Water, Telep 696,516 766,168 842,784 927,063 1,019,769 1,121,746 1,233,921 1,357,313 1,493,044 1,642,348
Salary Of Manageral & Administrative 843,600 885,780 930,069 976,572 1,025,401 1,076,671 1,130,505 1,187,030 1,246,381 1,308,700
Total Admistrative(COGAS) 23,249,730 24,474,820 26,011,872 27,767,108 29,820,571 32,290,721 35,353,543 39,271,214 44,435,087 51,430,164
Production Expence
Food cost of goods sold 14,235,000 15,658,500 23,487,750 35,231,625 52,847,438 79,271,156 118,906,734 178,360,102 267,540,152 401,310,229
Beverage 1,154,313 1,269,744 1,904,616 2,856,925 4,285,387 6,428,081 9,642,121 14,463,181 21,694,772 32,542,158
Commission 92,163 101,379 152,069 228,103 342,155 513,233 769,849 1,154,774 1,732,160 2,598,241
Salary of Hotel Service & Production 677,004 710,854 746,397 783,717 822,903 864,048 907,250 952,613 1,000,243 1,050,255
Maintenance & Spair Part 685,165 719,424 1,079,135 1,618,703 2,428,055 3,642,082 5,463,123 8,194,685 12,292,027 18,438,040
Utilities:/Overhed Cost 1,565,817 2,348,726 3,523,088 5,284,632 7,926,949 11,890,423 17,835,634 26,753,451 40,130,177 60,195,266
Total Production (COGS) 18,409,462 20,808,627 30,893,056 46,003,705 68,652,885 102,609,022 153,524,712 229,878,805 344,389,532 516,134,188

Total Good Sold Cost 41,659,192 45,283,447 56,904,928 73,770,813 98,473,457 134,899,743 188,878,255 269,150,019 388,824,619 567,564,352

Total Gas +Loadge Cost 242,341,123 255,896,632 277,943,410 305,755,858 341,952,392 390,447,262 457,097,788 550,675,167 684,320,662 877,729,836

63
ANNEX 4: PROJECTED PROFIT AND LOSS STATEMENT
INCOME STATEMENTS( Et birr '000)
Year 0 Y-1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8 Y-9 Y-10
Gross revenue 239,365,763 266,722,209 295,123,030 328,625,223 371,518,650 425,426,197 509,480,992 640,964,178 847,089,260 1,170,712,740
Production Cost
Cost Of Production/Less COGS 172,500,634 194,063,213 215,625,793 215,625,793 215,625,793 215,625,793 215,625,793 215,625,793 215,625,793 215,625,793
Gross Profit 66,865,129 72,658,996 79,497,237 112,999,431 155,892,857 209,800,405 293,855,199 425,338,386 631,463,467 955,086,948
(In % of Total Income) 28% 27% 27% 34% 42% 49% 58% 66% 75% 82%

Administrative & Marketing Expense 19,297,122 21,709,263 24,121,403 24,121,403 24,121,403 24,121,403 24,121,403 24,121,403 24,121,403 24,121,403
Total Operating Expenses: 19,297,122 21,709,263 24,121,403 24,121,403 24,121,403 24,121,403 24,121,403 24,121,403 24,121,403 24,121,403
Operating Profit 47,568,007 50,949,733 55,375,834 88,878,028 131,771,454 185,679,002 269,733,796 401,216,983 607,342,064 930,965,545
(In % of Total Income) 20% 19% 19% 27% 35% 44% 53% 63% 72% 80%
Less interest expense 25,445,818 26,718,109 28,054,014 29,456,715 30,929,551 32,476,028 34,099,830 35,804,821 37,595,062 39,474,815
Pre-tax income 22,122,189 24,231,624 27,321,820 59,421,313 100,841,903 153,202,974 235,633,967 365,412,161 569,747,002 891,490,729
Financial & Other Charges 0 0 0 0 0 0 0 0 0 0
Total Financial & Other Charges 0 0 0 0 0 0 0 0 0 0
Cumulative pre-tax income (NOL) 22,122,189 24,231,624 27,321,820 59,421,313 100,841,903 153,202,974 235,633,967 365,412,161 569,747,002 891,490,729
Income (Corporate) Tax 7,742,766 8,481,069 9,562,637 20,797,459 35,294,666 53,621,041 82,471,888 127,894,257 199,411,451 312,021,755
Profit after Taxation 14,379,423 15,750,556 17,759,183 38,623,853 65,547,237 99,581,933 153,162,078 237,517,905 370,335,552 579,468,974
Accumulated Profits - brought forward 0 14,379,423 30,129,979 47,889,162 86,513,015 152,060,252 251,642,185 404,804,264 642,322,169 1,012,657,720
Accumulated Profits - carried to the Balance Sheet 14,379,423 30,129,979 47,889,162 86,513,015 152,060,252 251,642,185 404,804,264 642,322,169 1,012,657,720 1,592,126,694

