በዋሸራ ኢትዮጵያ ትሬዲንግ ኃ/የተ/የግ/ማህበር

ዋሸራ ሪል ስቴት
PROJECT PROPOSAL ON THE ESTABLISHMENT OF
REAL ESTATE DEVELOPMENT
(BUILDING MODERN APARTMENTS &
VILLAS)

PROJECT ADRESS- BAHIR DAR

SUBMITTED TO: BAHIRDAR CITY ADMINSTRATION,

OWNER- WASHERA REAL ESTATE AND

APARTMENT PVT.LTD.CO
CONTACT PERSON- Mr., KIDUS YOHANNES (GENERAL
MANAGER)

TELEPHONE NO- 09-18-34-17-33

ዋሸራ ኢትዮጵያ ትሬዲንግ ኃ/የተ/የግ/ማ 0918 341733

 TABLE OF CONTENTS
TITLE PAGE

EXECUTIVE SUMMARY.....................................................................................2
1. Product Description and Application..........................................................3
2. Market Study, Plant Capacity and Production Program..........................5
3.1 Market Study..................................................................................................................5
3.1.1 Present Demand and Supply................................................................................5
3.1.2 Projected Demand...................................................................................................7
3.1.3 Pricing and Distribution........................................................................................7
3.2 Plant Capacity.................................................................................................................7
3.3 Construction Program...................................................................................................8
3. Raw Materials and Utilities...........................................................................8
4.1 Availability and Source of Raw materials..................................................................8
4.2 Material al Requirement and Cost...............................................................................8
5 Location and Site.............................................................................................9
6 Technology and Engineering........................................................................9
6.1 Construction Process.....................................................................................................9
6.2 Machinery and Equipment.........................................................................................10
6.3 Civil Engineering Cost................................................................................................11
7 Human Resource and Training Requirement..........................................16
7.1 Human Resource..........................................................................................................16
7.2 Training Requirement.................................................................................................18
8 Financial Analysis.........................................................................................18
8.1 Underlying Assumption.............................................................................................18
8.2 Investment.....................................................................................................................19
8.3 Financial evaluation.....................................................................................................20
9 Economic and Social Benefit and Justification........................................22
ANNEXES.............................................................................................................24

1
 SUMMARY OF THE PROJECT

This project proposal deals with real estate development for 3840 modern
houses with different sizes for sale and for the assistance of low income
level dwellers of kebelie 5 and 6 usually known as ኮሸኮሽ ሰፈር of Bahirdar,
by which more than 45 thousand dwellers are inhabited in it and its
around.
The following presents the main findings of the study-
Demand projection divulges that the domestic demand for home is
substantial and increasing with time. Accordingly, the planned plant is set
to construct 3840 residential, commercial and multipurpose towers.
The initial investment cost of the project is birr 100 million from the total
investment cost 30% will be from the owner’s equity and the remaining 70% will
be covered from bank loan. Out of all, the construction cost accounts 81% the total
investment.

The project creates job opportunities for an increasing number of more than
500 permanent and 344 casual employees. Totally 844 job opportunities

with annual salary birr 10.12 million.

Out of all homes of the this proposed project -

 10% (384 homes) of the constructed homes will be transferred for
free for kebelie 5 and 6 dwellers. Conventionally known ኮሸኮሽ
neighborhood as a social responsibility and duty of our firm.
 60% of the constructed homes will be sold and transferred for those
who need home, this market targets include Diasporas who come to

2
 their home country and this helps the country for the gain of hard
currency from abroad.
 The remaining 30% of the required land of the proposed project will
be left for open spaces, green areas, constructions of different
infrastructures and utility lines.
 From the total buildings of 70 %, 25% of which will be covered by
real estate and apartment. And 75% of it will comprise villa and G+4
types of homes. And the total span of the project will take 10 years.

The project will request and be established on a total area of 20 hectare

(200,000 m2) of land. Of which 30% of the total area will be left for
infrastructure facilities and green area development and the percentage
depends on the city’s plan regulations.
The financial result indicates that although the project will generate profit
beginning from the first year of operation the IRR and NPV are not as such
attractive enough to promote the project. That is, the result shows that the
calculated IRR of the project is 19.2% and NPV discounted at 18% of Birr
15.7 million. In addition to this, the project will pays back fully the initial
investment in 5 years time.

MISSION of the project

 Improvement and expansion of construction industries in the city.
 Reduces and crates balance of the shortage of living homes.
 Increases the aesthetic value of Bahirdar.
 Creates suitable and comfortable environment for the people of the city.

3
  Crates an opportunity for low income level dwellers of the city to be the
owners of home.
 Helps to create job opportunity and
 Helps for the transitions of technology.

SIGNIFICANCE of the project

The proposed Washera real estate project significant for---
 The Amhara National Regional Rtate.
 The city administration of Bahirdar.
 Low level income livelihood of kebelie 05 and 06 of Bahirdar city, and
 For the developers (WASHERA REAL STATE plc)
[

1. Product Description and Application

Housing is one of the basic human requirements, as every family needs a

roof. Providing shelter to every family has become a major issue as a result
of rapid urbanization and higher population growth. On the other hand,
the provision of house has not kept pace with the above phenomenon and
resulted in the deterioration of living condition, increased health hazarded
and rapid growth of squatter settlements. The improvement of such
phenomenon and provision of affordable housing will not only help
alleviate the urban and rural poverty but also increase the productivity of
the population through improved public health. At present the
government is committed to give priority to housing sector and has
demonstrated its commitment by allocating significant resources for its
development, which would contribute to the economy in the form of
additional employment. The multiple effects of the housing and

4
construction sector have the potential to create maximum employment
opportunities besides generating industrial, commerce and trade activities.

