Omo Kuraz project faces financial and technical challenges

In the Omo Valley, south of Ethiopia, combine harvesters and industrial turbines have been exposed to the elements for years, facing rain and sun. According to Ethiopian Investment Holdings, the Omo Kuraz sugar project has consumed more than 65 billion birr, approximately 1.1 billion dollars, with a result that resembles more of an industrial cemetery than a refinery.

Kuraz I plant remains incomplete

The Omo Kuraz sugar project has cost more than 65 billion birr (approximately 1.1 billion dollars), with the Kuraz I plant remaining 83% incomplete since construction was halted in 2018. The external debt of the Ethiopian sugar sector reaches approximately 144 billion birr (2.1 billion dollars), and the state plans to cover half of it through the federal budget.

Abandoned equipment deteriorates rapidly

Privatization discussions were interrupted in November 2025 due to a lack of serious offers, while machines and equipment remain abandoned without protection from the weather. An Ethiopian parliamentary report relayed in April 2026 described the Omo Kuraz V site as an open wasteland, with machines worth millions left to rust.

Construction halted due to financial issues

The report likened the situation to leaving a luxury car parked in an open field, with the doors open, for entire seasons. Moisture seeps in, electronic circuits degrade, metal structures oxidize. Each month that passes makes the resumption of service more expensive, or even technically impossible for some parts. The Kuraz V construction site had started with great ambitions in 2016, entrusted to the Chinese contractor JJIEC. Construction was suspended for financial reasons, and the sugar group's management has yet to decide on the fate of this plant.

Multiple sites remain suspended

Equipment bought at a high price remains stuck in an administrative no-man's land, while its value erodes every day. This is not an isolated case. The latest financial report of the sugar group, approved in 2026, confirms that work on several sites, Kessem, Omo Kuraz I, Omo Kuraz V, Tendaho, and Welkait, remains suspended for financial, security, and weather-related reasons. In other words, serious doubts hang over the commissioning of these infrastructures.

Kuraz I is nearly complete but non-functional

According to Ethiopian Investment Holdings, in 2026, the Omo Kuraz sugar project consumed more than 65 billion birr, approximately 1.1 billion dollars, and 83% of the Kuraz I plant remains unfinished. A staggering figure: we are talking about a structure that is almost three-quarters completed, yet incapable of producing even a single bag of sugar. The story of Kuraz I resembles an administrative soap opera.

Construction halted in 2018

Construction had progressed until that famous threshold of 80% before abruptly freezing in 2018, after the cancellation of the contract with the Metals and Engineering Corporation, better known by its acronym MetEC. Since then, the construction site has been completely halted, as if suspended in time. The most frustrating thing is that the finish line seems close on paper.

Remaining costs are high

According to the same parliamentary report, nearly 19 billion birr would still be needed to complete the construction of the Omo Kuraz I plant. A significant amount, but which seems almost ridiculous compared to the tens of billions already spent without production.

Wolkayit plant faces similar issues

The Wolkayit plant is no exception to this pattern. According to the June 2026 statement made during the Ethiopia Delivers summit, an additional 42 billion birr would be needed to complete it. In total, the Omo Kuraz areas have cost 341 million dollars, mainly financed by debt, for an initial ambition that shows the scale of the discrepancy: crush 60,000 tons of cane per day thanks to a plantation of 100,000 hectares spread over four plants.

Debt and financial burden

Behind these staggering figures lies a much more down-to-earth question: who will pay the bill? The external debt of the Ethiopian sugar sector today amounts to approximately 144 billion birr, or about 2.1 billion dollars. A rescue plan announced in July 2026 plans for the state to cover half of it through the federal budget, meaning that Ethiopian taxpayers will indirectly pay for rusted machines in a field.

Privatization efforts stalled

Facing this colossal debt, privatization could have seemed logical. It is, however, blocked. In November 2025, Ethiopian Investment Holdings informed the Parliament that privatization discussions had been interrupted due to a lack of serious offers and due to legal and technical obstacles considered too complex to overcome quickly. This blockage illustrates a rather cruel paradox.

Investors remain hesitant

More than 53 billion birr had already been spent as early as June 2022, and the amounts have only increased since without any private buyer rushing to take over the project. It is difficult, in fact, to convince investors when the equipment supposed to make the plants operate is deteriorating outside, under the rain, while negotiations drag on.

Project highlights risks of large-scale industrial projects

The Omo Kuraz project illustrates, in its own way, the pitfalls that can be encountered by large industrial programs launched with ambition but without sufficient safeguards on financing and technical follow-up. Between abandoned machines, plants frozen at 83% and a colossal debt to be shared, the Ethiopian sugar issue resembles less an industrial success story than a costly lesson on what not to do when building at this scale.