DEREJE TAFESE DAIRY FARM PROJECT

1. EXECUTIVE SUMMARY

Project Initiator: [Link] Tafese dairy farm project is initiated by the owners’ Mr.
Dereje Tafese. He is an Ethiopian citizen live in Bench Sheko Zone , Shey Bench
Woreda.

The purpose of the newly initiated Project will require 6 hectares of land for the
purpose of 50 cows. The proposed [Link] Tafese dairy project will be sited in the
district of Bench Sheko Zone , Shey Bench Woreda, Bakabas Kebele.

 The total estimated investment cost for [Link] Tafese dairy project is
48,000,000 birr.
 Regarding the source of finance 75% or 36,000,000birr shall be loan from bank.
 The rest 25% or 12,000,000 birr from owners' equity.
 Land requirement: The dairy farm project shall be needs land 6 hectare.
 Job opportunity : at full operation Mr. Dereje Tafese dairy project expected to
create 20 permanent and 10 Temporary jobs labors, most of which are to be take on
from local areas

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 DEREJE TAFESE DAIRY FARM PROJECT

2. INTRODUCTION

2.1 OVERVIEW OF DAIRY FARM IN ETHIOPIA

The Ethiopian dairy cattle population is distributed over all regions of the country. The four
regions with the greatest number of milking cows are highlands of Tigray, Amhara,
Oromia and Southern Nation, Nationality and People (SNNP). Out of the total milking
cow population, only 10% is located in lowland areas. Smallholders in the highland areas
mainly keep the 11.4 million milking cows that produce 3 billion liters of milk. About 3%of
the milk produced in the highland areas comes from medium and large-scale
commercial farmers. Indigenous stock produce 97% of the milk produced by cattle and
the remaining 3% comes from improved exotic crosses and pure grade exotic cattle. The
percentage of Friesian or Jersey-blood in these crossbreds usually ranges between 60%
and 90%. The mild temperatures, high rainfall, and fertile soil in the highlands create good
conditions for higher producing exotic breeds.
Farmers engaged in agricultural activities are frequently exposed to changes that force
them to adjust their operations to increase profitability and competitiveness. Due to
limited resources, businesses including agribusiness firms need to make the best use of
the economic resources available to them to maximize outputs, sales revenue, and profit.
Therefore, managers of different business firms need to take prudent decisions regarding
the production, processing, type of product mix, choice of inputs, and the prices they pay
in purchasing inputs and product prices they receive and so on. The principles of
economics, in this regard, should be applied to the decision-making process within the
firm or organization.
Dairying is considered as an important subsector for improving the rural livelihood.
Because of the emphasis given to the sector and growing demand of dairy products due to
population growth and changes in lifestyles of urban dwellers, private sectors are
interested to join the dairy industry. Improving dairy farming system through
intensification (use of crossbred cows, improved feed, health, and management) is
believed to enhance the process of economic development. However, improving this

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subsector requires the knowledge of production costs and receipts. Thus, there is a
growing demand for more updated and day-to-day knowledge on economic indicators to
make the sector more competitive and profitable in the era of highly volatile milk and
feed prices.

2.2 PROFILE OF THE PROMOTER

The promoter’s Mr. Dereje Tafese an Ethiopian elder. He is the founder of the dairy
farm Project. There have established path record of success in different business
sectors in Shey Bench Woreda,Siz Town. Mr. Dereje Tafese will provide nearby milk
products and manure for local and central markets. The Promoters’ now have allocated
48,000,000.00 for milk cows/dairy farm project to be used for milk products Project.

