Investment Office ANRS

Project Profile on the Establishment

of High School

Development Studies
Associates (DSA)

October 2008
Addis Ababa
 Table of Contents

1.Executive Summary...................................................................................3
2.Service Description and Application........................................................3
3.Market Study, School Capacity and Service Delivery Program............4
3.1Market Study...............................................................................................................4
3.1.1Present Demand and Supply................................................................................4
3.1.2Projected Demand..............................................................................................61
3.2School Capacity........................................................................................................66
3.3Service Program........................................................................................................66
4.Equipments and Utilities.........................................................................66
4.1Availability and Source of furniture and Equipment................................................66
4.2Annual Requirement and Cost of furniture and Equipment.....................................66
5.Location and Site......................................................................................67
6.Service Delivery Process and Engineering ............................................67
6.1Service Delivery Process..........................................................................................67
6.2School Furniture and Equipment..............................................................................68
6.3Civil Engineering Cost..............................................................................................68
7.Human Resource and Training Requirement.......................................68
7.1Human Resource ......................................................................................................68
7.2Training Requirement...............................................................................................69
8.Financial Analysis....................................................................................69
8.1Underlying Assumption ...........................................................................................69
8.2Investment.................................................................................................................70
8.3Service Costs.............................................................................................................71
8.4Financial Evaluation.................................................................................................72
9.Economic and Social Benefit and Justification.....................................72
ANNEXES...................................................................................................74
 1. Executive Summary
This profile envisages the establishment of high school (s) in Amhara Region to enroll
550 students.

The present demand for standard high schools in urban centers of the Region, mainly in
zonal towns, is very crucial.

The total investment requirement is estimated at Birr 2.1 million out of which 56.2% is
for furniture and equipment.

The plant will create employment opportunities for 19 persons.

The project is financially viable with an internal rate of return (IRR) of 17.9% and a net
present value (NPV) of Birr 1.0 million discounted at 18%.

2. Service Description and Application

These are high schools from 9th to 10th grades and college preparatory classes which
provide high standard and rigorous teaching and learning for students who can afford to
pay the tuitions. The schools will be similar to those like St. Joseph, Cathedral, School of
Tomorrow and Nazareth in Addis Ababa. These schools are known for their rigorous
teaching and almost all students from these schools pass national examinations. This
project idea is to establish such private high schools at least in the major urban centers of
the Region.

In developed countries the best and most efficient, though expensive, social services are
provided by the private sector. The participation of the private sector in the provision of
social and other services will expand the volume of these services and also will reduce
the burden on public institutions which provide such services. It will also give more
choices to users of these services. Those who can afford will go to private organizations

3
and the rest will use the services of state or public institutions. This is what is happening
mainly in Addis Ababa to day in the areas of health and education.

Education is key to change and progress, therefore, the Government of

Ethiopia has adopted a new Education Sector Development Policy and
Program in 1994 to make this sector as one of the pillars for poverty
reduction and benefit of the masses. In line with the Government
Policy and Program, the Amhara Reginal Government has developed its
own Policy and Program.

3. Market Study, School Capacity and Service Delivery

Program

3.1 Market Study

3.1.1 Present Demand and Supply

The general education supply and standards of the Amhara Region in relation to the
country is presented bellow.

Table 1 indicates that the ratio of total school age population to total population is about
24.8% and the ratio of the total enrolled students to the total population is about 13.2 %,
which is below the developing world standard of 15%, while the ratio of the total enrolled
students to total school age population is about 53.4%, which indicates that about 47% of
the school age population of the country did not enroll in 1994 E.C.

At Regional level, Tigray has the highest gross enrollment ratio (GER) in both Primary
(77.6%) and Secondary (38.3%) schools among the six populated Regions (excluding
Addis Ababa), followed by SNNPR (67.1%) and then by Oromia (62.4%) in Primary
schools and vice versa in Secondary Schools (15.9% in the latter and 13.2% in the
former). Whereas Amhara Region has very poor GER both in primary (58.1 % ) and

4
secondary (12.0%) education which is last third in both cases from Somali and Afar
Regions.
The present low enrollment rate of the region is directly related to the supply sides of
educational inputs. The existing 25,657 sections which are supposed to serve 1,282,850
school age children are obliged to enroll 655,198 extra students.

The very high gross enrollment ratio exhibited in Gambella and Benshangul Gumuz
seems that students enrolled are above the school age population.

The number of Existing Primary and Secondary Schools and Students Enrolled by
Regions in 1994 E.C is indicated bellow in table 2. There were a total of 12,087 Primary
(of which 619 are non-government) and 435 Secondary (of which 54 are Non-
government) Schools in the country during 1994 E.C. with a total of 117,308 class rooms
of which 108,888 are Primary serving 7,982,760 students and 8,420 Secondary sections
serving 684,630 students.
Table -1-
Population, school Age Population and Enrollment Ratio By Region (1994 E.C.)
Population in ‘000’
No

5
Gender 11 D. 61Secon 4Primary 37996Secondary
parity DawaPri dary (1-8) 46.9%
mary (15-16) 2 shifts
IndexP (7-14)
upil (9-10)
teacher
RatioPu
pil
Section
RatioSo
urce:
DSA,
ANRS'
potential
Assessme
nt
Survey,
Educatio
n Sector
final
Report,
2006.
Unit199
6/97199
7/98199
8/99199
9/00200
0/01200
1/02200
2/03200
3/04200
4/05Gro
ss
Enrollm
ent
Ratio
%5.96.7
7.48.18.
38.013.0
513.871
9.3Net
Enrollm
ent
Ratio9.
8Gross
Particip
ation

6
Rate620
9361.37
5.11208
9455798
2760684
6301088
8884207
3.381.3S
ource:
Educati
on
Statistic
s
Annual
Abstrac
t, 1994
E.C
(2001/0
2)82.5S
econdar
y1Tigra
y3,7977
8117272
2809023
77.638.3
2Afar1,
2432455
9345569
512.64.2
3Amhar
a16,748
3,38174
3119986
2565758
.112.04
Oromia
23,0234,
7591,05
1225274
4017762
.415.95S
omalia3
,797813
1945253
147413.
12.36B.

7
Gumuz
5511152
55977
% of
Qualifie
d
Teacher
s
Gross
Enrollm
ent
Ratio
*About
83% of
the
populati
on age
15 to 16
are out
of the
educati
on
system.

A.
Access
Out of
106
Woreda
s in the
Amhara
Nationa
l
Regiona

8
l State
27
Woreda
s do not
have
seconda
ry
schools.
In the
period
1996/97
-
2000/01,
the
average
annual
student
number
growth
was
14.62%
(male
14.9,
females
14.2)
while
number
of
teacher
average
annual

9
growth
was
only
1.6%.
The
average
annual
growth
rate for
gross
enrollm
ent
ratio
was
10.1%
(male
10.0
and
female
9.9).
Pupil
section
ratio
grew by
14.0%
and
6.8%
respecti
vely.

