Tana Beles, an area located on the border between the Amhara and Benishangul-Gumuz regions some 225 kilometers from Bahir Dar, is the setting for the long and turbulent history of a grand but ultimately impotent development project.
The saga, which stretches back nearly a century, has seen a number of ambitious endeavors regrettably end as cautionary tales. Conspiracy theories abound, with various entities being implicated in the project’s downfall.
The current project, a sugar factory that commenced production four years ago, has recently faced significant challenges. Since the start of 2025, more than 75 percent of the workforce of the Tana Beles Sugar Factory has been absent from the factory premises. The estate currently houses a large number of military personnel, and has been the scene for a slew of rampant theft.
The situation raises critical questions about the future of the factory and its employees.
The Reporter Magazine spoke to factory workers, members of management, representatives of the Ethiopian Investment Holdings, labor union leaders, and others to find out what exactly is going wrong at Tana Beles.
………………………………………………………………………………………………………………………………………………
When Bezabih Fantaye (name changed), a 10th-grade graduate residing in Injibara, was forced to enter the labor market a decade ago to support his impoverished parents, news of a large factory opening near his hometown offered a glimmer of hope for his future.
Despite dropping out of preparatory school and foregoing his chance to receive a university education, Bezabih harbored aspirations for a professional career. At this juncture, he learned about the launch of a pioneering Technical and Vocational Education and Training (TVET) program specifically designed to train workers for the Tana Beles Sugar Factory.
Without hesitation, Bezabih enrolled in the program and successfully earned a diploma. It was the first step towards gaining employment at the state-owned sugar estate, as well as achieving his long-term goals.
Bezabih has been employed at Tana Beles for a decade now, during which time he has consistently honed his skills and built up his qualifications through advanced TVET training programs in sugar irrigation.
“My entire professional life has been dedicated to working at the sugar factory,” he said. “I spend more time at the Tana Beles factory than anywhere else, including my home.”
Despite the commitment and loyalty, Bezabih’s career and livelihood are at risk. The Tana Beles Sugar Factory, which has never fully realized its operational capacity, has been caught in a downward spiral and is no longer able to fulfill its commitments, including payroll for its employees.
Bezabih and his colleagues have not received their salaries since the start of the Ethiopian new year in September.
Struggle for Livelihood Security
Factory workers waited months for the management to pay up before making the decision to take collective action. They organized a strike to demand their wages.
“We were all suffering silently, burdened by mounting debts to friends and relatives. Many families depend on these salaries. We felt compelled to unite and voice our concerns about this critical situation,” Bezabih said.
However, the peaceful protest was met with a heavy-handed response.
“Believe it or not, we were surrounded by tanks,” Bezabih told The Reporter Magazine.
According to him, factory management called on nearby military forces to ‘handle’ what they labeled an ‘attempt to incite chaos.’
“It was a terrifying experience,” said Bezabih.
Kassahun Folle, president of the Confederation of Ethiopian Trade Unions, brought the case to the attention of Ethiopian Investment Holdings (EIH) and its Chairperson, Deputy PM Temesgen Tiruneh, in an official letter three months ago.
EIH oversees Tana Beles sugar factory as one of its subsidiaries.
“EIH responded to our letter orally,” Kasahun told The Reporter Magazine. “We had a conversation with Dr. Brook [Taye], and they promised us that they would address the salary issue. However, I have not had any updates since then.”
EIH moved to transfer staff members at Tana Beles to other operational factories. The majority of the workers have since been reassigned, following four months of waiting for salaries and work.
“We believe it is crucial to keep these workers engaged and productive rather than allowing them to remain idle. We are committed to ensuring that all outstanding salaries are paid to these workers. I have personally been actively involved in this process and have engaged in discussions with various stakeholders to facilitate a smooth transition,” Brook, CEO of the Investment Holdings, told The Reporter Magazine.
Currently, only 421 employees, primarily administrative and plantation workers, remain at the Beles Sugar Factory’s site.
Bezabih and his colleagues have yet to receive their outstanding salaries.
“They said they would pay us the backpay in the coming four months, doubling the monthly salary,” Bezabih explained. “This means that workers are essentially being forced to continue working solely to collect the backpay, which is a deeply concerning situation.”
Brook says the various factories that former Beles employees have been reassigned to have pledged to cover the outstanding backpay.