RATIOS (%)
Gross Profit/Sales 9% 9% 9% 18% 27% 36% 46% 57% 67% 76%
Net Profit After Tax/Sales 6% 6% 6% 12% 18% 23% 30% 37% 44% 49%
Return on Investment 51% 0 0 0 0 0 0 0 0 0
Return on Equity 170% 0 0 0 0 0 0 0 0 0

64
ANNEX 5: PROJECTED BALANCE SHEET
Production Years 0 Y-1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8 Y-9 Y-10
Assets
Cash 3,437,021 -3,984,694 7,984,979 21,770,599 57,088,740 118,689,196 213,584,126 360,342,426 588,853,730 946,194,886 1,506,511,996
Inventory - 13,800,051 15,525,057 17,250,063 17,250,063 17,250,063 17,250,063 17,250,063 17,250,063 17,250,063 17,250,063
Accounts receivable - 11,968,288 13,336,110 14,756,151 16,431,261 18,575,932 21,271,310 25,474,050 32,048,209 42,354,463 58,535,637
Total current assets 3,437,021 21,783,645 36,846,147 53,776,814 90,770,064 154,515,192 252,105,499 403,066,539 638,152,002 1,005,799,412 1,582,297,697
Gross property, plant & equipment 24,795,470 24,795,470 24,795,470 24,795,470 24,795,470 24,795,470 24,795,470 24,795,470 24,795,470 24,795,470 24,795,470
Less: Accumulated depreciation expense - -2,795 -5,590 -8,385 -11,180 -13,976 -16,771 -19,566 -22,361 -25,156 -27,951
Net property/equipment 24,795,470 24,792,675 24,789,880 24,787,084 24,784,289 24,781,494 24,778,699 24,775,904 24,773,109 24,770,314 24,767,519

Total assets 28,232,491 46,576,320 61,636,026 78,563,898 115,554,353 179,296,686 276,884,199 427,842,443 662,925,111 1,030,569,726 1,607,065,215
Liabilities Initial balance Year 1 Year 2 Year 3 Year 4 Year 5 Year 5 Year 5 Year 5 Year 5 Year 5
Accounts payable - 5,175,019 5,821,896 6,468,774 6,468,774 6,468,774 6,468,774 6,468,774 6,468,774 6,468,774 6,468,774
Notes payable/short-term debt - 0 0 0 0 0 0 0 0 0 0
Total current liabilities - 5,175,019 5,821,896 6,468,774 6,468,774 6,468,774 6,468,774 6,468,774 6,468,774 6,468,774 6,468,774
Long-term debt from 19,762,744 18,552,131 17,214,404 15,736,216 14,102,817 12,297,912 10,303,492 8,099,658 5,664,421 2,973,485 0
Shareholders equity 8,469,747 22,849,170 38,599,726 56,358,909 94,982,762 160,530,000 260,111,933 413,274,011 650,791,916 1,021,127,467 1,600,596,442
Total long-term debt and shareholders equity 28,232,491 41,401,301 55,814,130 72,095,125 109,085,580 172,827,912 270,415,425 421,373,669 656,456,337 1,024,100,952 1,600,596,442
Total liabilities 28,232,491 46,576,320 61,636,026 78,563,898 115,554,353 179,296,686 276,884,199 427,842,443 662,925,111 1,030,569,726 1,607,065,215

ANNEX 6: PROJECTED CASH FLOWS

Year 0 Y-1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8 Y-9 Y-10

Net income 14,379,423 15,750,556 17,759,183 38,623,853 65,547,237 99,581,933 153,162,078 237,517,905 370,335,552 579,468,974
Plus depreciation 2,795 2,795 2,795 2,795 2,795 2,795 2,795 2,795 2,795 2,795

Less increase in inventory - (13,800,051) (1,725,006) (1,725,006) - - - - - - -

Less increase in accounts receivable - (11,968,288) (1,367,822) (1,420,041) (1,675,110) (2,144,671) (2,695,377) (4,202,740) (6,574,159) (10,306,254) (16,181,174)
Plus increase in accounts payable - 5,175,019 646,877 646,877 - - - - - - -