Availab
le

10
informa
tion
indicate
s that to
meet
the goal
of
increasi
ng
access
to
educati
on the
ANRS
has
planned
to
constru
ct 481
lower
primary
schools,
upgrade
220
primary
schools,
expand
2,024
classroo
ms in
existing

11
overcro
wded
schools,
maintai
n and
expand
other
facilities
. The
task of
constru
ction
requires
technica
l skills,
capital
and
immens
e work,
which
requires
the
particip
ation of
the
private
sector
investm
ent.

B.

12
Equity
Equity
is
expecte
d to
address
the
questio
n of
gender
and
zonal
gaps.
In
2003/04
the
gross
particip
ation
was
13.71%
(17.7%
male,
9.57%
female).
The
zonal
disparit
y in
provisio
n of

13
seconda
ry
educati
on is
shown
in table
4.
The
disparit
y
among
the
zones
above
the
regional
average
reads
as;
Bahir
Dar(50.
1%,
South
Wollo(1
0.3%),
North
Gonder
(9.7%),
Awi(9.6
%) and
North

14
Shewa
(8.8%).
On the
other
end,
zones
below
the
regional
average
are;
Oromiy
a
(4.0%),
Wag
Himera
(4.1%),
West
Gojjam
(5.5%),
South
Gonder
(5.9%),
North
Wollo
(6.1%)
and
East
Gojjam
(7.6%).
The

15
gender
parity
index is
highest
at
North
Gonder
zone
and
lowest
at
South
Wollo,
Oromiy
a and
North
Wollo
zones.

Table
4:
Suppl
y and
indica
tors
of
Secon

16
 dary
Educa
tion
for
2000/
01 by
Zone

Zone

In the
Amhara
Region,
the
provisio
n of
social
services
by the
private
sector is
almost
non-
existent.
However
,regional
informat
ion
indicates
that
NGOs
are
particip
ating
mainly

17
in basic
educatio
n
program
s. In the
region
there are
16
accredit
ed and
14 pre-
accredit
ed
private
colleges
located
in 8
towns.
Their
capacitie
s are
4,952
(accredit
ed
colleges)
and
3,154
(pre-
accredit
ed
colleges).
Out of
the
figures

18
3,705
(74.82%
-
accredit
ed) and
2,289
(72.57%
- pre-
accredit
ed)
designat
ed for
10+1
teacher
training
program
s and the
remaini
ng 1,247
(25.18%
accredit
ed)
places
are
assigned
for other
fields of
study.

Moreove
r, there
are also
one
TTC,

19
two
TTI’s,
131
CSTC’s
and 20
middle
level
TVET
institutio
ns in the
region.
These
institutio
ns could
not meet
the
human
resource
demand
of the
region.

The
project
idea of
private
high
schools
in the
region
stems
from the
fact that
such

20
high
schools
are in
great
need by
many
parents
in the
major
urban
centers,
like
Bahir
Dar,
Gondar,
Dessie-
Combolc
ha,
Debre
Birhan
and
Debre
Markos
to make
a private
high
school a
financial
ly viable
and
rewardi
ng
venture.
.

21
The
quality,
access,
equity
and
efficienc
y of the
existing
educatio
nal
service
delivery
system
of the
country
are in
general
below
standard
. A brief
look of
educatio
n service
delivery
of the
Amhara
Region
especiall
y with
referenc
e to
Seconda
ry level
is

22
indicate
d below.

The new
Educatio
n Policy
of
Ethiopia
(1994)
sets the
followin
g norm
for this
level of
educatio
n.
“Second
ary
Educatio
n will be
of four
years
duration
,
consistin
g of two
years of
general
secondar
y
educatio
n which
will
enable

23
students
identify
their
interest
for
further
educatio
n, for
specific
training
and for
work.
General
educatio
n will be
complete
d at the
first
cycle
(grade
10). The
second
cycle
secondar
y
educatio
n and
training
will
enable
students
to
choose
subjects

24
or areas
of
training
which
will
prepare
them
adequat
ely for
higher
educatio
n and
for
work)”

The
compreh
ensive
secondar
y
educatio
n (grade
9+10) is
meant
for 15
and 16
year age
groups.
Since
this is
the
terminat
ion of
general

25
educatio
n, those
who
complete
the level
are
expected
to join
the
medium
&
interme
diate
technical
vocation
al skill
training
program
s which
provide
three
level
certificat
ion
dependi
ng on
training
duration
. Hence,
10+1,
10+2 &
10+3
entitle
certificat

26
e level 1,
certificat
e level 2
and
diploma
respectiv
ely.

Higher
secondar
y
educatio
n (grade
11 & 12)
designed
for 17 &
18 year
age
group.
If
successf
ul the
group is
to
pursue
tertiary
educatio
n. Table
3 shows
trends of
secondar
y
educatio
n in the

27
ANRS.

Table
3:
Trends
Secon
dary
Educat
ion in
the
AARS
Indicator
s
Fem Male Female Total
aleT
otal
Wes
t
Gojj
am6
.3
4.75
.50.
752
865
042
49A
wi1
0.19
.19.
60.9
467
540
674
1Ea
st
Gojj
am
8.46
.87.
60.8
498
053
505
3No
rth
Goj
am1
0.07
.58.

28
80.7
406
835
293
5Or
omi
ya4.
93.0
4.00
.641
625
410
0551
095
(26.2
%)
Wat
er52
.6%
Clini
c TV
prog
ram
s----
10.9
11.4
13.7
117.
0
*Nu
mbe
r of
Scho
olsN
o778
0818
1828
5879
9110
Num
ber
of
Teac
hers
No2,
2642
,194
2,28
62,2
692,
4152
,746
2,58
72,7

29
313,
865
Teac
her
Stud
ent
Rati
oNo
1:32
1:40
1:43
1:50
1:50
1:43
1:43
1:42
1:56
Secti
on
Stud
ent
Rati
oNo
1:62
1:70
1:71
1:77
1:79
1:77
1:66
1:58
1:73
Text
book
Stud
ent
Rati
o1:1
1:11
:1Re
petit
ion
Rate
%11
.439.
808.
16D
rop
out
Rate
%16
:051
4:02
11:2
9Pro
moti

30
on
Rate
%72
.527
6:52
80.5
5Nu
mbe
r of
Stud
ents
No7
5,77
887,
4329
8,42
8110
,970
120,
1071
19,6
9710
5,25
3131
,519
169,
993S
choo
l
Facil
ities
6986
Regi
onSc
hool
Enr
ollm
entS
ectio
nsSt
uden
t/sec
tion
Pri
mar
ySec
onda
ryPr
imar
ySec
onda
ryPr
imar
ySec
onda
ryPr