2. Market Study, Plant Capacity and Production Program

3.1Market Study

3.1.1 Present Demand and Supply

Housing plays a significant role in the economic growth of our country.

Moreover, it is a source of jobs and capital investment as well as an
essential contributor to personal happiness. Nonetheless, there is severe
housing problem in the country where the region of Amhara is not an
exception.

As the Housing and Population Census conducted in June 2017 has not yet
publicized, there is no exact and recent figure that details the number and
condition of residential houses in the Amhara National Regional State. As a
result, the extent of housing problem in the respective zonal and woreda
capitals could not be concretely established. But this does not conceal the
present housing shortage that exists in the region.

It is true that after the decentralization of the country’s government and

administrative apparatus, many offices, agencies and other institutions are
established at the regional zonal, woreda and kebele level. Consequently,
thousands of employees have been deployed in these new regional
government offices. In addition, due to the increase and expansion of
schools and health posts, additional teachers and health personnel are

5
assigned in different localities of the Region. Besides, due to expansion of
urban economic activities such as trade and commerce, woreda and zonal
towns and other urban centers have expanded thereby increasing their
population. At the same time a number of aid and development agencies
do have their branch offices in many rural towns of the region. In general
the fact that a number of regional government and non government
employees has increased in all urban centers while there is a general
increase in urban population throughout the Amhara region, put a
tremendous pressure in the housing problem. As a result, it created
extreme shortage of houses in every urban center of the Region, especially
at Bahir Dar. This is one of the most difficult problems facing employees of
various offices (governmental and nongovernmental) operating in the
region.
Due to the shortage of houses, the employees are forced to live in sub-
standard houses. This in turn has created a discouraging factor for people
to work at the zonal and woreda level. As a result some employees are
even forced to stay in hotels throughout the year indicating the degree of
the problem. All this suggest the presence of huge demand for construction
of homes. One possible solution for this major problem is to encourage
investors to build low cost houses for people working in zonal and woreda
capital.

6
 3.1.2 Projected Demand

In order to quantitatively forecast the future housing demand in the

respective urban centers of the region, data regarding the current number
of houses and their physical condition should be known. Otherwise, it is
impossible to project the annual additional housing requirement. However,
as explained in the previous section, the housing census conducted in mid
2017 is not published yet and hence, it is impossible to put numbers and
project the future demand. Nonetheless, it is evident that there is huge
demand for housing so that the houses that are proposed in this project
will be occupied by individuals and families in the capital of the region,
Bahir Dar.

3.1.3 Pricing and Distribution

The price of homes will be determined based on their difference in size,

quality, and design. For one small sized villa home the price will be birr 1,
250,000. It is the minimum possible price that makes the envisaged project
feasible. Out of all 70% of homes of the proposed project will be sold and
transferred for those who need homes including Diasporas who come to
their home country and this helps the country for the gain of hard currency
from abroad.

3.2 Plant Capacity

Given the expected demand for residential houses as presented earlier, the
planned technology and capacity, the envisaged plant is set to construct

3840 homes.(both residential and commercial) which totally serves for11,520

7
livelihoods of the city, Each home shall have its own bed rooms, living
room, kitchen and toilet and their number depends on the size of each
home.

3.3 Construction Program

The construction of the envisaged project will be fully completed within 10

years. This includes excavation and earth work as well as erecting the
building (i.e., concrete and masonry works). Once the homes are build it is
assumed that all of them will be sold to the residents. In other words, it is
assumed that the proposed plant will operate at 100 percent capacity
starting from the first year of operation.

3. Raw Materials and Utilities

4.1 Availability and Source of Raw materials

The major raw materials in constructing the homes are sand, cement,
concrete, iron products, marble, granite, ceramics, HCB, steel, toilet fittings,
sewerage and water pipes, crushed stone, lighting accessories, PVC pipes,
wires and cables, steel and wooden door and windows, paints, glass and
mirror, roof tiles and corrugated iron sheet. While the envisaged plant
produces its own HCB, other materials such as crushed stone and sand will
be purchased from sources available in the different parts of the region
while some materials like iron and mirror will be imported or will be
purchased from local importers.

8
 5 Location of the Site

The newly emerging WASHERA REAL ESTATE PVT selects and suggests
its appropriate location for the proposed project in view of the availability
of non occupied land and opportunity of market is at the capital of the
region Bahir Dar city; specifically our firm suggests 3 places to plant our
real estate firm within the city.
1. The place around kebelie 5 and 6 by itself, which is very significant
for those people living in it now. Since it keeps the long year social
bond and communications of the community.
2. Our second choice is on the way of around air port. And,
3. The third choice at kebelie 08 a place found besides the residence
of Bahirdar university staffs and around the Amhara leadership
Academy. This project will be implemented on 20 hectare (200,000
m2) of land at the specified place.

6 . Technology and Engineering

6.1 Construction Process

The process includes the following steps.