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3. OBJECTIVES
 Generate income from sale of milk and milk products, and live animals to support
family livelihood.
 To have profitable alternative employment option for children and promote micro
dairy farming among fellow farmers and rural youths.
 To generate Bio-gas and have sustainable supply of energy for cooking susch that
firewood collection from forest is no longer necessary.
 To promote organic farming among fellow farmers.
 The plentiful manure produced shall improve the productivity of other crops and
enable to practice organic farming.
4. SWOT ANALYSIS
Strong policy support of the Government extended through DLS for Dairy projects is
primary source of motivation. The Government has been providing credit at lowest
possible interest rate of 4%. The demand of milk and milk products has always been
high and ever increasing. The market is readily available, the price is high and
entrepreneurial skills is adequate.

Besides, the adequate family labour, land to grow pasture, standing fodder tree in
the farm, crop residues to feed the cows, farm road passing through and nearness to
the highway are the strengths of this enterprise.

The initial front end capital investment is high. The shelf of milk is low and the
enterprise has long gestation period. These are the strong weaknesses of the
enterprises, which deer most entrepreneurs.

Cheap import from India and the possibility of disease outbreaks and death of the cows,
non- availability and high cost of replacement stocks are the threat to the enterprise.
Sudden change in the policy support is also a potent threat.
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SWOT ANALYSIS
Strength Weakness
 Financial support of CB at 4%  High initial capital investment
interest.  Long production/turnover period
 Availability of land, labour, fodder,  Short shelf life of milk
crop residues and water  Require large area of land
 High demand and good price for
milk and milk products
 Good level of entrepreneurial skills
Opportunities Threats
 Strong government policy support  Diseases outbreaks
 High demand and ready market  Cheap import from India
 Good scope for product  Sudden change in policy support.
diversification  Replacement stock not
 Expansion of enterprise creating readily available and the
jobs at home. cost is high.
 Socially acceptable enterprise

Keeping in view the above considerations, dairy enterprise require high level of
animal husbandry and management skills.
 DEREJE TAFESE DAIRY FARM PROJECT
5. PEST ANALYSIS
The Political, Economical, Social and Technical (PEST) analysis affirms high
demand of milk and milk products, availability of the technology available, there
is strong policy support of the Government and it is socially acceptable
enterprise.
Parameters Implication for organization/business
Political
National policies Improve rural livelihood and well being
Poverty reduction
Job creation
Import substitution of dairy products
Economic
Demand High
Supply Low
Market prices Good
Market trend Increasing
Capital investment Requires high initial capital investment cost
Social
Social stigma Socially just as it does not involve slaughtering
Technological
Technology Available
Equipments Available
Entrepreneurial skill Adequate

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Dairy investment is capital intensive. It is expensive to start and it takes long turn
over time to generate income and pay back the loan for establishment.

Dairy enterprise deals with live animals vulnerable to disease outbreak and the
risk of animals being succumbed to diseases is high. Because it requires land for
fodder production, the scope of expansion is limited. Also the marketable products;
the milk and milk products are highly perishable and have short shelf life.

However, with the strong government policy support, high level of entrepreneurial
skills and commitment of the entrepreneurs shall take care of all the weakness and
threats of this enterprise.
6. TECHNICAL PLAN
a. STRUCTURE AND EQUIPMENT

i. STRUCTURES

The structures will include:

1. Main shed (26 ft x 16.5 ft)

2. Dung peat (20 ft L x 5ft B x 4ft H)
3. Feed store (8ft x 6 ft)
4. Calf Pan (6ft x 5 ft)
5. Water Tank (1000 liter tank and stand)
6. Biogas plant (Standard size)
7. Fencing (30 ft x 30 ft wire mesh fencing)
 DEREJE TAFESE DAIRY FARM PROJECT

Total wall height of main shed shall be 12 ft. At 8 ft height, a wooden ceiling will
be made. The 4 ft tall ceiling space will be used for keeping silage and hay. The
total wall height for feed store (8 ft x 6 ft) and calf shed (5 ft x 4 ft) shall be
only 8 ft. The dung peat will be made of stone concrete masonry. The urine will
be collected in urine pit. The Biogas plant will be built under guidance of the
District Livestock Service Office (DLSO).