31
imar
ySec
onda
ry1T
igra
y926
4158
8941
7228
0902
3903
65.3
80.0
2Afa
r142
7291
2434
5569
5324
1.91
08.0
3Am
hara
2975
8519
4804
8119
9862
5657
1556
75.9
77.1
4Or
omia
4592
1392
9467
9022
5274
4017
7283
573.
379.
55So
mali
regi
on
2721
4106
5725
2531
4743
972.
3134
.76B
..Gu

32
muz
2751
2102
0095
9771
7359
158.
865.
77S
NNP
R23
5284
1770
4191
1452
7222
2412
7179
.790.
18G
amb
ella1
4374
0497
2069
6543
661.
957.
49H
arra
ri48
4272
7164
0251
4805
3.18
0.01
0A.
Aba
ba30
3583
8509
3122
4216
1151
4846
3.01
7358
9.11
6.67
SNN
PR1
2,90
32,6
4458
3114

33
5272
2224
67.1
13.2
8Ga
nbel
a217
4010
2069
6541
02.7
16.7
9Ha
rrari
1662
6764
0251
4107
.559.
610
A.A
baba
2,57
0364
1321
2242
1611
5128
.469.
311
D.D
awa
3305
4156
9866
2080
.233.
2Tot
al65,
3451
3,22
22,9
9268
4630
1088
8861
.617.
1Sou
rece:
Edu
catio
n
Stati
stics
Ann
ual

34
 Abst
ract,
1994
E.C
(200
1/02)
Pri
mar
y
Shif
t
Syst
em
•
1

•
•
2,448

Lat
rine
•
1024
•
(24.5

Lib
rary
2722
(65.1
%)

Ped
a
Cen
ter
•
Out
of
the
tota

35
l
sch
ools
,
3,06
0
are
loca
ted
in
Am
har
a
Reg
ion,
of
whi
ch
2,97
5
and
85
are
Pri
mar
y
and
Sec
ond
ary
sch

36
ools
,
res
pect
ivel
y.
The
Pri
mar
y
sch
ools
hav
e a
tota
l of
25,6
57
sect
ions
serv
ing
1,94
8,04
8
stu
den
ts
whi
le
the

37
Sec
ond
ary
sch
ools
hav
e
1,55
6
Sect
ions
serv
ing
119,
986
stu
den
ts.

In
the
sam
e
tabl
e
we
can
also
loo
k at
the

38
stu
den
t-
sect
ion
rati
o of
eac
h
Reg
ion.
In
this
res
pect
,
stu
den
ts
per
sect
ion
in
Pri
mar
y
Sch
ool
are
hig
her

39
in
Am
har
a
Reg
ion
(75.
9)
nex
t to
SN
NP
R
(79.
72)
am
ong
pop
ulat
ed
Reg
ions
.
But
stu
den
ts
per
sect
ion
in

40
Sec
ond
ary
Sch
ools
are
hig
her
in
So
mal
i
Reg
ion
(13
4.7)
Foll
owe
d
by
Afa
r
(10
8.0)
.
Am
har
a
Reg
ion
is

41
8th
wit
h
77.1
stu
den
t
sect
ion
rati
o.

Tab
le-
2-
No
of
Pri
mar
y
and
Sec
ond
ary
Sch
ools
and
Stu
den
ts
Enr

42
olle
d
by
Reg
ion
(19
94
E.C
)
No.
Reg Tigray 996 393 44820 17685
ion
Pri
mar
y
(7-
14)
Sec
ond
ary
(15-
18)
Clas
s
roo
mPr
ima
ryse
con
dary
Cou

43
ntry
total
172
026
624
774
090
298
080
16.9
4.85
.90.
746
703
603
5No
rth
Gon
dor
9.01
0.36
.71.
153
893
714
36B
ahir
Dar
59.2
43.1
50.1

44
0.75
586
526
454
Reg
ion9
.17.
48.3
0.85
079
423
341
Sou
rce:
DSA
,
ANR
S'
pote
ntial
Asse
ssme
nt
Surv
ey,
Educ
ation
Sect
or
final
Repo
rt,
2006
.

45
Sou
th
Wol
lo12
.28.
410.
30.6
538
043
164
2No
rth
Wol
lo7.
74.5
6.10
.660
793
225
32
Wa
g
Hu
mer
a4.5
3.74
.10.
850
774
504
3So

46
 uth
Gon
dor
Mal
e
C.
Qu
alit
y
Qua
lity
in
edu
cati
on
is a
nec
essit
y
whi
ch
nee
ds
to
be
refl
ecte
d in
goal
s,

47
cont
ent,
lear
ning
envi
ron
men
t,
proc
esse
s,
mod
e of
asse
ssm
ent
plus
inte
rnal
effi
cien
cy
and
teac
her
qual
ifica
tion
etc.
Our
edu

48
cati
on
syst
em
suff
ers
fro
m
lack
of
alm
ost
all
the
qual
ity
mea
sure
s.

The
aver
age
ann
ual
gro
wth
rate
of
stud
ent
pop

49
ulati
on
in
the
peri
od
199
6/97
-
200
0/01
was
14.6
2%,
whil
e
that
of
teac
hers
was
only
1.6
%.
Pup
il
teac
her
rati
o
also

50
gre
w
by
14.0
%
in
the
sam
e
peri
od,
whil
e
pupi
l
sect
ion
rati
o
incr
ease
d by
6.8
%.
This
mea
ns
mor
e
stud
ents

51
per
sect
ion
&
per
teac
her
affe
ctin
g
qual
ity
neg
ativ
ely.
In
the
peri
od
und
er
con
side
rati
on
regi
onal
ly
perc
ent
of

52
qual
ifie
d
teac
hers
was
41
%
mal
e &
33
%
fem
ale).
59
%
of
the
teac
hing
forc
e in
the
seco
ndar
y
leve
l is
und
er
qual

53
ifie
d.
The
afor
eme
ntio
ned
pro
ble
ms
cou
pled
with
shor
tage
and
poo
r
qual
ity
of
instr
ucti
onal
mat
erial
s
add
to
the
inad

54
equ
acy
of
seco
ndar
y
edu
cati
on
qual
ity
in
the
regi
on.