 Procurement of Land
 Architecture Design
 Materials Procurement
 Erection of Foundations
 Construction of Structure
 Installation of Electrical Wire Pipes
 Construction of roof.
 Plaster of cement

9
  Sewerage and water pipe installation
 Construction of floors and bathrooms
 Finishing works
 Paints and electrification

6.2 Machinery and Equipment

The machineries and equipment required for constructing homes is

detailed in table 1 below

Table 1: Machinery and Equipment

Machinery and Equipment Quantity

Modern vehicle Mixer 25
Excavator 12
Loader 2
Vibrator
100
Wheel Barrow
25
HCB making equipment As required
Various Hand Tools As required
Miscellaneous Equipments As required

To minimize the investment cost, the envisaged plant shall obtain the
above stated machineries and equipments on rent basis. The cost of the rent
is included in the construction cost.

10
 6.3 Civil Engineering Cost
The total site area for the construction of 3840 modern homes is estimated
to be 20 hectare (200,000 m2) of which 30% of the total area will be for
infrastructure facilities and green area development which are gardens and
trees. The homes will be constructed on rest 75% of the total area of land.
The size of home or villa shall have 300 m 2 and 500 m2 total areas of which
the home will be erected in 180 m2 and 290 m2 area respectively.
The following table details the estimate of the construction cost.
Table 2: Summery of Cost Estimate for One Home

Item A / SUB STRUCTURE Cost (000)

1 Excavation and earth work. 2162.91
2 Concrete work. 4737.858
3 Masonry work. 4972.5
Sub Total A 11873.27
Item B / SUPER STRUCTURE
1 Concrete work. 24213.652
2 Block work. 18594.775
3 Roofing work. 105389
4 Carpentry & Joinery 3230
5 Metal work. 55713.5
6 Finishing. 54543.284
7 Glazing. 1402.5
8 Painting. 1615.068
9 Sanitary installation 2000
10 Electrical installation 3000
Sub Total B 39701.78
Total A+B 551,575.05

According to table 2 the total construction cost for one house is estimated
to be Birr 551,575.05. This cost includes all costs associated to construction.
The detail brake down is presented in the following table

11
Table 3: Detailed Quantity and Cost Estimate for One House
DESCRIPTION UNIT QTY U.RATE AMOUNT
A. SUB STRUCTURE
1. EXCAVATION & EARTH WORK
1.1 Clear the site to remove the top soil to a
depth not exceeding 200mm. m3 10.00 2.98 29.75
1.2 Trench excavation in ordinary soil
starting from stripped ground level to a
depth not exceeding 1000mm, including
working space allowance of 200 mm on both
sides. m3 18.20 15.30 278.46
1.3 Back fill around masonry foundation wall
in borrow selected non expansive material
well rammed and compacted in layers not
exceeding 200mm. m3 5.20 51.00 265.20
1.4 15cm thick Back fill under hard core in
borrow selected non expansive material well
rammed and compacted in layers not
exceeding 200mm. m3 4.50 51.00 229.50
1.5 Cart away surplus excavated material and
deposit at a distance not exceeding 1 km
away from site. m3 23.00 25.50 586.50
1.6 25cm thick trachytic or equivalent hardcore
well rolled, consolidated and blinded with
crushed stone. m2 26.00 29.75 773.50
2162.91

TOTAL CARRIED TO SUMMARY

2.CONCRETE WORK

2.1 50mm thick lean concrete in C-5 with

minimum cement content of 150kg/m3 under
Masonry foundation wall.. m2 1.30 21.25 27.63
Reinforced concrete class in C-20 with
minimum cement content of 320 kg/m3 cast
in to formwork & vibrated around
reinforcement bars. Formwork &
reinforcement bars are measured separately.
2.2 In grade beam. m3 1.14 850.00 972.40

12
 Reinforced concrete class in C-20 with
minimum cement content of 320 kg/m3 cast
in to formwork & vibrated around
reinforcement bars. Formwork &
reinforcement bars are measured separately.
2.3 In 100mm thick ground slab. m2 25.60 76.50 1958.40
Supply, cut and fix in position Zigba wood
or equivalent formwork.
2.4 To grade beam. m2 10.40 63.75 663.00
Steel reinforcement according to structural
drawings price shall include
cutting ,bending , placing in position and
tying wires.
2.5 Diameter 8mm deformed bar. kg 36.87 11.05 407.38
2.6 Diameter 10mm deformed bar. kg 64.17 11.05 709.06
TOTAL CARRIED TO SUMMARY 4737.86
3. STONE MASONRY UNIT QTY U.RATE AMOUNT
3.1 50 cm thick trachytic or equivalent stone
masonry foundation wall below ground level
bedded in cement mortar 1:3 in full joints. m3 13.00 382.50 4972.50
TOTAL CARRIED TO SUMMARY 4972.50
B. SUPER STRUCTURE
1. CONCRETE WORK
Reinforced concrete class in C-20 with
minimum cement content of 300 kg/m3 cast
in to formwork & vibrated around
reinforcement bars. Formwork &
reinforcement bars are measured separately.
1.1 In elevation column. m3 0.86 850.00 734.40
1.2 In Top tie beam. m3 1.08 850.00 918.00
Provide, cut and fix in position zigba wood
form work.
1.3 To elevation column. m2 1.28 63.75 81.60
1.4 To Tie beam. m2 2.16 63.75 137.70
Steel reinforcement according to structural
drawings. price shall include
cutting ,bending , placing in position and
tying wires
1.5 Diameter 8mm deformed bar. kg 73.73 11.05 814.75
1.6 Diameter 10mm deformed bar. kg 138.21 11.05 1527.20