Cash flow from operations - (6,211,102) 13,307,400 15,263,808 36,951,539 63,405,361 96,889,351 148,962,134 230,946,541 360,032,093 563,290,595
Less investment (24,795,470) - - - - - - - - - -

Cash flow from operations and invests (24,795,470) (6,211,102) 13,307,400 15,263,808 36,951,539 63,405,361 96,889,351 148,962,134 230,946,541 360,032,093 563,290,595

Plus net new equity capital raised 8,469,747 - - - - - - - - - -

Less dividends paid - - - - - - - - - - -

Plus net new long-term debt 19,762,744 (1,210,613) (1,337,727) (1,478,188) (1,633,398) (1,804,905) (1,994,420) (2,203,834) (2,435,237) (2,690,937) (2,973,485)
Plus net new bank borrowings - - - - - - - - - - -

Cash flow from ops, invests, and fin 3,437,021 (7,421,715) 11,969,673 13,785,620 35,318,141 61,600,456 94,894,931 146,758,300 228,511,304 357,341,156 560,317,110

Beginning cash balance - 3,437,021 (3,984,694) 7,984,979 21,770,599 57,088,740 118,689,196 213,584,126 360,342,426 588,853,730 946,194,886

Ending cash balance 3,437,021 (3,984,694) 7,984,979 21,770,599 57,088,740 118,689,196 213,584,126 360,342,426 588,853,730 946,194,886 1,506,511,996

65
ANNEX 7: PROJECTED WORTH MEASURE (NPV, IRR,) AND PAYBACK PERIOD BEFORE AND AFTER TAX (BIRR)
PROJRCT WORTH MAESURE ( NPV, IRR, PB ) before tax . Birr '000
Year 0 Y-1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8 Y-9 Y-10
Cash flow (24,795,470) 22,122,189 24,231,624 27,321,820 59,421,313 100,841,903 153,202,974 235,633,967 365,412,161 569,747,002 891,490,729
PV factor 100% 90.09% 82.64% 75.13% 68.30% 62.09% 56.45% 51.32% 46.65% 42.41% 38.55%
PV of cash flow (24,795,470) 19,929,880 20,025,014 20,526,884 40,584,757 62,612,738 86,483,079 120,927,352 170,464,773 241,629,704 343,669,676
NPV 1,102,058,386
IRR ( befor Tax ) 123%
Cash flow (24,795,470) 22,122,189 24,231,624 27,321,820 59,421,313 100,841,903 153,202,974 235,633,967 365,412,161 569,747,002 891,490,729
Cumultaive cash (24,795,470) (2,673,281) 21,558,344 48,880,164 108,301,476 209,143,380 362,346,354 597,980,320 963,392,482 1,533,139,484 2,424,630,214
Pay Back Period 2.00 Years 13 Months

PROJ RCT WORTH MAESURE ( NPV, IRR, PB ) AFTER TAX . Birr '000
Year 0 1 2 3 4 5 6 7 8 9 10
Cash flow (24,795,470) 14,379,423 15,750,556 17,759,183 38,623,853 65,547,237 99,581,933 153,162,078 237,517,905 370,335,552 579,468,974
PV factor 100% 90.09% 82.64% 75.13% 68.30% 62.09% 56.45% 51.32% 46.65% 42.41% 38.55%
PV of cash flow (24,795,470) 12,954,422 13,016,259 13,342,474 26,380,092 40,698,280 56,214,001 78,602,779 110,802,103 157,059,307 223,385,290
NPV 707,659,537
IRR ( After Tax ) 95%
Cash flow (24,795,470) 14,379,423 15,750,556 17,759,183 38,623,853 65,547,237 99,581,933 153,162,078 237,517,905 370,335,552 579,468,974
Cumultaive cash (24,795,470) (10,416,047) 5,334,509 23,093,692 61,717,545 127,264,783 226,846,715 380,008,794 617,526,699 987,862,250 1,567,331,224
Pay Bac k Period 2.00 Years 11 Months

Befor Tax After Tax

3,000,000,000 1,800,000,000

1,600,000,000
2,500,000,000
1,400,000,000
2,000,000,000 1,200,000,000

1,000,000,000
1,500,000,000
800,000,000
1,000,000,000 600,000,000

500,000,000 400,000,000

200,000,000
-
-
1 2 3 4 5 6 7 8 9 10 11
1 2 3 4 5 6 7 8 9 10 11
(500,000,000) (200,000,000)

66