“Some of them are not even in need of additional workers, but they’ve taken them on for cooperation,” said the CEO.
The Bitter Harvests of Tana Beles
The Tana Beles Sugar Development Project, initially envisioned as a complex comprising three factories in the early 2010, has undergone significant downsizing in the last couple of decades.
The project has since been scaled back to a single facility, which was initially scheduled for completion within 18 months. Today, 14 years (168 months) since it was commissioned, it stands incomplete.
The estate’s planned production capacity has also been cut heavily, and the convergence of a number of problems, some of them rather opaque, means it currently produces a grand total of zero kilograms of sugar.
However, the last two troubled decades by no means encompass the whole story of the ill-fated Tana Beles Development Project. The project, at least in its planning phases, has played a significant role in Ethiopia’s economic history.
The story begins in the late 1920s, following negotiations between the administration of Emperor Haile Selassie I and the United States that led to an in-depth study (the 1958-1964 Master Plan Study Report) conducted under the auspices of the then ‘USA-Ethiopia Cooperative Program for the Study of the Blue Nile Basin.’
The detailed study proposed the diversion of water from Lake Tana to the Beles River through a tunnel, enabling large-scale irrigation in the downstream valley. The plan also envisioned the construction of five major hydroelectric power stations in the upper reaches of the river.
Funding for the project was also reportedly secured through a USD 20 million loan arrangement with the United States.
Furthermore, the study recommended the resettlement of nearly half a million farmers from the deforested and overpopulated highlands of northern Ethiopia to the irrigated agricultural areas.
However, this ambitious project ultimately failed to materialize. Diplomatic pressure exerted on the US by the United Kingdom and its former colony Egypt is often cited as the primary reason behind this failure.
In 1985, the Tana Beles project received a renewed impetus with the initiation of a major hydroelectric and irrigation development program. The Italian government, as part of a ‘post-colonial humanitarianism’ initiative in response to the devastating Ethiopian famine, provided nearly USD 300 million in funding.
Studio Pietrangeli, an Italian engineering firm, conducted the preliminary assessment, while Salini Costruzioni, another Italian company with a long-standing presence in Ethiopia, was contracted for project implementation.
This marked a significant advancement compared to previous attempts, which had failed to progress beyond the planning stage.
Concurrently, the ‘Genet Settlement and Development Project,’ a large-scale resettlement program aimed at relocating people from drought-affected areas to this fertile land, was launched. The project initially envisioned the resettlement of approximately one million people across a total of one million hectares of land.
Mintesinot Demissew was one of many who worked on the project. He recalls the impressive progress made during the initial phase.
“When we returned after a week’s absence, the site looked like it had been transformed into Europe,” he said.
Tragically, the Tana Beles project failed to achieve its full potential. Soon after the overthrow of the Dergue regime by the Tigray People’s Liberation Front (TPLF), the project was abruptly halted.
The situation deteriorated further, with project infrastructure being systematically destroyed, until there was almost nothing to suggest the project had even existed at all. It was finally abandoned in 1994.
“When the TPLF fighters came, everything ended.” Mintesinot said with a heavy heart. “No Egyptian fighter appeared in Metekel to obstruct the project. However, during the period when the TPLF controlled the area, three Egyptian diplomats arrived in Khartoum and met with TPLF officials. This proved to be a decisive turning point, ultimately leading to the project’s demise. None of us have returned to the site since then.”
Nearly two decades would pass before the EPRDF administration revived the Tana Beles project at the start of the 2010s. This time, the plans included a sugar factory and a hydroelectric dam.
Despite the initial enthusiasm, the revival has fallen far short of expectations. The project, initially slated for completion within 18 months, remains unfinished after 14 years.
The initial contractor for the project was the infamous military institution, Metals and Engineering Corporation(MeTC). The project, initially budgeted at USD 235 million, was only 65 percent complete when MeTC failed to deliver.
To complete the remaining work, the government awarded the contract to CAMC Engineering Co. Ltd (CAMCE), a Chinese company, in 2019. This additional phase of the project was estimated to cost USD 95 million, with CAMCE expected to finalize the project within eight months. However, five years later, the project remains incomplete [despite its inauguration back in 2021].
The project’s scope has also been reduced repeatedly.