13
 TOTAL CARRIED TO SUMMARY 4213.65
2. BLOCK WORK
2.1 200mm thick H.C.B. wall bedded in cement
mortar 1:3. both sides left for plastering. m2 70.20 80.75 5668.65
2.2 150mm thick H.C.B. wall bedded in cement
mortar 1:3. both sides left for plastering. m2 40.50 72.25 2926.13
TOTAL CARRIED TO SUMMARY 8594.78
3. ROOFING
3.1 Supply and fix galvanized G-28 CIS roof
covering over (5x7)cm zigba purlin placed
c/c 90cm and10cm eucalyptus trusses
placed at 133cm. Braced with 8cm
eucalyptus vertical and diagonal members .
Roof cover measured in horizontal
projection. Price shall include all trusses,
flushing, valley gutters & other accessories. m2 40.00 123.25 4930.00
3.2 110mm P.V.C down pipe attached to
external wall surface with leader straps
c/c120cm. ml 12.00 38.25 459.00
TOTAL CARRIED TO SUMMARY 5389.00
4. CARPENTRY & JOINERY UNIT QTY U.RATE AMOUNT
4.1 8mm thick chip wood ceiling nailed on and
including (40 x 50 )mm zigba ceiling joists
spaced at a maximum distance of 600mm.
both ways. The corner shall be covered
with 50mm wide shaped hard wood corner
list. m2 40.00 80.75 3230.00
TOTAL CARRIED TO SUMMARY 3230.00
5. METAL WORK

All metal doors and windows shall be fabricated from

Aluminum imitation made of 3mm thick black metal
sheet with the necessary iron mongery, accessories ,
one coat of anti-rust and two coats of oil paint and the
locks for doors shall be cylindrical ASSA type or
equivalent.
DOOR
5.1 Size (80 x 220)cm pcs 2 858.00 1716.00
5.2 Size ( 70 x 220)cm pcs 1 750.75 750.75
5.3 Size ( 90 x 220)cm pcs 1 965.25 965.25
Window
5.4 Size (140x 130)cm pcs 1 887.25 887.25

14
5.5 Size ( 90x 130)cm pcs 1 570.38 570.38
5.6 Size ( 130x 130)cm pcs 1 823.88 823.88
TOTAL CARRIED TO SUMMARY 5713.50
6 .FINISHING
Plastering
6.1 Apply three coats of plaster in cement
mortar (1:3) up to fine finishing to HCB
wall surfaces. m2 70.20 27.20 1909.44
6.2 Ditto as item 6.1 but to R.C column
surfaces. m2 4.32 27.20 117.50
6.3 Ditto as item 6.1 but to tie beam surfaces. m2 7.20 27.20 195.84
6.4 Ditto as item 6.1but apply two coats to
internal wall to receive wall tiles. m2 54.00 27.20 1468.80
Cladding
6.5 Supply & clad 6mm thick and ( 300x300)
mm ceramic wall tile to plastered internal
wall surfaces bedded on and including
cement mortar 1:3 backing & white cement
grouting. m2 0.00 200.00 0.00
Flooring
6.6 (20X20X2)cm Terrazzo floor tiles of
approved type bedded on cement mortar
(1:3). price shall include 30mm thick mortar
bed and cement grouting m2 0.00 147.00 0.00
Skirting, Silling & Copping.
6.7 2cm thick & 10cm high wood skirting stuck
down with cement mortar 1:3 on to prepared
wall surface. Price shall include mortar
backing. ml 20.00 12.75 255.00
6.80 (30x300)mm approved type Marble window
sill bedded on to wall & including cement
sand mortar bedding 1:3. ml 3.60 165.75 596.70
TOTAL CARRIED TO SUMMARY 4543.28
7. GLAZING UNIT QTY U.RATE AMOUNT
7.1 Supply & fix 4mm thick clear glass to
metal doors & windows including putty. m2 11.00 127.50 1402.50
TOTAL CARRIED TO SUMMARY 1402.50
8.PAINTING.
8.1 Apply three coats of approved type plastic
emulsion paint to all plastered wall
surfaces. m2 124.20 11.90 1477.98

15
8.2 Ditto as item No 8.1 but to plastered
Column surfaces. m2 4.32 11.90 51.41
8.3 Ditto as item 8.1 but to plastered R.C beam
surfaces. m2 7.20 11.90 85.68
8.4 Ditto as item 8.1 to chip wood ceiling
surfaces. m2 0.00 11.90 0.00
TOTAL CARRIED TO SUMMARY 1615.07

7 Human Resource and Training Requirement

7.1 Human Resource

The construction of the homes requires a number of skilled semi-skilled
and daily laborers. This includes civil engineer, foreman, electrician,
operators and daily laborers. They shall remain employed until the
construction is completed. However, the duration of employment in most
cases is on piece rate and hence will depend on the type of job and the time
it takes. In general, the cost of these personnel shall form part of the initial
investment cost. The project creates job opportunities for 500 permanent
employees and 344 casual employees totally 844 job opportunities with
annual salary birr 10.12 million which is detailed on table 3.