D.
Eff
icie
ncy
Inte
rnal
effi
cien
cy
coul
d be
mea
sure
d
amo

55
ng
othe
r
thin
gs
by
revi
ewi
ng
tren
ds
in
repe
titio
n
rate,
dro
pout
rate,
pro
mot
ion
rate
and
grad
uati
on
rate.
The
seco
nd

56
edu
cati
on
dev
elop
men
t
pro
gra
m
(ES
DP-
200
3-
200
5)
of
the
AN
RS
has
set
targ
ets
for
thes
e
imp
orta
nt
mea

57
sure
s of
inte
rnal
effi
cien
cy,
Exc
ept
for
grad
uati
on
rate.
Thu
s,
pro
mot
ion
rate
will
be
rais
ed
to
80.5
5%
(20
04/0
5)
fro

58
m
72.5
2%
in
200
2/03
.
Rep
etiti
on
rate
and
dro
p
out
rate
shal
l be
decr
ease
d
fro
m
11.4
3%
in
(20
02/0
3)
to
8.16

59
%
in
(20
04/0
5)
and
fro
m
in
16:0
5%
in
(20
02/0
3)
to
11:2
9%
in
200
4/05
resp
ecti
vely
.
In
gen
eral
the
curr
ent

60
edu
cati
on
perf
orm
anc
e of
the
Reg
ion
dem
and
s an
over
all
imp
rove
men
t
with
priv
ate
sect
or
part
icip
atio
n.

3.1.2
Projecte

61
Sust
aina
ble
dev
elop
men
t is
abo
ut
enh
anci
ng
hum
an
well
-
bein
g
thro
ugh
time
and
hen
ce
the
im
62
2 Afar 280 119 12600 5355
3 Amhara 4393 1703 197685 76635
4 Oromia 6113 2384 275085 107280
5 Somalia 896 403 40320 18135
6 Ben.Gumuz 140 58 6300 2610
7 SNNPR 3595 1316 161775 59220
8 Gambella 50 19 2250 855
9 Harrari 38 14 1710 630
10 Addis Ababa 411 183 18495 8235
11 Dire Dawa 82 29 3690 1305
Source: Population and Housing Census, Country level 1994 E.C.
In addition assessments of the state of education in the ANRS made by the DSA, has
revealed the following gaps existed in the areas of the educational delivery system in the
region.
• Level of Literacy
The national literacy rate level is 29.2% and that of ANRS stands
at 23.1%. Gaps are 70.8% nation wide and 76.9% for ANRS.
• Kindergarten Education
Region’s coverage of KG education is only 1.4% with a very high
gap of 98.6%
• Primary Education (both first and second cycles)
Participation rate in the region at this level is 64.2% with unmet
need of 35.8%
• Secondary Education (both first and second cycles)
In the secondary education system participation rate has reached
17% in the region with a gap of 83.0%.
• Teacher Education/Training
2000/01 figures in teaching force qualification in the region have
indicated that 3.4% (first cycle primary), 66.3% (second cycle
primary) and 58.6% secondary (both cycles) were under qualified
and/or unqualified. For 2005/06 alone there will be shortage of
12,768 teachers for all levels.
• TVET

63
 17 schools and 4 colleges are established to address the technical
and vocational needs in the area.
• Non-Formal Education
Plays very important role in provision of basic education in the
inaccessible areas to increase participation rate at the primary
level.

• Special Education
Meant to serve people with disabilities.
• Construction
Can facilitate or constrain access in education depending in its
availability or shortage.
• Textbook and Instructional Materials
They play important roles in availing quality education.

In general, therefore, in order to provide sufficient and quality education in the Region,
the participation and involvement of the community at large, NGOs, and private
investors in building schools, and providing schools with instructional materials,
equipment, furniture is vital.

Although, traditionally, private schools have been a luxury only the rich
can afford, this is not necessarily the case in the current re-emergence
of the private sector in Ethiopia's education system.

Experiences have shown that development partners in education have contributed a lot in
education delivery and continue to do so. To mention a few, they were involved in
construction, textbook production and distribution, production of furniture, supply of
educational materials and equipment. Sometimes the contributions are in the form of
cash, labor and skill/knowledge. The collaboration will be needed more as the demand
for quality education mounts.

3.1.3 School Fee

64
The proposed school will cater to the needs of children of medium and
high income groups. Currently three categories of schools are being
run in Ethiopia, catering to three main segments of the market, mainly
higher medium and low-income groups. The schools, which serve the
high and medium income groups, are run by the private sector. They
usually charge high fees per month per student and these schools
have large facilities, enjoy repute due to their modern system of
education by using scientific techniques and have qualified and
specialized faculty. Most private schools in Addis Ababa fall in the
medium category having fee range from Birr 200.00 to Birr 500.0 per
month per student. The third category (medium range) provides
facilities even less than the minimum required by the Ministry of
Education, i.e. less space per student (minimum required 12 sq. ft. per
student and high student’ teacher ratio.

Parents are curious about the future of their children so they think
extensively before admitting their children in any school. Following are
the main factors (not conclusive) on the basis of which parents make
choice of schools.
1. Distance from home
2. School track record/history
3. General reputation
4. Fees
5. Qualification and experience of the head of school and other faculty.
6. Physical infrastructural facilities.
7. Courses offered and medium of instruction.
Besides the above, there are some other subjective, social and status
considerations which also play an important role in making decision.
In these respect the proposed school is assumed to be of medium
category and fulfills the best standards of its kind, its service charge

65
 could be Birr 200.00 per month per student, which is Birr 2,000.00 per
annum excluding annual registration fee.

3.2 School Capacity

The capacity of the proposed high school is assumed to enroll about 550 students at full
capacity.

3.3 Service Program

Reasonable time is required to promote the importance of private school and thus attract
parents towards the school. Therefore, the proposed school is assumed to start operation
at 50% capacity in the first year, 65% in the second year 75% in the third year, 85% in
the fourth year and 100% thereafter.

4. Equipments and Utilities

4.1 Availability and Source of furniture and Equipment

All essential school furniture and equipments such as computers, desks, blackboards,
cupboards and chalk are available locally.

4.2 Annual Requirement and Cost of furniture and

Equipment
The total cost of school facilities is estimated at about Birr 794,000 of which Birr 50,000
and 15,000 are costs of utilities and office furniture, respectively.

Table- 6- Required Furniture and Equipment

Furniture &
Quantity Price/Unit Total (Birr)
Equipment
Computers 20 10,000 200,000
Server 1 60,000 60,000
Printers (Laser) 1 5,000 5,000
Printers (Dot Matrix) 1 8,000 8,000
UPS 2 3,000 6,000

66
Books & Labs
(Instruments) 150,000
Furniture & Fixture 300,000
Electrical & water 50,000
Office Furniture 15,000
Total 794,000

5. Location and Site

Investment opportunity regarding setting up of high school can be
opened in big cities where relatively high and medium income groups
are settled, like Bahir Dar, Gondar, Dessie, Debre Markos, Debre
Berhan and Kombolcha.