During the Dergue era, the initial plan encompassed one million hectares of land, but in reality, the project was scaled down to 220,000 hectares.
Similarly, during the EPRDF era, initial designs for a sugar estate on 75,000 hectares were never realized, with less than 15,000 hectares included in practice.
According to sources at the factory, the planned daily crushing capacity of 12,000 tons of sugarcane was later reduced.
The reductions in scope have done little to turn the vision into reality, and the Tana Beles Sugar Project remains in a state of limbo. The uncertainty jeopardizes not only the job security of employees like Bezabih, but also the livelihoods of more than 1,300 people who were encouraged to relocate from their ancestral lands 14 years ago.
Furthermore, the project’s failure has significant implications for the national economy.
What Really Went Wrong?
The fate of the Tana Beles project now hangs in the balance. Can it ever be revived, or is this its final demise? Time will tell. Regardless, it is crucial to understand the root causes of the problems that led the third round of development aspirations to go awry.
An engineer at Tana Beles who was recently reassigned to the Wonji Sugar Factory. He observes that Tana Beles possesses significant potential. Abundant and easily harnessed water resources, a vast expanse of land, and a large, effective workforce mean it ranks among the best of Ethiopia’s sugar estates.
Aemero Wubale, 54, has a long history of employment at Tana Beles, having served as head of farming operations and as an advisor to the general manager. He shares the engineer’s assessment of the estate’s potential.
He argues that the factory was well-positioned to continue production two years ago if it had received the necessary budgetary support.
These inherent advantages beg the question: how could the estate possibly have fallen into the precarious position it is in today?
Officials, both at the factory and within EIH, attribute the failure to a combination of numerous factors.
Brook [EIH’s CEO] cited a shortage of readily available sugarcane as an immediate cause for the cessation of production.
This is corroborated by previous reports, which indicate that more than 12,200 of the estate’s total 13,100 hectares of sugarcane fields could not be harvested because the cane had aged more than four years. Sugarcane plants are typically harvested within two years of planting (24-26 months).
Eight years ago, the factory estimated the financial losses incurred due to the aging of the sugarcane to be 7.6 billion birr. A portion of the project’s land was also temporarily leased to investors for the cultivation of grains, including maize and soybeans.
However, the assertion that a lack of sugarcane caused the factory to halt production is challenged by a former senior member of management at Tana Beles.
“We had approximately 5,000 hectares of sugarcane, of which roughly 3,000 hectares were mature and ready for harvest when the factory ceased production. This suggests that a shortage of sugarcane was not the primary factor leading to the cessation of production,” the former manager told The Reporter Magazine.
He did, however, acknowledge the need for increased sugarcane production to operate at full capacity.
Power disruption is another frequently cited factor. The project site used to receive electricity from the nearby Qunzila power station, but this supply has been interrupted for over two years.
The Reporter Magazine learnt from sources at the factory that two years ago, the main grid transformer, which supplied power from the Qunzila station, was stolen, resulting in significant power disruptions.
“We once heard that some individuals were detained in connection with the theft of the transformer,” recalled Bezabih. “But we have never been informed of any subsequent action taken against them. What we know for certain is that the factory has been without electricity since that incident.”
The factory has also experienced the theft of significant and valuable machinery on multiple occasions.
“Little has been done to address these incidents,” said another employee who spoke to The Reporter Magazine.
Some workers expressed their belief that these thefts were likely orchestrated and may involve high-level officials.
However, Aemero contends that this power disruption has no direct impact on the factory’s production.
“While it undoubtedly affects the overall operations within the compound, the factory relies solely on fuel for its operations and has never utilized electricity as a primary energy source,” he asserted.
But the ongoing conflict in the Amhara Regional State has made it difficult to access fuel according to Aemero.
The conflict, which has been raging for well over a year now, looms large over Tana Beles. Surrounding areas have been the scene of frequent fighting, and the Ethiopian National Defense Force (ENDF) has established a camp within the project site.
“Two military camps have been established within the premises,” a factory worker in the site told The Reporter Magazine. One camp is located in the estate’s ‘Mender II’ annex, while the other sits in the main compound.
Tana Beles currently hosts more soldiers(thousands) than it does factory workers, according to the source.
Baynesagn Zerihun, the newly-assigned general manager at Tana Beles, declined to provide more information.