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ii. EQUIPMENT

The following necessarily required dairy equipments shall be purchased:

1. Chaff cutter 10 no.
2. Milk Cans (5, 10, 20 and 40 lit. cap.) 10 set
4. Cream Separator cum Butter Churner 10 no.
5. Deep Freezer (65-125 liter) 10 no.
b. Parent stock and Herd dynamic

The Jersey cross bred cows having up to 75 % exotic blood inheritance giving
16L milk/ day, preferably in 1st to 2nd lactations shall be procured. Three in
milking and two dry pregnant cows (70:30 ratios) shall be procured to ensure
continuous production of milk year round.
The female progeny born will serve as the replacement stock to replace aging
and/or low performing cows. The male progeny born will be reared for 15-18
months and sold off.
 DEREJE TAFESE DAIRY FARM PROJECT

c. FEEDING

DRY MATTER REQUIREMENT

The Dry Matter (DM) requirement will be met with a combination of concentrated
feed and the green fodder from pastures, fodder trees and forest, crop residues,
silage and hay.
 A cow on an average weighing 300 kg live body weight will be considered as
one Adult Unit (1 AU).
 In a day, DM equivalent to 2.5% live weight of the cow shall be fed.
 To 1 AU weighing 300 kg, 7.5 kg DM shall be fed in a day.
 100 kg green fodder in growth stage shall be considered equivalent to 20 kg
DM and in flowering or later stage shall be considered equivalent to 25 kg.
 About 80 % of DM requirement will be met with green fodder (50 %),
silage (20%) and hay/straw (10%). The balance 20% will be met from
concentrate.
FODDER PRODUCTION

Pasture shall be established and fodder trees shall be planted in own registered
land. Hybrid Napier and Guinea grass among tall grasses and Desmodium and
Setaria among short grasses shall be grown. Among fodder trees fast growing
local species shall be planted. To the extent possible 0.5 acre of land/animal will
be allocated for fodder production.

Hay making and fodder enrichment such as ensiling silage, feed blocking will be
done. The excess green fodder during summer shall be converted into hay or
silage and stocked for lean season.

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The silage making in plastic-bag will be done. It has comparative advantage over
silo-pit, for small scale farming (micro-farm). It involves less cost, less labor
intensive and more convenient technique.

A minimum of 4 MT of silage shall be conserved which will be adequate to feed 5

cows @ 6kg silage/animal/day for a period of four months. The fodder grasses will
be grown in dry land and fodder trees of recommended and/or local species will be
planted in and around farm boundaries including wetland boundaries.
 DEREJE TAFESE DAIRY FARM PROJECT

Feed concentrates

Cows will be fed with concentrates following the recommended feeding regimes
recommended by the DLSO. Specific ration including calf starter, maintenance
requirement, gestation and production rations shall be fed. In case the
concentrates are either too expensive or inconvenience to get, a home-made
general ration of following combination in 100 kg shall be made:
1. Crushed maize 42kg
2. Wheat/ Rice bran (Dhuto) 35kg
3. Oil Cakes (Pina) 20kg
4. Mineral mixture 2kg
5. Salt 1kg
Total 100kg

Anything additional of extra to needed to be added shall be done as per the advice
of the DLSO.
FEEDING REGIMES

When 40 kg "nutritive" green fodder is fed to an Adult Unit (AU) in a day, it will
meet the feeding requirement. However, 1 kg concentrate per day shall be fed for
good health of the cows. Fodder grasses like Guinea or Napier with a minimum
of 6 % crude protein on dry matter basis is considered adequate as maintenance
ration. Grass-legume mixed fodder is considered adequate to maintain milk
production of up to 3-4 kg.