Table 3
Human Resources Requirement

Position No Monthly Annual Salary

Salary
Permanent employees

16
General Manager 1 12,000.00
144,000.00
Technical Managers 3 18,000.00
216,000.00
Cashier 3 8,400.00
100,800.00
Secretary 4 4,500.00
54,000.00
Accountant 4 8,000.00
96,000.00
Store keeper 4 6,000.00
72,000.00
Purchaser 13 15,500.00
186,000.00
Sells person 16 22,000.00
264,000.00
Assistants sells person 7 10,500.00
126,000.00
Marketing promoter 5 15,000.00
180,000.00
Supervisor 5 3,600.00
43,200.00
Cleaner 19 15,000.00
180,000.00
Gardener 21 9,000.00
108,000.00
Messenger 5 40,000.00
480,000.00
Guard 7 5,000.00
60,000.00
Electrician 4 6,000.00
72,000.00
Maintenance 8 9,000.00
108,000.00
Sub total 129 207,500.00
2,490,000.00

Casual /temporary
employees
Construction workers 300 260,000.00
3,120,000.00
Helpers 120 150,000.00
1,800,000.00
Finishing 51 55,000.00
660,000.00
Painting 43 48,000.00
576,000.00
Laborers 201 123,000.00
1,476,000.00
Sub total
715 636,000.00 7,632,000.00
Total
844 843,500.00 10,122,000.00

17
 7.2 Training Requirement

In the construction period, the plant shall hire foremen and other skilled
laborers that do have some experience in home building. Thus, the
envisaged plant as such does not need to provide training of personnel.
Whenever required, however, the plant shall provide on job training on
aspects of the construction technology and trouble shooting.

8 Financial Analysis

8.1 Underlying Assumption

The financial analysis of the proposed real estate development project is

based on the data provided in the preceding chapters and the following
assumptions.

A. Construction and Finance

Mobilization and Construction

period 18 months
30% equity and 70%
Source of finance loan
Tax holidays 2 years
Bank interest rate 12%
Discount for cash flow 18%
Based on lease rate of
Value of land ANRS
Repair & Maintenance 1% of fixed investment

B. Depreciation

Building 5%

18
 Machinery and equipment 10%
Office furniture 10%
Vehicles 20%
Pre-production
(amortization) 20%

8.2 Investment

The initial investment cost of the project is estimated at Birr 100 million as
shown in table 4 below. The Owner shall contribute 30% of the finance in
the form of equity while the remaining 70% is to be financed by bank loan.

Table 4: Initial Investment Cost

Items Total
Land, Building and civil works
83,500,000.00
Vehicles 10,500,000.00
Office furniture and equipments 500,000.00
Total fixed investment cost 76,015,000.00

19
 Pre operation capital expenditure*
4,500,000.00
Total 100,000,000.00

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

studies, consultancy fee and expenses for company‘s establishment, marketing and
interest expenses during construction.

8.3 Financial evaluation

I. Profitability
According to the projected plant will generate profit beginning from the
first year of operation. However, the result is obtained after setting a quite
high price (rent fee) that undoubtedly is unaffordable by the majority of the
target group. The main factor for the unattractive result is the relatively
high cost of construction owing to the presence of high material and labor
cost in the sector. The consultant also found that for a one bed room home
price for sale has to be about Birr 1,250,000 so as to obtain the minimum
feasible result. Therefore, the appropriate approach should be real estate
building for sale.
II. Breakeven Analysis
The breakeven point of the project is estimated by using income statement
projection.
Accordingly, the project will break even at 16.5% of capacity utilization. In
other words, the envisaged plant shall cover its operating cost at 16.5
percent capacity. Such lower capacity is obtained because the envisaged

20
project has got very low operating cost while its initial investment cost is
relatively high.

III. Payback Period

Investment cost and income statement projection are used in estimating the
project payback period. The projects will payback fully the initial
investment in five years.

IV. Simple Rate of Return

For the envisaged plant the simple rate of return equals to 18.5%

V. Internal Rate of Return and Net Present Value

Based on cash flow statement described in the annex part, the calculated
IRR of the project is 19.2% and the net present value at 18 % discount is Birr
15.7 million.

9 Economic and Social Benefit and Justification

The envisaged project possesses some benefits that help 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 earns a profit of Birr 82 million within the project life.
Nonetheless, the present value of the profit after deducting the initial
investment cost is insignificant.

21
 B. Tax Revenue

In the project life under consideration, the region will collect tax amounting
to Birr 11,030,000.

C. Employment and Income Generation

The proposed project is expected to create employment opportunity to

several citizens of the country. That is, it will provide permanent employment
to 844 professionals as well as support stuffs. Consequently the project
creates income of Birr 10.12 million per year. This would be one of the
commendable accomplishments of the project.
D. Pro-Environment Project

The proposed Real Estate project follows environmental impact assessment

(EIA) rules, though the proposed project is environment friendly. Plus the
proposed real estate will have its own green area, gardens, trees and supports
green development.

E. Other Social Benefits

The new project will solve current home and shelter problems of Bahir Dar
city as well as peoples of ANRS region people plus for diasporas and
supports the government in terms of addressing these shortages.