“This matter falls outside my area of responsibility. It is a military issue,” said Baynesagn, who is serving as the troubled estate’s general manager for the second time in his career.
Nonetheless, there is little doubt that the conflict has severely disrupted the factory’s operations, contributing significantly to its current state of dysfunction. According to the engineer, the disruption of fuel imports, a critical input for the factory’s production, is a direct consequence of the conflict.
In addition, the fighting has severely strained relationships among workers, fostering an atmosphere of mistrust, according to Bezabih.
He says that with the conflict came another disturbing development within the estate: the division of its workforce along ethnic and tribal lines.
“We used to work together harmoniously, united by a common goal,” Bezabih said. “However, following the outbreak of conflict, divisions emerged within the workforce. Some workers resided in areas less affected by the conflict, while others were deeply engaged in the struggle. These divisions inevitably manifested within the factory, leading to increased tensions.”
Bezabih hails from the Awi Zone, an area perceived to have been littleengagedin the fighting.
The conflict’s impacts on Tana Beles do not end there.
“Theft was rampant, and the sugarcane fields were frequently set ablaze. In some instances, fires erupted three times a day. Regrettably, those responsible for these acts of sabotage have rarely been apprehended and brought to justice,”Aemero told The Reporter Magazine.
Reports of unidentified bodies appearing on the estate have only made a difficult situation more grim.
The senior advisor attributes the project’s failures primarily to mismanagement and a lack of political commitment.
“Oftentimes, managers have primarily resided in Addis Ababa, neglecting on-site presence at the factory,” observed Aemero. “They attempt to manage the factory remotely, which is simply not feasible. While some leaders demonstrated commitment and made genuine efforts to deliver, they often left their positions for reasons that remain unclear to us.”
According to him, this lack of leadership stability has fostered an environment where superficial displays of authority prevail.
“What we often witness these days are ceremonial displays rather than genuine engagement,” Aemero noted.
He cited an incident where, in response to the theft of large equipment from the factory a few months ago, the management conducted a door-to-door search in a bid to locate the stolen property.
“Bear in mind that these pieces of machinery are enormous and could never possibly fit through the door of a residential house. It was absurd to search for such large items in places where they could never possibly be concealed,” said Aemero.
To him, the management’s bizarre attempt at investigation was little more than a facade.
“There were numerous other instances of senseless responses to real problems, ultimately accelerating the factory’s shutdown,” said Aemero.
The factory has unfortunately devolved into an environment rife with conflict and internal disputes. Relationships between employees and management, as well as among employees themselves, have become increasingly tense.
“There was a time when we worked tirelessly, even at night. Workers were passionate, committed, and felt a strong sense of ownership. Unfortunately, this dedication has been lost in recent years,” said Bezabih.
A Clouded Future
The head of EIH told The Reporter Magazine that the decision to halt production was made to address the factory’s numerous challenges, including power outages, declining worker morale, and irrigation issues, as well as other ‘technical problems’.
He said that the measure was deemed necessary to ensure its long-term viability.
“For the coming year and a half,” said Brook, “we will prioritize the revitalization of the sugarcane plantation.”
Factory employees, along with Kassahun, president of CETU, informed The Reporter Magazine that, based on their discussions with EIH, the factory is not expected to resume operations for at least two years. Even this timeline is uncertain.
Three years ago, thousands of workers at the Tendaho Sugar Factory were laid off after the federal government instructed management to reduce the workforce by 15,000. Following a legal battle, the workers won their case, and the factory was ordered to pay 94 million birrin compensation to 6,700 employees. However, this did not guarantee their continued employment at the factory.
Now, Bezabih remains torn between waiting for the reopening of the factory, which he deeply associates with his livelihood, and the daunting prospect of starting over from scratch.
“These days,” he confessed, “I contemplate moving to major cities and seeking employment, even as a daily laborer in the construction sector. The harsh realities I face offer little reason for optimism.”
Aemero emphasizes the urgent need for an independent audit. He stressed the importance of auditing not only the project’s financial aspects but also its overall performance.
“We all need to be audited. Beles needs to be audited,” he said. “Why has this project failed to progress and reach its intended level?”
Aemero advocated for a thorough and impartial investigation.
“If you want to find your stolen ox,” he said, “you wouldn’t search for it with the thief.”