Generally an Adult Unit (AU) weighing 300 kg body weight shall be fed 7.5
kg DM and 3 kg concentrate, including maintenance and production/pregnancy

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allowance. As a guideline the following feeding regime shall be followed:

FEEDING REGIMES FOR MILKING COWS

S. Milk Green Fodder Dry Fodder Concentrate

Time
N. Production (kg) (kg) (kg)
1. Lactation days 20-25 5-6 3.0-3.5
6-7 liters milk
per day Dry days 15-20 6-7 0.5-1.0
2. Lactation days 25-30 4-5 4.0-4.5
8-10 liters milk
per day Dry days 20-25 6-7 0.5-1.0
 DEREJE TAFESE DAIRY FARM PROJECT

Feeding regime during summer and winter months for different category
of Cows

Summer Feeding Regime Winter Feeding Regime Category

Concentrate Green Concentrate Green Dry Fodder
Mixture (kg Fodder (kg) Mixture (kg) Fodder (kg) (kg)

Dry Cows - 25-30 1.25 5.0 5-6

Milking 1 kg for every 1.25 + 1 kg for
2.5-3.0 kg of 30 every 2.5 - 3.0 kg 5.0 5-6
milk of milk
Pregnant Production Maintenance +
Allowance + 1 to production + 1 to
1.5 kg from 6th 25 - 30 1.5 kg from 6th 5.0 5-6
month of month of
pregnancy pregnancy

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Feeding regime for calves up to 6 months

Approx. body Quantity of Quantity of calf Green Fodder

Age of calf
weight (kg) milk (kg) starter (g) (kg)

4 days to 4 weeks 25 2.5 Small qty. Small qty.

4-6 weeks 30 3.0 50-100 Small qty.

6-8 weeks 35 2.5 100-250 Small qty.

8-10 weeks 40 2.0 250-350 Small qty.

10-12 weeks 45 1.5 350-500 1-0

12-16 weeks 55 - 500-750 1-2

16-20 weeks 65 - 750-1000 2-3

20-24 weeks 75 - 1000-1500 3-5

Also the following points shall be kept in mind in feeding the cows:
1. Maintain optimum ratio of roughage and concentrate (Generally 60:40
ratio).
2. Feed concentrate individually according to production requirements.
3. Good quality roughage saves concentrates. Approximately 20 kg of
grasses fodder or 6-8 kg legume fodder can replace 1 kg of concentrate
mixture in terms of protein content.
4. 1 kg straw can replace 4-5 kg of grass on dry matter basis. In this case the
deficiency of protein and other nutrients should be compensated by a
suitable concentrate mixture.
 DEREJE TAFESE DAIRY FARM PROJECT

5. Feed concentrate mixture at or preferably before milking – half in the

morning and the other half in the evening.
6. Feed roughage three times a day: morning, afternoon and evening.
7. Abrupt change in the feed should be avoided.
8. Tender green fodder should be wilted or mixed with straw before feeding.
Legume fodders, particularly at young and tender stage must be mixed
with straw or other grasses to prevent the occurrence of bloat and
indigestion.
9. Feed store must be dry and well ventilated to prevent development of
moulds and toxins in the feed that may cause poisoning.

d. Health care

Many animal-health related problems shall be avoided by the same measures that
enhance production. The following norms shall be practiced to ensure good
health of the herd:

Bio-security
Bio-security measures including fencing to restrict access by visitors, dogs and
other animals will be followed to prevent incidence of diseases. The farm will
have foot batch/ foot dip at the entry point.

Hygiene
The shed shall be regularly cleaned and disinfected. Cleaning shall be done
before disinfection. The cows shall be fed balanced feed and provide clean
drinking water.
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Quarantine
The sick animals shall be quarantined. This means sick animals shall be kept
away from the rest during their illness. The newly purchased cows shall not be
allowed to mix with the herd for about six weeks.

Vaccination
Timely vaccination against known diseases like foot and mouth shall be done as
advised by the DLSO.