6. Service Delivery Process and Engineering

6.1 Service Delivery Process
Education Service delivery is a noble and professional activity that
requires experiences and qualifications from different streams of
disciplines. At different levels of education, the teaching process is
carried out as per the curriculum, standards, rules and regulations set
by the Ministry of Education of the country. Education service delivery
follows the following major steps.
- The school
- registers students at the beginning of each year/semester,
- allocates teaching periods to each teacher,
- provides teachers with necessary teaching materials (text
books, chalks etc)
- Each teacher
- prepares weekly, monthly and annually lesson plan,
- delivers /lectures his lesson plans as per schedules,
- gives home works as required and corrects,

67
 - gives tests and examinations as per schedules, corrects and
records on each student's card/ certificate and gives rank
and then pass over same to the school.

6.2 School Furniture and Equipment

Even though the minimum requirement of furniture and equipments of
a high school is primarily determined by the Ministry of Education,
private high schools are required to supply extra and timely teaching
materials so as to develop the all rounded development of enrolled
students.
6.3 Civil Engineering Cost
Private high schools do not have large student population. Average size of a private high
school is about 500 students. For a private high school of 550 students, about 9000m 2 of
land is required of which 800m2 could be for building class rooms, library, and laboratory
and office buildings. The total construction and civil engineering cost of the school
building is estimated to be Birr 1,200,000.00 at Birr 1500.00 per meter square. Land lease
for social services is assumed to be 25% of normal charge.

7. Human Resource and Training Requirement

7.1 Human Resource

The proposed high school will require the following minimum staff.
Table -7- Required Human Resource
Position Numb Salary/month/per Salary/
er son annum
Faculty Members
Subject specialist 2 2000 48,000
Senior Teachers 3 1500 54,000
Junior Teachers 5 1200 72,000
Administrative
staff
Principal 1 2500 30,000
Accountant 1 1000 12,000

68
Librarian 1 750 9,000
Secretary 1 800 9,600
Guards 3 400 14,400
Cleaner 2 350 8,400
Total 19 275,400

7.2 Training Requirement

All teachers should be trained in pedagogical science either in government or private
education institutions and be qualified in each subject given in high schools.

8. Financial Analysis
8.1 Underlying Assumption
The financial analysis of high school project is based on the data provided in the
preceding sections and the following assumptions.

69
 A. Construction and Finance

Construction period 2 years

Source of finance 40% equity and 60% loan
Tax holidays 2 years
Bank interest rate 12%
Discount for cash flow 18%
Value of land Based on lease rate of ANRS
Spare Parts, Repair & Maintenance 3% of fixed investment
B. Depreciation

Building 5%
Machinery and equipment 10%
Office furniture 10%
Vehicles 20%
Pre-production (amortization) 20%
C. Working Capital (Minimum Days of Coverage)

Raw Material-Local 30 days

Raw Material-Foreign 120 days
Factory Supplies in Stock 30 days
Spare Parts in Stock and Maintenance 30 days
Work in Progress 10 days
Finished Products 15 days
Accounts Receivable 30 days
Cash in Hand 30 days
Accounts Payable 30 days

8.2 Investment
The total investment cost of the project including working capital is estimated at Birr 2.1
million as shown in table 8 below. The Owner shall contribute 40% of the finance in the
form of equity while the remaining 60% is to be financed by bank loan.
Table 8: Total initial investment

70
 Total Initial Investment
Item Cost
Land 6,750.00
Building and civil works 1,200,000.00
Office equipment 15,000.00
Vehicles 0.00
Plant machinery & equipment 729,000.00
Total Fixed Investment 1,950,750.00
Pre production capital expenditure 97,537.50
Total Initial Investment 2,048,287.50
Working capital at full capacity 86,473.45
Total 2,134,760.95

*Pre-production capital expenditure includes - all expenses for pre-investment studies,

consultancy fee during construction and expenses for company‘s establishment, project
administration expenses, commission expenses, preproduction marketing and interest
expenses during construction.

8.3 Service Costs

The total service cost at full capacity operation is estimated at about Birr 883 thousands
(see Table 9). Wages and salaries account for 31.2%.
Table -9- Total Service Cost

Total Service Cost at full Capacity

Items Cost
1. Raw materials 0.00
2. Utilities 50,000.00
3. Wages and Salaries 275,400.00
4. Spares and Maintenance 58,522.50
Service costs 383,922.50
5. Depreciation 153,907.50
6. Financial costs
346,064.22
Total Service Cost 883,894.22

71
 8.4 Financial Evaluation

I. Profitability

According to the income statement of the project, the school project will generate profit
starting from the second year of operation.

II. Breakeven Analysis

The break even point of the project is estimated by using income statement projection.
The Project breaks-even breaks evens at 32.7% of capacity utilization.

III. Payback Period

The project will pay back fully the initial investment in the sixth year.

IV. Simple Rate of Return

The simple rate of return of the project at full capacity utilization is 20.5%.

V. Internal Rate of Return and Net Present Value

Based on the cash flow statement, the calculated IRR of the project is 17.90% and the
NPV at 18% discount rate is over Birr 1.0 million.

VI. Sensitivity Analysis

The project will absorb shocks if school fee decreases 10%.

9. Economic and Social Benefit and Justification

Based on the foregoing presentation and analysis, we can say that the proposed project
possesses wide range of benefits that complement the financial feasibility obtained

72
earlier. It will Improve the standard of education to be given to students who can attend
these schools, produce students with strong academic background and with high potential
to go to higher education. In general the envisaged project promotes the socio-economic
goals and objectives stated in the strategic plan of the Amhara National Regional State.
These benefits are listed as follows :

A. Profit Generation

The project is found to be financially viable and earns on average a profit of Birr 0.30
million per year and Birr 3.0 million within the project life. Such result induces the
project promoters to reinvest the profit which, therefore, increases the investment
magnitude in the region.

B. Tax Revenue

In the project life under consideration, the region will collect about Birr 1.2 million from
corporate tax payment alone (i.e. excluding income tax, sales tax and VAT). Such result
creates additional fund for the regional government that will be used in expanding social
and other basic services in the region.

C. Employment and Income Generation

The proposed project is expected to create employment opportunity for 19 professionals

as well as support stuff. Consequently the project creates income of Birr 275 thousand
per year. This would be one of the commendable accomplishments of the project.

D. Pro Environment Project

The proposed production process is environment friendly.

E. Diversification and InterSectoral linkage.

The proposed project helps to diversify ANRS’ and Ethiopian economy. It contributes to
industrialization of the region as well as the county’s economy.