22
 ANNEXES

(FINANCIAL SUPPORTING TABLES)

23
 Annex 1: Total Net Working Capital Requirements (in Birr)
CONSTRUCTION PRODUCTION
Year 1 Year 2 1 2 3 4

Capacity Utilization (%) 0.00 0.00 100% 100% 100% 100%

1. Total Inventory 0.00 0.00 0.00 0.00 0.00 0.00

Raw Materials in Stock- Total 0.00 0.00 0.00 0.00 0.00 0.00

Raw Material-Local 0.00 0.00 0.00 0.00 0.00 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 0.00 0.00 0.00 0.00

Spare Parts in Stock and Maintenance 0.00 0.00 0.00 0.00 0.00 0.00

Work in Progress 0.00 0.00 0.00 0.00 0.00 0.00

Finished Products 0.00 0.00 0.00 0.00 0.00 0.00

2. Accounts Receivable 0.00 0.00 0.00 0.00 0.00 0.00

3. Cash in Hand 0.00 0.00 0.00 0.00 0.00 0.00

CURRENT ASSETS 0.00 0.00 0.00 0.00 0.00 0.00

4. Current Liabilities 0.00 0.00 0.00 0.00 0.00 0.00

Accounts Payable 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL NET WORKING CAPITAL REQUIRMENTS 0.00 0.00 0.00 0.00 0.00 0.00

INCREASE IN NET WORKING CAPITAL 0.00 0.00 0.00 0.00 0.00 0.00

24
 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 0.00 0.00 0.00 0.00 0.00 0.00

Raw Materials in Stock-Total 0.00 0.00 0.00 0.00 0.00 0.00

Raw Material-Local 0.00 0.00 0.00 0.00 0.00 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 0.00 0.00 0.00 0.00

Spare Parts in Stock and Maintenance 0.00 0.00 0.00 0.00 0.00 0.00

Work in Progress 0.00 0.00 0.00 0.00 0.00 0.00

Finished Products 0.00 0.00 0.00 0.00 0.00 0.00

2. Accounts Receivable 0.00 0.00 0.00 0.00 0.00 0.00

3. Cash in Hand 0.00 0.00 0.00 0.00 0.00 0.00

CURRENT ASSETS 0.00 0.00 0.00 0.00 0.00 0.00

4. Current Liabilities 0.00 0.00 0.00 0.00 0.00 0.00

Accounts Payable 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL NET WORKING CAPITAL REQUIRMENTS 0.00 0.00 0.00 0.00 0.00 0.00

INCREASE IN NET WORKING CAPITAL 0.00 0.00 0.00 0.00 0.00 0.00

25
 Annex 2: Cash Flow Statement (in Birr)
CONSTRUCTION PRODUCTION
Year 1 Year 2 1 2 3 4
TOTAL CASH INFLOW 543428.03 543428.03 324000.00 324000.00 324000.00 324000.00
1. Inflow Funds 543428.03 543428.03 0.00 0.00 0.00 0.00
Total Equity 217371.21 217371.21 0.00 0.00 0.00 0.00
Total Long Term Loan 326056.82 326056.82 0.00 0.00 0.00 0.00
Total Short Term Finances 0.00 0.00 0.00 0.00 0.00 0.00
2. Inflow Operation 0.00 0.00 324000.00 324000.00 324000.00 324000.00
Sales Revenue 0.00 0.00 324000.00 324000.00 324000.00 324000.00
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 543428.03 543428.03 115014.50 189268.50 237691.53 228561.94
4. Increase In Fixed Assets 543428.03 543428.03 0.00 0.00 0.00 0.00
Fixed Investments 517550.50 517550.50 0.00 0.00 0.00 0.00
Pre-production Expenditures 25877.53 25877.53 0.00 0.00 0.00 0.00
5. Increase in Current Assets 0.00 0.00 0.00 0.00 0.00 0.00
6. Operating Costs 0.00 0.00 2329.26 2329.26 2329.26 2329.26
7. Corporate Tax Paid 0.00 0.00 0.00 0.00 61465.30 65377.98
8. Interest Paid 0.00 0.00 112685.24 78253.64 65211.36 52169.09
9.Loan Repayments 0.00 0.00 0.00 108685.61 108685.61 108685.61
10.Dividends Paid 0.00 0.00 0.00 0.00 0.00 0.00
Surplus(Deficit) 0.00 0.00 208985.50 134731.50 86308.47 95438.06
Cumulative Cash Balance 0.00 0.00 208985.50 343717.00 430025.48 525463.54

26
 Annex 2: Cash Flow Statement (in Birr): Continued
PRODUCTION
5 6 7 8 9 10
TOTAL CASH INFLOW 324000.00 324000.00 324000.00 324000.00 324000.00 324000.00
1. Inflow Funds 0.00 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 0.00 0.00 0.00 0.00 0.00 0.00
2. Inflow Operation 324000.00 324000.00 324000.00 324000.00 324000.00 324000.00
Sales Revenue 324000.00 324000.00 324000.00 324000.00 324000.00 324000.00
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 219432.34 210302.75 201173.16 83357.97 83357.97 83357.97
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 0.00 0.00 0.00 0.00 0.00 0.00
6. Operating Costs 2329.26 2329.26 2329.26 2329.26 2329.26 2329.26
7. Corporate Tax Paid 69290.66 73203.34 77116.03 81028.71 81028.71 81028.71
8. Interest Paid 39126.82 26084.55 13042.27 0.00 0.00 0.00
9. Loan Repayments 108685.61 108685.61 108685.61 0.00 0.00 0.00
10.Dividends Paid 0.00 0.00 0.00 0.00 0.00 0.00
Surplus(Deficit) 104567.66 113697.25 122826.84 240642.03 240642.03 240642.03
Cumulative Cash Balance 630031.20 743728.44 866555.28 1107197.31 1347839.34 1588481.38

27
 Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED
CONSTRUCTION PRODUCTION
Year 1 Year 2 1 2 3 4
TOTAL CASH INFLOW 0.00 0.00 324000.00 324000.00 324000.00 324000.00