Timely vaccination, de-worming and detection of heat, reproduction monitoring

such as pregnancy diagnosis, mastitis prevention and control and care of hoof
shall be ensured to enhance farm productivity.
e. Breeding

Artificial Insemination (AI) services from nearest AI out-reach station will be

availed for good quality progenies. Cattle Identification Number with plastic
ear tags will be used for animal identification. Individual cattle register shall be
maintained. Besides the cattle register, following records also be kept:

i. Daily milk production and sale records

ii. Concentrate purchase and feeding record
iii. Farm herd book (for all categories of animals)
iv. Monthly expenditure and income statements

A complete breeding and herd health records shall be maintained through

maintenance of herd record books.
 DEREJE TAFESE DAIRY FARM PROJECT

f. Organic wastes

The dung pits as indicated in the structure will be constructed. The fresh cow
dung will be used for Bio-gas production. The Bio-gas will add to the income of
the farm by saving expenditure in the energy required for cooking. The slurry
coming out of the Bio-gas plant and the organic waste shall be used for making
Farm Yard Manure (FYM).
7. MARKETING PLAN
a. EXISTING MARKET

Milk collection center (Private/DDC) is located in less than 2 km distance. The

processing plant purchase fresh milk at birr 140 per liter.
b. Alternative strategy

Depending on the profitability and in case the plant is not operating, it is

proposed to make butter and cheese. If fresh milk cannot be sold or profitable to
sell as fresh, it will be processed into butter and cheese.

The butter and cheese will be stocked hygienically for which a deep freeze shall
be purchased and supply butter and cheese in bulk to market.

To create volume, milk from neighbors will be purchased. Efforts shall be made
to create Producers Group.

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8. FARM CAPACITY AND LAND USE PLAN

The farm 100 milk cows requires a total of 6 hectares of land for its the production
of milk products and different activities. From the total 6 hectares of land 3ha shall
be used for animal feed production ,0.5ha animal feed processing , 0.5 ha health
service area,2 ha for animal grazing ,and 1 ha animal shed construction, admin
building, and store construction.
8.1 LAND USE PLAN
Table3. Land use plan of the project
[Link] s/no Description Ha of land
1 Animal feed production 3ha
2 Animal feed processing 0.5ha
3 Health service area 0.5ha
4 Animal grazing and quarantine 2ha
5 Animal shed construction, admin building, and store 1ha
construction
Total 6ha

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8.2 PRODUCTION CAPACITY AND SALE REVENUES

Table: 4 Estimation of Production capacity and sales revenue for milk productions in
the following assumptions
 Price of milk/litre year 1-120birr,year-2=130birr,year-3=140 ,year-4=150birr
 Average milk production per cow is 16L/day
 Cows shall give milk for 300 days a year @ of 16L milk/day.

Year Number of milk cows Expected Total Price/ Revenue from

Yield/milk yield/year litre sales
cows/day
2023 50 /milking cows 48 16*300 230,400 litre 120 27,648,000.00
2024 70/milking cows 68 16*300 326,400 litre 130 42,432,000.00
2025 90/milking cows 88 16*300 422,400 litre 140 59,136,000.00
2026 100/milking cows 96 16*300 460,800 litre 150 69,120,000.00
Total 198,336,000.00

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Table: 5 Estimation of Production capacity and sales revenue for animals (calf and cows) and Manure
Assumptions:
 10 young animals are sold annually from Year 3 @ of birr. 150,000/animal.
 5 Cow will be sold annually @ birr 200,000 from Year 4
 Sale of Manure birr. 25,000/year in Yr - 1 & birr. 55,500/year from Yr - 2.
Year Description Total no. Price Revenue Total revenue
Animals from sales
2023 Calf - - - 25,000.00
Milk cows - - -
Manure - - 25,000
2024 Calf - - - 55,500.00
Milk cows - - -
Manure - - 55,500
2025 Calf 10 150,000 1,500,000 2,575,000.00
Milk cows 5 200,000 1,000,000
Manure - - 75,000
2026 Calf 10 150,000 1,500,000 2,600,000.00
Milk cows 5 200,000 1,000,000
Manure - - 100,000
Total 5,255,500.00

