Ethiopia is awaiting proposals from European and Asian companies for a joint venture intended to oversee the revival of a stalled fertiliser complex.

The unidentified firms have expressed interest in developing the Yayu Fertilizer Complex comprising a fertiliser plant, a 90-MW thermal power station and coal mine to supply the plant, according to Beyene Gebremeskel, the director-general of the Public Enterprises Holding and Administration Agency.

“The second step is screening by asking them to provide project proposals,” Beyene said. “It’s a partnership, not selling.”

The contract was initially awarded to the Horn of Africa nation’s military-linked Metals and Engineering, which is now seeking to write off about 70-billion birr ($2.4-billion) of debt in the lead-up to a possible privatisation of the conglomerate.

The proposed joint venture is part of a broader privatisation and liberalisation plan in Ethiopia as Prime Minister Abiy Ahmed’s administration seeks to reduce national debt and generate foreign exchange in Africa’s second most-populous nation.

Since its founding in 2010, METEC was billed as a key driver of the nation’s industrial policy overseeing a series of major infrastructure projects, including the fertilizer complex, the Grand Ethiopian Renaissance Dam and sugar factories. Abiy rescinded METEC’s control these projects, which are behind schedule and over budget, when he assumed power last year.

DOGGED BY DEBT

In common with many Ethiopian state-owned entities facing privatization, METEC is weighed down by debt guaranteed by the finance ministry with the government-owned Commercial Bank of Ethiopia. Its 70-billion birr of borrowings is equivalent to 9% of the country’s $26.7-billion external debt.

The company has also been at the center of alleged misappropriation of state funds at the sugar and dam projects.

Basic construction work at the Yayu complex, which METEC sub-contracted, hasn’t met required standards and the fertiliser plant isn’t operational, according to director-general Ahmed Hamza. The power plant built by Shandong, China-based Runh Power isn’t receiving coal, Ahmed added. Runh Power signed a contract for the plant in 2015 that ended in 2017, he said.

Runh Power didn’t respond respond to emails seeking comment on the contract.