73
ANNEXES

74
 Annex 1: Total Net Working Capital Requirements (in Birr)
CONSTRUCTION PRODUCTION
Year 1 Year 2 1 2 3 4

Capacity Utilization (%) 0.00 0.00 75% 85% 100% 0%

1. Total Inventory 0.00 0.00 1430015.96 1620684.76 1906687.95 0.00

Raw Materials in Stock- Total 0.00 0.00 355090.91 402436.36 473454.55 0.00

Raw Material-Local 0.00 0.00 355090.91 402436.36 473454.55 0.00

Raw Material-Foreign 0.00 0.00 0.00 0.00 0.00 0.00

Factory Supplies in Stock 0.00 0.00 8618.68 9767.83 11491.57 0.00

Spare Parts in Stock and Maintenance 0.00 0.00 64814.73 73456.69 86419.64 0.00

Work in Progress 0.00 0.00 215466.91 244195.84 287289.22 0.00

Finished Products 0.00 0.00 430933.83 488391.67 574578.44 0.00

2. Accounts Receivable 0.00 0.00 1963636.36 2225454.55 2618181.82 0.00

3. Cash in Hand 0.00 0.00 227511.65 257846.54 303348.87 0.00

CURRENT ASSETS 0.00 0.00 3266073.07 3701549.48 4354764.10 0.00

4. Current Liabilities 0.00 0.00 1963636.36 2225454.55 2618181.82 0.00

Accounts Payable 0.00 0.00 1963636.36 2225454.55 2618181.82 0.00

TOTAL NET WORKING CAPITAL REQUIRMENTS 0.00 0.00 1302436.71 1476094.94 1736582.28 0.00

INCREASE IN NET WORKING CAPITAL 0.00 0.00 1302436.71 173658.23 260487.34 -1736582.28

1
 Annex 1: Total Net Working Capital Requirements (in Birr) (continued)
PRODUCTION
5 6 7 8 9 10

Capacity Utilization (%) 100% 100% 100% 100% 100% 100%

1. Total Inventory 1906687.95 1906687.95 1906687.95 1906687.95 1906687.95 1906687.95

Raw Materials in Stock-Total 473454.55 473454.55 473454.55 473454.55 473454.55 473454.55

Raw Material-Local 473454.55 473454.55 473454.55 473454.55 473454.55 473454.55

Raw Material-Foreign 0.00 0.00 0.00 0.00 0.00 0.00

Factory Supplies in Stock 11491.57 11491.57 11491.57 11491.57 11491.57 11491.57

Spare Parts in Stock and Maintenance 86419.64 86419.64 86419.64 86419.64 86419.64 86419.64

Work in Progress 287289.22 287289.22 287289.22 287289.22 287289.22 287289.22

Finished Products 574578.44 574578.44 574578.44 574578.44 574578.44 574578.44

2. Accounts Receivable 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82

3. Cash in Hand 303348.87 303348.87 303348.87 303348.87 303348.87 303348.87

CURRENT ASSETS 4354764.10 4354764.10 4354764.10 4354764.10 4354764.10 4354764.10

4. Current Liabilities 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82

Accounts Payable 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82

TOTAL NET WORKING CAPITAL REQUIRMENTS 1736582.28 1736582.28 1736582.28 1736582.28 1736582.28 1736582.28

INCREASE IN NET WORKING CAPITAL 1736582.28 0.00 0.00 0.00 0.00 0.00

2
 Annex 2: Cash Flow Statement (in Birr)
CONSTRUCTION PRODUCTION
Year 1 Year 2 1 2 3 4
TOTAL CASH INFLOW 13863150.00 15599732.28 19963636.36 20661818.18 24392727.27 -2618181.82
1. Inflow Funds 13863150.00 15599732.28 1963636.36 261818.18 392727.27 -2618181.82
Total Equity 5545260.00 6239892.91 0.00 0.00 0.00 0.00
Total Long Term Loan 8317890.00 9359839.37 0.00 0.00 0.00 0.00
Total Short Term Finances 0.00 0.00 1963636.36 261818.18 392727.27 -2618181.82
2. Inflow Operation 0.00 0.00 18000000.00 20400000.00 24000000.00 0.00
Sales Revenue 0.00 0.00 18000000.00 20400000.00 24000000.00 0.00
Interest on Securities 0.00 0.00 0.00 0.00 0.00 0.00
3. Other Income 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL CASH OUTFLOW 13863150.00 13863150.00 13727821.73 11926383.93 16505664.06 286902.48
4. Increase In Fixed Assets 13863150.00 13863150.00 0.00 0.00 0.00 0.00
Fixed Investments 13203000.00 13203000.00 0.00 0.00 0.00 0.00
Pre-production Expenditures 660150.00 660150.00 0.00 0.00 0.00 0.00
5. Increase in Current Assets 0.00 0.00 3266073.07 435476.41 653214.61 -4354764.10
6. Operating Costs 0.00 0.00 5700688.04 6423291.77 7507197.38 281160.00
7. Corporate Tax Paid 0.00 0.00 0.00 0.00 3631190.90 0.00
8. Interest Paid 0.00 0.00 4761060.63 2121327.52 1767772.94 1414218.35
9. Loan Repayments 0.00 0.00 0.00 2946288.23 2946288.23 2946288.23
10. Dividends Paid 0.00 0.00 0.00 0.00 0.00 0.00
Surplus(Deficit) 0.00 1736582.28 6235814.63 8735434.25 7887063.21 -2905084.30
Cumulative Cash Balance 0.00 1736582.28 7972396.91 16707831.15 24594894.36 21689810.06

Annex 2: Cash Flow Statement (in Birr): Continued

3
 PRODUCTION
5 6 7 8 9 10
TOTAL CASH INFLOW 26618181.82 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00
1. Inflow Funds 2618181.82 0.00 0.00 0.00 0.00 0.00
Total Equity 0.00 0.00 0.00 0.00 0.00 0.00
Total Long Term Loan 0.00 0.00 0.00 0.00 0.00 0.00
Total Short Term Finances 2618181.82 0.00 0.00 0.00 0.00 0.00
2. Inflow Operation 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00
Sales Revenue 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00
Interest on Securities 0.00 0.00 0.00 0.00 0.00 0.00
3. Other Income 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL CASH OUTFLOW 19712237.12 15204202.82 14956714.60 11762938.17 11762938.17 11762938.17
4. Increase In Fixed Assets 0.00 0.00 0.00 0.00 0.00 0.00
Fixed Investments 0.00 0.00 0.00 0.00 0.00 0.00
Pre-production Expenditures 0.00 0.00 0.00 0.00 0.00 0.00
5. Increase in Current Assets 4354764.10 0.00 0.00 0.00 0.00 0.00
6. Operating Costs 7507197.38 7507197.38 7507197.38 7507197.38 7507197.38 7507197.38
7. Corporate Tax Paid 3843323.66 4043608.03 4149674.41 4255740.79 4255740.79 4255740.79
8. Interest Paid 1060663.76 707109.17 353554.59 0.00 0.00 0.00
9. Loan Repayments 2946288.23 2946288.23 2946288.23 0.00 0.00 0.00
10. Dividends Paid 0.00 0.00 0.00 0.00 0.00 0.00
Surplus(Deficit) 6905944.69 8795797.18 9043285.40 12237061.83 12237061.83 12237061.83
Cumulative Cash Balance 28595754.76 37391551.94 46434837.34 58671899.17 70908961.01 83146022.84

Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED

CONSTRUCTION PRODUCTION

4
 Year 1 Year 2 1 2 3 4
TOTAL CASH INFLOW 0.00 0.00 18000000.00 20400000.00 24000000.00 0.00

1. Inflow Operation 0.00 0.00 18000000.00 20400000.00 24000000.00 0.00

Sales Revenue 0.00 0.00 18000000.00 20400000.00 24000000.00 0.00

Interest on Securities 0.00 0.00 0.00 0.00 0.00 0.00

2. Other Income 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL CASH OUTFLOW 13863150.00 13863150.00 7003124.74 6596950.00 11398875.63 -1455422.28

3. Increase in Fixed Assets 13863150.00 13863150.00 0.00 0.00 0.00 0.00

Fixed Investments 13203000.00 13203000.00 0.00 0.00 0.00 0.00

Pre-production Expenditures 660150.00 660150.00 0.00 0.00 0.00 0.00

4. Increase in Net Working Capital 0.00 0.00 1302436.71 173658.23 260487.34 -1736582.28

5. Operating Costs 0.00 0.00 5700688.04 6423291.77 7507197.38 281160.00

6. Corporate Tax Paid 0.00 0.00 0.00 0.00 3631190.90 0.00

- -
NET CASH FLOW 13863150.00 13863150.00 10996875.26 13803050.00 12601124.37 1455422.28
- - -
CUMMULATIVE NET CASH FLOW 13863150.00 27726300.00 16729424.74 -2926374.74 9674749.63 11130171.91
- -
Net Present Value (at 18%) 13863150.00 11748432.20 7897784.59 8400962.37 6499519.77 636178.49
- - -
Cumulative Net present Value 13863150.00 25611582.20 17713797.62 -9312835.25 -2813315.49 -2177136.99

Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED (Continued)

PRODUCTION
5 6 7 8 9 10
TOTAL CASH INFLOW 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00

5
1. Inflow Operation 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00

Sales Revenue 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00

Interest on Securities 0.00 0.00 0.00 0.00 0.00 0.00

2. Other Income 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL CASH OUTFLOW 13087103.32 11550805.41 11656871.79 11762938.17 11762938.17 11762938.17

3. Increase in Fixed Assets 0.00 0.00 0.00 0.00 0.00 0.00

Fixed Investments 0.00 0.00 0.00 0.00 0.00 0.00

Pre-production Expenditures 0.00 0.00 0.00 0.00 0.00 0.00

4. Increase in Net Working Capital 1736582.28 0.00 0.00 0.00 0.00 0.00

5. Operating Costs 7507197.38 7507197.38 7507197.38 7507197.38 7507197.38 7507197.38

6. Corporate Tax Paid 3843323.66 4043608.03 4149674.41 4255740.79 4255740.79 4255740.79

NET CASH FLOW 10912896.68 12449194.59 12343128.21 12237061.83 12237061.83 12237061.83

CUMMULATIVE NET CASH FLOW 22043068.59 34492263.18 46835391.39 59072453.22 71309515.06 83546576.89

Net Present Value (at 18%) 4042481.12 3908113.82 3283743.16 2758919.88 2338067.70 1981413.30

Cumulative Net present Value 1865344.12 5773457.95 9057201.11 11816120.99 14154188.69 16135601.99

Net Present Value (at 18%) 16,135,601.99

Internal Rate of Return 32.0%

Annex 4: NET INCOME STATEMENT ( in Birr)

PRODUCTION
1 2 3 4 5

6
 Capacity Utilization (%) 75% 85% 100% 0% 100%

1. Total Income 18000000.00 20400000.00 24000000.00 0.00 24000000.00

Sales Revenue 18000000.00 20400000.00 24000000.00 0.00 24000000.00
Other Income 0.00 0.00 0.00 0.00 0.00
2. Less Variable Cost 5029432.04 5700022.97 6705909.38 0.00 6705909.38
VARIABLE MARGIN 12970567.97 14699977.03 17294090.62 0.00 17294090.62
(In % of Total Income) 72.06 72.06 72.06 #DIV/0! 72.06
3. Less Fixed Costs 3292316.00 3344328.80 3422348.00 2902220.00 3422348.00
OPERATIONAL MARGIN 9678251.97 11355648.23 13871742.62 -2902220.00 13871742.62
(In % of Total Income) 54 56 58 #DIV/0! 58
4. Less Cost of Finance 4761060.63 2121327.52 1767772.94 1414218.35 1060663.76
5. GROSS PROFIT 4917191.34 9234320.70 12103969.68 -4316438.35 12811078.86
6. Income (Corporate) Tax 0.00 0.00 3631190.90 0.00 3843323.66
7. NET PROFIT 4917191.34 9234320.70 8472778.78 -4316438.35 8967755.20
RATIOS (%)
Gross Profit/Sales 27% 45% 50% #DIV/0! 53%
Net Profit After Tax/Sales 27% 45% 35% #DIV/0! 37%
Return on Investment 33% 39% 35% -10% 34%
Return on Equity 42% 78% 72% -37% 76%
Annex 4: NET INCOME STATEMENT (in Birr):Continued
PRODUCTION
6 7 8 9 10

7
 Capacity Utilization (%) 100% 100% 100% 100% 100%

1. Total Income 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00

Sales Revenue 24000000.00 24000000.00 24000000.00 24000000.00 24000000.00
Other Income 0.00 0.00 0.00 0.00 0.00
2. Less Variable Cost 6705909.38 6705909.38 6705909.38 6705909.38 6705909.38
VARIABLE MARGIN 17294090.62 17294090.62 17294090.62 17294090.62 17294090.62
(In % of Total Income) 72 72 72 72 72
3. Less Fixed Costs 3108288.00 3108288.00 3108288.00 3108288.00 3108288.00
OPERATIONAL MARGIN 14185802.62 14185802.62 14185802.62 14185802.62 14185802.62
(In % of Total Income) 59 59 59 59 59
4. Less Cost of Finance 707109.17 353554.59 0.00 0.00 0.00
5. GROSS PROFIT 13478693.45 13832248.03 14185802.62 14185802.62 14185802.62
6. Income (Corporate) Tax 4043608.03 4149674.41 4255740.79 4255740.79 4255740.79
7. NET PROFIT 9435085.41 9682573.62 9930061.83 9930061.83 9930061.83
RATIOS (%)
Gross Profit/Sales 56% 58% 59% 59% 59%
Net Profit After Tax/Sales 39% 40% 41% 41% 41%
Return on Investment 34% 34% 34% 34% 34%
Return on Equity 80% 82% 84% 84% 84%
Annex 5: Projected Balance Sheet (in Birr)
CONSTRUCTION PRODUCTION
Year 1 Year 2 1 2 3 4
TOTAL ASSETS 13863150.00 29462882.28 36343709.98 42893560.64 48812778.46 43248308.41