Table 6. Summary of revenues from product sales

Years Sales from product sales of Total revenue
Milk Calf Cows Manure
2023 27,648,000.00 1,500,000 1,000,000 25,000
30,173,000.00
2024 42,432,000.00 1,500,000 1,000,000 55,500 44,987,500.00

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 DEREJE TAFESE DAIRY FARM PROJECT

2025 59,136,000.00 1,500,000 1,000,000 75,000 61,711,000.00

2026 69,120,000.00 1,500,000 1,000,000 100,000 71,720,000.00

Total 198,336,000.00 6,000,000 4,000,000 225,500 208,591,500.00

8.3 IMPLEMENTATION SCHEDULE

The project will be implemented cautiously in a planned manner. The
implementation will be staggered.
Activities Yr -1 Yr -2 Yr -3 Yr -4 Yr -5
Construct sheds & store, fencing, bio-gas,
water tank
Develop Fodder
Purchase 25Cows
Purchase 25 Cows
Purchase Deep freeze
Purchase cream separator cum butter churner
Sale 20 young heifer/bull every year
Replace 10 milking cow every year

Fodder development will take time. It needs at least one growing season of 6
months. For this reason the purchase of cows shall be staggered.

The first 25 cows will be purchased in 2nd quarter of 1st year after the structures
are ready. They will be fed with crop residues and fodder already available in the
farm along with the purchased feed concentrates.

The last 25 cows will be purchased in the 4 th quarter of 1st year, when enough
fodder, hays and silage are stocked, experience in managing cross bred Jersey

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 DEREJE TAFESE DAIRY FARM PROJECT
cows, particularly in terms feeding and health, is gained and record keeping is
learnt as well as other associated factors are better understood.

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 DEREJE TAFESE DAIRY FARM PROJECT

9. FINANCIAL PLAN
a. INITIAL INVESTMENT COST

The initial investment cost of the project is 48,000,000.00, which includes:

50 Cows birr. 10,000,000

Structure: birr. 15,000,000
Equipment: birr. 7,000,000.00
Establishment: birr. 16,000,000.00

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The Cost Break-up of Initial Investment Cost is:

S. Approx. Total Amount
Particulars Quantity

N. birr/Unit (birr)
I. Cows
1 Cost of Cows 50 200,000 10,000,000.00
II. Structure
1 Cost of cow shed, calf shed, store and
dung pit 1 575,000 575,000.00

2 Fencing 1 50,000 50,000.00

3 Water tank: 10,000 L Cap & conc stand 1 60,000 60,000.00
4 Bio-gas plant 1 70,000 70,000.00
Sub-Total 15,000,000.00
III. Equipment
1. Chaff Cutter 1 20000 20,000.00
2. Milk Cans (5, 10, 20 and 40 lit. cap etc..) 1set 30000 30,000.00
3. Cream Separator cum Butter Churner 1 52000 52,000.00
4. Deep Freezer/ Refrigerator (250 liter) 1 90000 90,000.00
Sub-Total 7,000,000.00
Total Capital Cost 32,000,000.00
IV. Establishment Cost
1 Insurance (20 % of cost of Cows) 5 16,000 80,000.00
2 Transport Cost 5 5,000 25,000.00
3 Feeding cost during quarantine period 5 2,000 10,000.00
4 Labour cost for fodder development 20 500 10,000.00
Sub-Total 16,000,000.00
Total Project Cost 48,000,000.00
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 DEREJE TAFESE DAIRY FARM PROJECT
Assumption: The seeds/ plants and fertilizers for establishing fodder bank shall be
provided by the DLSO free of cost.
10. HUMAN RESOURCE PLAN
The manager is literate and able to keep farm record and ensure hygiene and
sanitation. The family members fully engaged in farming will be used for
operating the enterprise. 18 additional workers are needed or hired.
a. PROFIT AND LOSS ACCOUNT

The profit and loss account/annual income statement is worked out for 8 years till
the loan amount is fully liquidated.