1. Inflow Operation 0.00 0.00 324000.00 324000.00 324000.00 324000.00

Sales Revenue 0.00 0.00 324000.00 324000.00 324000.00 324000.00

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 543428.03 543428.03 2329.26 2329.26 63794.56 67707.24

3. Increase in Fixed Assets 543428.03 543428.03 0.00 0.00 0.00 0.00

Fixed Investments 517550.50 517550.50 0.00 0.00 0.00 0.00

Pre-production Expenditures 25877.53 25877.53 0.00 0.00 0.00 0.00

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

5. Operating Costs 0.00 0.00 2329.26 2329.26 2329.26 2329.26

6. Corporate Tax Paid 0.00 0.00 0.00 0.00 61465.30 65377.98

NET CASH FLOW -543428.03 -543428.03 321670.74 321670.74 260205.44 256292.76

CUMMULATIVE NET CASH FLOW -543428.03 -1086856.05 -765185.31 -443514.57 -183309.13 72983.63

Net Present Value (at 18%) -543428.03 -460532.22 231018.92 195778.74 134211.07 112027.93

Cumulative Net present Value -543428.03 -1003960.25 -772941.33 -577162.59 -442951.52 -330923.59

28
Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED (Continued)

29
 PRODUCTION
5 6 7 8 9 10
TOTAL CASH INFLOW 324000.00 324000.00 324000.00 324000.00 324000.00 324000.00

1. Inflow Operation 324000.00 324000.00 324000.00 324000.00 324000.00 324000.00

Sales Revenue 324000.00 324000.00 324000.00 324000.00 324000.00 324000.00

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 71619.92 75532.60 79445.29 83357.97 83357.97 83357.97

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 0.00 0.00 0.00 0.00 0.00 0.00

5. Operating Costs 2329.26 2329.26 2329.26 2329.26 2329.26 2329.26

6. Corporate Tax Paid 69290.66 73203.34 77116.03 81028.71 81028.71 81028.71

NET CASH FLOW 252380.08 248467.40 244554.71 240642.03 240642.03 240642.03

CUMMULATIVE NET CASH FLOW 325363.71 573831.10 818385.82 1059027.85 1299669.88 1540311.92

Net Present Value (at 18%) 93489.54 78000.14 65060.89 54254.21 45978.14 38964.53

Cumulative Net present Value -237434.05 -159433.91 -94373.03 -40118.82 5859.32 44823.85

Net Present Value (at 18%) 44,823.85

Internal Rate of Return 19.2%

30
 Annex 4: NET INCOME STATEMENT ( in Birr)
PRODUCTION
1 2 3 4 5
Capacity Utilization (%) 100% 100% 100% 100% 100%

1. Total Income 324000.00 324000.00 324000.00 324000.00 324000.00

Sales Revenue 324000.00 324000.00 324000.00 324000.00 324000.00
Other Income 0.00 0.00 0.00 0.00 0.00
2. Less Variable Cost 619.26 619.26 619.26 619.26 619.26
VARIABLE MARGIN 323380.74 323380.74 323380.74 323380.74 323380.74
(In % of Total Income) 99.81 99.81 99.81 99.81 99.81
3. Less Fixed Costs 53285.05 53285.05 53285.05 53285.05 53285.05
OPERATIONAL MARGIN 270095.69 270095.69 270095.69 270095.69 270095.69
(In % of Total Income) 83 83 83 83 83
4. Less Cost of Finance 112685.24 78253.64 65211.36 52169.09 39126.82
5. GROSS PROFIT 157410.45 191842.05 204884.33 217926.60 230968.87
6. Income (Corporate) Tax 0.00 0.00 61465.30 65377.98 69290.66
7. NET PROFIT 157410.45 191842.05 143419.03 152548.62 161678.21
RATIOS (%)
Gross Profit/Sales 49% 59% 63% 67% 71%
Net Profit After Tax/Sales 49% 59% 44% 47% 50%
Return on Investment 25% 25% 19% 19% 18%
Return on Equity 36% 44% 33% 35% 37%

31
 Annex 4: NET INCOME STATEMENT (in Birr):Continued
PRODUCTION
6 7 8 9 10
Capacity Utilization (%) 100% 100% 100% 100% 100%

1. Total Income 324000.00 324000.00 324000.00 324000.00 324000.00

Sales Revenue 324000.00 324000.00 324000.00 324000.00 324000.00
Other Income 0.00 0.00 0.00 0.00 0.00
2. Less Variable Cost 619.26 619.26 619.26 619.26 619.26
VARIABLE MARGIN 323380.74 323380.74 323380.74 323380.74 323380.74
(In % of Total Income) 100 100 100 100 100
3. Less Fixed Costs 53285.05 53285.05 53285.05 53285.05 53285.05
OPERATIONAL MARGIN 270095.69 270095.69 270095.69 270095.69 270095.69
(In % of Total Income) 83 83 83 83 83
4. Less Cost of Finance 26084.55 13042.27 0.00 0.00 0.00
5. GROSS PROFIT 244011.14 257053.42 270095.69 270095.69 270095.69
6. Income (Corporate) Tax 73203.34 77116.03 81028.71 81028.71 81028.71
7. NET PROFIT 170807.80 179937.39 189066.98 189066.98 189066.98
RATIOS (%)
Gross Profit/Sales 75% 79% 83% 83% 83%
Net Profit After Tax/Sales 53% 56% 58% 58% 58%
Return on Investment 18% 18% 17% 17% 17%
Return on Equity 39% 41% 43% 43% 43%