8
1. Total Current Assets 0.00 1736582.28 11238469.98 20409380.64 28949658.46 21689810.06
Inventory on Materials and Supplies 0.00 0.00 428524.31 485660.89 571365.75 0.00
Work in Progress 0.00 0.00 215466.91 244195.84 287289.22 0.00
Finished Products in Stock 0.00 0.00 430933.83 488391.67 574578.44 0.00
Accounts Receivable 0.00 0.00 1963636.36 2225454.55 2618181.82 0.00
Cash in Hand 0.00 0.00 227511.65 257846.54 303348.87 0.00
Cash Surplus, Finance Available 0.00 1736582.28 7972396.91 16707831.15 24594894.36 21689810.06
Securities 0.00 0.00 0.00 0.00 0.00 0.00
2. Total Fixed Assets, Net of Depreciation 13863150.00 27726300.00 25105240.00 22484180.00 19863120.00 17242060.00
Fixed Investment 0.00 13203000.00 26406000.00 26406000.00 26406000.00 26406000.00
Construction in Progress 13203000.00 13203000.00 0.00 0.00 0.00 0.00
Pre-Production Expenditure 660150.00 1320300.00 1320300.00 1320300.00 1320300.00 1320300.00
Less Accumulated Depreciation 0.00 0.00 2621060.00 5242120.00 7863180.00 10484240.00
3. Accumulated Losses Brought Forward 0.00 0.00 0.00 0.00 0.00 0.00
4. Loss in Current Year 0.00 0.00 0.00 0.00 0.00 4316438.35
TOTAL LIABILITIES 13863150.00 29462882.28 36343709.98 42893560.64 48812778.46 43248308.41
5. Total Current Liabilities 0.00 0.00 1963636.36 2225454.55 2618181.82 0.00
Accounts Payable 0.00 0.00 1963636.36 2225454.55 2618181.82 0.00
Bank Overdraft 0.00 0.00 0.00 0.00 0.00 0.00
6. Total Long-term Debt 8317890.00 17677729.37 17677729.37 14731441.14 11785152.91 8838864.68
Loan A 8317890.00 17677729.37 17677729.37 14731441.14 11785152.91 8838864.68
Loan B 0.00 0.00 0.00 0.00 0.00 0.00
7. Total Equity Capital 5545260.00 11785152.91 11785152.91 11785152.91 11785152.91 11785152.91
Ordinary Capital 5545260.00 11785152.91 11785152.91 11785152.91 11785152.91 11785152.91
Preference Capital 0.00 0.00 0.00 0.00 0.00 0.00
Subsidies 0.00 0.00 0.00 0.00 0.00 0.00
8. Reserves, Retained Profits Brought Forward 0.00 0.00 0.00 4917191.34 14151512.04 22624290.82
9. Net Profit After Tax 0.00 0.00 4917191.34 9234320.70 8472778.78 0.00
Dividends Payable 0.00 0.00 0.00 0.00 0.00 0.00
Retained Profits 0.00 0.00 4917191.34 9234320.70 8472778.78 0.00
Annex 5: Projected Balance Sheet (in Birr): Continued
PRODUCTION
5 6 7 8 9 10
TOTAL ASSETS 47571518.86 54060316.04 60796601.43 70726663.27 80656725.10 90586786.94
1. Total Current Assets 32950518.86 41746316.04 50789601.43 63026663.27 75263725.10 87500786.94

9
 Inventory on Materials and Supplies 571365.75 571365.75 571365.75 571365.75 571365.75 571365.75
Work in Progress 287289.22 287289.22 287289.22 287289.22 287289.22 287289.22
Finished Products in Stock 574578.44 574578.44 574578.44 574578.44 574578.44 574578.44
Accounts Receivable 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82
Cash in Hand 303348.87 303348.87 303348.87 303348.87 303348.87 303348.87
Cash Surplus, Finance Available 28595754.76 37391551.94 46434837.34 58671899.17 70908961.01 83146022.84
Securities 0.00 0.00 0.00 0.00 0.00 0.00
2. Total Fixed Assets, Net of Depreciation 14621000.00 12314000.00 10007000.00 7700000.00 5393000.00 3086000.00
Fixed Investment 26406000.00 26406000.00 26406000.00 26406000.00 26406000.00 26406000.00
Construction in Progress 0.00 0.00 0.00 0.00 0.00 0.00
Pre-Production Expenditure 1320300.00 1320300.00 1320300.00 1320300.00 1320300.00 1320300.00
Less Accumulated Depreciation 13105300.00 15412300.00 17719300.00 20026300.00 22333300.00 24640300.00
3. Accumulated Losses Brought Forward 0.00 0.00 0.00 0.00 0.00 0.00
4. Loss in Current Year 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL LIABILITIES 47571518.86 54060316.04 60796601.43 70726663.27 80656725.10 90586786.94
5. Total Current Liabilities 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82
Accounts Payable 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82 2618181.82
Bank Overdraft 0.00 0.00 0.00 0.00 0.00 0.00
6. Total Long-term Debt 5892576.46 2946288.23 0.00 0.00 0.00 0.00
Loan A 5892576.46 2946288.23 0.00 0.00 0.00 0.00
Loan B 0.00 0.00 0.00 0.00 0.00 0.00
7. Total Equity Capital 11785152.91 11785152.91 11785152.91 11785152.91 11785152.91 11785152.91
Ordinary Capital 11785152.91 11785152.91 11785152.91 11785152.91 11785152.91 11785152.91
Preference Capital 0.00 0.00 0.00 0.00 0.00 0.00
Subsidies 0.00 0.00 0.00 0.00 0.00 0.00
8. Reserves, Retained Profits Brought Forward 18307852.47 27275607.67 36710693.08 46393266.71 56323328.54 66253390.37
9. Net Profit After Tax 8967755.20 9435085.41 9682573.62 9930061.83 9930061.83 9930061.83
Dividends Payable 0.00 0.00 0.00 0.00 0.00 0.00
Retained Profits 8967755.20 9435085.41 9682573.62 9930061.83 9930061.83 9930061.83

10