Note:
This document is an unofficial translation, commissioned by OpenLandContracts, of the original Amharic-language contract disclosed by the government
Amharic version of contract available below as an associated document
Upon mutual agreement of the parties, the land lease agreement can be renewed for additional year/s on similar contractual terms. If Tracon Trading wishes to renew the land lease agreement it must notify the Ministry of Agriculture 6 months before the expiry of the land lease agreement.
Tracon Trading shall take good care of and conserve the leased land and natural resources on it. Tracon Trading shall also: (a) conserve trees that have not been cleared during the leased land preparation; (b) utilize various methods that are appropriate to prevent soil erosion especially in sloping areas; and (c) respect and implement legislation in relation to natural resource conservation.
Tracon Trading shall receive exemptions on import duties on agricultural tools and machinery in accordance with the laws of Ethiopia that are proclaimed for foreign companies
Starting from the day this land lease is signed, there shall be a 3 years grace period (of payment). The unpaid rent during the grace period shall be prorated over the remaining years of the lease period and shall be paid along with the regular annual payment. Hereinafter, the lease rate shall be Birr 394.50 per hectare, or Birr 1,972,500 per year. The total amount of payment for the lease period shall be Birr 49,312,500. Upon payment of the annual rent, a receipt shall immediately be submitted to the district (wereda) administration office. There shall be a down payment of 1 year of rent. The Ministry of Agriculture reserves the right to revise and change the lease rate as deemed necessary and inform Tracon Trading accordingly. When the grace period ends, Tracon Trading shall settle the annual land rent in addition to the prorated amount that is not paid during the grace period to the regional office where the land is located every year between the months of December and June in accordance with the predetermined land lease rate for rural lands.
Tracon Trading shall have the right to build infrastructure such as dams, water boreholes, power houses, irrigation systems, roads, bridges, offices, residential buildings, fuel stations, health and educational institutions, whenever deemed appropriate by submitting a permit request to the relevant authorities with their consultation and subject to the type and size of the investment project. Within 6 months of termination or the expiry of the land lease agreement, or cancellation of the investment license, Tracon Trading shall remove assets that are installed on the leased land and hand over the leased land to the Ministry of Agriculture. When the land lease agreement is terminated, the Ministry of Agriculture will have priority to negotiate and purchase the properties on the land and will pay Tracon Trading for the value of improvements made and expenses (expenditures) incurred on the land at the then market rate, after any outstanding dues that Tracon Trading owes are deducted. Unless the Ministry of Agriculture would like to keep certain chattels on the land, Tracon Trading has the right to detach and take what belongs to it.
The Ministry of Agriculture shall cooperate in providing adequate security, free of charge, so that Tracon Trading may develop the land peacefully free from any trouble, riot or disturbance other than force majeure
Tracon Trading shall start developing the land within 6 months from the signing of the land lease agreement, provided that all relevant government licenses have been issued. Tracon Trading shall develop 1/3rd of the leased land within 1 year from the date the land lease agreement was signed and must have developed the entire leased land within 3 years of the date the land lease agreement was signed.
When dispute arises between the Ministry of Agriculture and Tracon Trading in connection with or arising out of the land lease agreement, both parties shall endeavor and do their utmost efforts to resolve the dispute peacefully and to the benefit of both parties. If the dispute cannot be resolved that way, then it shall be referred to the Ethiopian Federal Court.
Tracon Trading does not have the right to transfer the leased land to another company or individual unless 75% of the land has been developed and the prior written approval of the Ministry of Agriculture has been obtained. Once the request is submitted, the Ministry of Agriculture shall respond promptly.
The land lease agreement may be terminated if: (i) the land lease agreement has expired; (ii) the Ministry of Agriculture is unable to deliver the land to Tracon Trading due to a force majeure event; (iii) either party fails to fulfill any of its obligations or covenants in the land lease agreement even after the expiry of 6 months from the date of receipt of a notice from the other party to do so; (iv) Tracon Trading fails to make annual rental and other tax payments for 2 consecutive years, develop the leased land within the time limits stated in the land lease agreement, or damages the natural resources on the land; and (v) if either party has another good reason to terminate the land lease agreement and has given the other party 6-month’s prior written notice to such effect.
Upon the request of the Ministry of Agriculture, Tracon Trading shall provide accurate data and report investment activities. The Ministry of Agriculture has the exclusive right to control and follow up that Tracon Trading is executing all of the obligations diligently.