32
 Annex 5: Projected Balance Sheet (in Birr)
CONSTRUCTION PRODUCTION
Year 1 Year 2 1 2 3 4
543428.0 1086856.0 1244266.5 1327422.9 1362156.3 1406019.3
TOTAL ASSETS 3 5 0 5 8 9
1. Total Current Assets 0.00 0.00 208985.50 343717.00 430025.48 525463.54
Inventory on Materials and Supplies 0.00 0.00 0.00 0.00 0.00 0.00
Work in Progress 0.00 0.00 0.00 0.00 0.00 0.00
Finished Products in Stock 0.00 0.00 0.00 0.00 0.00 0.00
Accounts Receivable 0.00 0.00 0.00 0.00 0.00 0.00
Cash in Hand 0.00 0.00 0.00 0.00 0.00 0.00
Cash Surplus, Finance Available 0.00 0.00 208985.50 343717.00 430025.48 525463.54
Securities 0.00 0.00 0.00 0.00 0.00 0.00
543428.0 1086856.0 1035281.0
2. Total Fixed Assets, Net of Depreciation 3 5 0 983705.95 932130.90 880555.85
1035101.0 1035101.0 1035101.0 1035101.0
Fixed Investment 0.00 517550.50 0 0 0 0
517550.5
Construction in Progress 0 517550.50 0.00 0.00 0.00 0.00
Pre-Production Expenditure 25877.53 51755.05 51755.05 51755.05 51755.05 51755.05
Less Accumulated Depreciation 0.00 0.00 51575.05 103150.10 154725.15 206300.20
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
543428.0 1086856.0 1244266.5 1327422.9 1362156.3 1406019.3
TOTAL LIABILITIES 3 5 0 5 8 9
5. Total Current Liabilities 0.00 0.00 0.00 0.00 0.00 0.00
Accounts Payable 0.00 0.00 0.00 0.00 0.00 0.00
Bank Overdraft 0.00 0.00 0.00 0.00 0.00 0.00
326056.8
6. Total Long-term Debt 2 652113.63 652113.63 543428.03 434742.42 326056.82
326056.8
Loan A 2 652113.63 652113.63 543428.03 434742.42 326056.82
Loan B 0.00 0.00 0.00 0.00 0.00 0.00
217371.2
7. Total Equity Capital 1 434742.42 434742.42 434742.42 434742.42 434742.42
217371.2
Ordinary Capital 1 434742.42 434742.42 434742.42 434742.42 434742.42
33
 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 157410.45 349252.51 492671.54
9.Net Profit After Tax 0.00 0.00 157410.45 191842.05 143419.03 152548.62
Dividends Payable 0.00 0.00 0.00 0.00 0.00 0.00
Retained Profits 0.00 0.00 157410.45 191842.05 143419.03 152548.62

Annex 5: Projected Balance Sheet (in Birr): Continued

PRODUCTION
5 6 7 8 9 10
TOTAL ASSETS 1459012.00 1521134.19 1592385.98 1781452.96 1970519.94 2159586.93
1. Total Current Assets 630031.20 743728.44 866555.28 1107197.31 1347839.34 1588481.38
Inventory on Materials and Supplies 0.00 0.00 0.00 0.00 0.00 0.00
Work in Progress 0.00 0.00 0.00 0.00 0.00 0.00
Finished Products in Stock 0.00 0.00 0.00 0.00 0.00 0.00
Accounts Receivable 0.00 0.00 0.00 0.00 0.00 0.00
Cash in Hand 0.00 0.00 0.00 0.00 0.00 0.00
Cash Surplus, Finance Available 630031.20 743728.44 866555.28 1107197.31 1347839.34 1588481.38
Securities 0.00 0.00 0.00 0.00 0.00 0.00
2. Total Fixed Assets, Net of Depreciation 828980.80 777405.75 725830.70 674255.65 622680.60 571105.55
Fixed Investment 1035101.00 1035101.00 1035101.00 1035101.00 1035101.00 1035101.00
Construction in Progress 0.00 0.00 0.00 0.00 0.00 0.00
Pre-Production Expenditure 51755.05 51755.05 51755.05 51755.05 51755.05 51755.05
Less Accumulated Depreciation 257875.25 309450.30 361025.35 412600.40 464175.45 515750.50
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 1459012.00 1521134.19 1592385.98 1781452.96 1970519.94 2159586.93
5. Total Current Liabilities 0.00 0.00 0.00 0.00 0.00 0.00
Accounts Payable 0.00 0.00 0.00 0.00 0.00 0.00
Bank Overdraft 0.00 0.00 0.00 0.00 0.00 0.00
6. Total Long-term Debt 217371.21 108685.61 0.00 0.00 0.00 0.00
Loan A 217371.21 108685.61 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 434742.42 434742.42 434742.42 434742.42 434742.42 434742.42
Ordinary Capital 434742.42 434742.42 434742.42 434742.42 434742.42 434742.42
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
34
8. Reserves, Retained Profits Brought Forward 645220.16 806898.37 977706.17 1157643.56 1346710.54 1535777.52
9. Net Profit After Tax 161678.21 170807.80 179937.39 189066.98 189066.98 189066.98
Dividends Payable 0.00 0.00 0.00 0.00 0.00 0.00
Retained Profits 161678.21 170807.80 179937.39 189066.98 189066.98 189066.98

35