[ad_1]
Senior officials in Ethiopia’s Ministry of Mines and Petroleum say the government is ready to terminate a deal with a self-described US-based energy company after a Quartz Africa investigation revealed that the company had no experience or technical credentials in the oil industry.
“We are in the process of canceling our agreement with the company,” says Dr. Koang Tutlam, Ethiopia’s Minister of State for Oil and Natural Gas, in a statement sent to Quartz Africa.
GreenComm Technologies, a Virginia-based company run by a former Ethiopian-American car dealership employee, Nebiyu Getachew, was poised to oversee the construction of a $ 3.6 billion oil refinery in Ethiopia’s Somali region, after entering into an agreement with the Ethiopian government in April. 28.
That deal came after at least two years of talks between the entity and the Ethiopian government that included a review of the company’s profile by prominent members of the ministry and an Ethiopian state oil company.
“GreenComm wanted the Ethiopian government to present a $ 100 million letter of credit because it was seeking to obtain billions from the lenders. But we refuse to give in. “
But the investigation revealed that the company had made misleading statements about its capabilities and connections as part of an elaborate scheme. He presented himself as an industry leader despite never having completed an oil-related project anywhere and despite the company being excluded from the Virginia state corporate database when he signed the agreement on 28th of April.
After the story of Quartz Africa was published, a local social media The user drove to the company’s listed address in Virginia and found an empty office space, with no sign of an extraction company in the area.
Many ordinary Ethiopians at home and in the diaspora were concerned that GreenComm had managed to get through the Ethiopian government’s vetting process despite multiple red flags.
When asked about the deal earlier this year, Ethiopian Mines Minister Takele Uma told Quartz Africa that he was unaware of GreenComm and said he “had no idea.” His predecessor, Samuel Urkato, who has since become Ethiopia’s Minister of Science and Higher Education, acknowledged the existence of the agreement when contacted by phone, but refused to speak further, hung up and ended the call with Quartz Africa.
However, with the disclosures made public, ministry representatives have been much more open to answering questions from the press on the matter. According to Dr. Koang Tutlam, whose office is under Minister Takele Uma, there has been resistance to allowing GreenComm to operate from within the ministry.
“Although the project called GreenComm Technologies preceded most of us in ministry, some of us were skeptical about its authenticity from the beginning,” Dr. Koang tells Quartz Africa. “As such, some of us work hard to prevent [government] entering into a commitment that would cost the country ”.
Koang says the parties agreed to begin a one-year feasibility study period, before any construction began. Executives at GreenComm, he says, were keen to make a breakthrough before turning in any work.
“First, the company wanted the Ethiopian government to present a $ 100 million reserve letter of credit, which we learned was because they were seeking to obtain billions from the lenders. But we refuse to give in, despite immense pressure from some heavy sectors. “
Dr. Koang declined to clarify who he meant by “heavy rooms.” However, another official, Mulugeta Damtew Seid, head of the state agency Ethiopian Mineral, Petroleum and Biofuel Corporation (EMPB), said that officials from the Quartz Africa company had brought the matter up to the Ministry of Foreign Affairs and even to the office of the Prime Minister. Mulugeta also identified Prime Minister Abiy’s former chief of staff and current Ethiopian ambassador to the United States, Fitsum Arega, for lobbying on behalf of GreenComm.
GreenComm Technologies Screenshot
Although Fitsum Arega has not previously responded to inquiries from Quartz Africa, in a series of social media posts in response to the story, the ambassador did not confirm or deny its proximity to GreenComm Technologies, but stated that no contacts had been reached. agreement to allocate the company with funds. Instead, he said, the agreement was solely to assess the project’s viability.
“As this study is a private sector foreign direct investment initiative,” wrote Ambassador Fitsum, “the federal or regional government of Ethiopia does not commit or promise financial resources for its implementation.”
However, local media reports and company statements suggest that the deal went beyond a study agreement and that it had actually covered the construction of the refinery. Reports indicated that the American company had contracted with Korean construction giant Hyundai Engineering and Construction to help with its implementation. Hyundai later clarified that this was false and that it had rejected an offer to collaborate with GreenComm Technologies after establishing that the company had no active operations.
But Dr. Koang told Quartz Africa that after growing concerns, GreenComm included a clause in its April 28 agreement, which required the company to post a performance bond of $ 5 million as insurance. Something, he says, the company couldn’t do.
“We are canceling the deal, but we are also taking legal action against the company for failing to release the performance bond,” explained Dr. Koang. “Rest assured, Ethiopia has not lost a penny and was not willing to lose anything.”
Greencomm Technologies first presented the oil refinery project to the Ethiopian government in 2018, as part of a joint effort with the Texas-based Innovative Clear Choice Technologies (ICCT), which also had no credentials and was dissolved in February. 2020.
Dr. Koang Tutlam was part of the team of officials that studied the joint speech in 2018. Two years later, suddenly, the existence of ICCT was no longer mentioned, but this did not hamper the remaining company’s ability to reach an agreement. . .
Sign up here to get African business, technology and innovation news and analysis delivered to your inbox.
[ad_2]
