Ethiopian Shipping and Logistics (ESL) has opened a bid for the procurement of new Ultramax vessels and is inviting shipbrokers to help purchase four second-hand mid-sized vessels for various purposes. Three local banks—the Commercial Bank of Ethiopia, Awash Bank, and Dashen Bank—are expected to finance this procurement.
This initiative is part of ESL’s long-term strategy to expand its fleet, which currently consists of ten vessels. Previously, the state-owned deep-sea operator had planned to build two Ultramax vessels at a Chinese shipyard, but the project was delayed due to financial issues.
In its latest tender, ESL is seeking bids for the construction of two heavy-lift Ultramax multipurpose (MPP) bulk carrier vessels. This represents a significant advancement for the company, which recently added its first medium-sized Ultramax bulk carrier to its fleet, marking a milestone in its six-decade history.
Additionally, ESL is calling on shipbrokers to assist in acquiring two more second-hand Ultramax bulk carriers. The bid documents specify that the company is looking for vessels with a deadweight tonnage (DWT) of 60,000–65,000 and no more than eight years old.
ESL aims to enhance its capabilities by also procuring specialized ships. It has invited shipbrokers to help acquire second-hand container vessels with a capacity of 3,000–5,000 TEU, not exceeding ten years of age.
Currently, ESL’s fleet primarily consists of multipurpose and bulk carriers. This initiative will reintroduce container ships to its operations, a segment the company exited nearly three decades ago.
For the construction of new vessels, ESL has chosen a two-stage bidding process. Shipbuilding companies will first submit proposals with their specifications, after which ESL will select the most suitable bidder.
Similarly, the acquisition of second-hand vessels will start with the selection of brokers who will identify appropriate ships.
Financing for the two vessels has been secured through agreements with Awash Bank and Dashen Bank, which will fund the MPP and Ultramax bulk carrier, respectively.
The Commercial Bank of Ethiopia is expected to support the procurement of three additional vessels, including the new Ultramax MPP and the two second-hand container ships.
Under the financing plan, ESL will cover 30% of the total cost for all five vessels, with the banks providing the remaining 70%. Additionally, the company plans to fully self-finance the acquisition of one vessel.
ESL anticipates taking possession of the four second-hand vessels in the near term, while the construction of the two brand new MPP vessels is expected to take at least two years after the bidding process concludes.
Payments for the new ships will be made in installments based on construction progress, while purchases of second-hand vessels will be finalized upon deal completion.
About a year ago, ESL CEO Berisso Amallo highlighted the urgent need for the four second-hand vessels to strengthen operations. Currently, ESL operates one Ultramax bulk carrier and nine handy-size multipurpose vessels.
This expansion is a significant step in ESL’s strategy to enhance its maritime capacity and diversify its fleet to meet growing logistical demands, including feeder services.