The assumptions considered in determining the profit and loss account includes:
I. 48 Cows out of 50 in the 1st year,68 Cows out of 70 in the 2nd year,88 Cows out of 90
in the 3rd year,96 Cows out of 50 in the 4th years will be in milking stage at all times.
II. Average milk production per cow is 16L/day
III. Cows shall give milk for 300 days a year @ of 16L milk/day.
IV. The milk price is birr. 120.00,130 ,140,150 per litre 1st ,2nd,3rd and 4th year
respectively.
V. On average 3 kg concentrate/AU/day shall be fed.
VI. The feed is priced at birr. 40/kg.
VII. Labour cost is accounted at birr. 10,000/month/person x 10.
VIII. 10 young animals are sold annually from Year 3 @ of birr. 100,000/animal.
IX. 5 Cow will be sold annually @ 80,000 from Year 4
X. Saving from Bio-gas: birr. 30,000/year from Year-2
XI. Sale of Manure birr. 25,000/year in Yr - 1 & birr. 55,500/year from Yr - 2.
XII. Depreciation of Structures @ 10 % spread over a period of 20 years.
XIII. Depreciation of equipment @ 10 % spread over a period of 10 years.
XIV. Mortality: not accounted

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Cost Benefit Analysis

I Cost

S.
Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
N.
1 Repayment of
100000 100000 100000 100000 100000 100000 100000 100000
Loan

2 Depreciation of
75,500 67,950 61,155 55039.5 49535.5 44,582 40124 36,111
Structure

3 Depreciation of
19200 17280 15552 13997 12597 11337 10204 9183
Equipment

4 Interest on
58880 56525 54264 52093 50009 48009 46088 44245
Loan

5 Concentrate
98550 219000 219000 219000 219000 219000 219000 219000
Feed

6 Animal
240,000 240000 240000 240000 240000 240000 240000 240000
attendant

7 Fodder
10000
Development

8 Miscellaneous 5000 5200 5408 5625 5849 6083 6326 6579

A Total Cost 607130 705955 697379 685754.5 676990.5 669011 661742 655118

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II Income

S.
Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 N.
1 Sale of fresh milk
480,000 960,000 960,000 960,000 960,000 960,000 960,000 960,000

2 Sale of old cows

0 0 50,000 50000 50000 50000 50000

3 Sale of young
0 0 80000 80000 80000 80000 80000 80000
stock

4 Sale of
15000 37500 37500 37500 37500 37500 37500 37500
manure

5 Bio-Gas 8000 20000 20000 20000 20000 20000 20000 20000

B Total Income 503,000 1017500 1097500 1147500 1147500 1147500 1147500 1147500
III Profit/Loss
-104130 311545 400121 461745.5 470509.5 478489 485758 492382
(B-A)

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10. Loan payment schedule

BANK LOAN SCHEDULE

Table: 15. Bank Loan Schedule
Loan Duration: 5 Years
Number of Payments: 60
Interest Rate: 11.5%
Monthly Payment: Birr 600,000.00
No. Paymen Total Amount Principle Interest Total
t Year Bank Loan Payment Payable Payment
0 2024 36,000,000.00
1 2025 28,800,000.00 7,200,000.00 4,140,000.00
11,340,000.00
2 2026 21,600,000.00 7,200,000.00 3,312,000.00
10,512,000.00
3 2027 14,400,000.00 7,200,000.00 2,548,800.00
9,748,800.00
4 2028 7,200,000.00 7,200,000.00 1,656,000.00
8,856,000.00
5 2029 0.00 7,200,000.00 828,000.00
8,028,000.00

Note: the proceed is assumed to be granted with six months elegance period; hence
a small variation in the loan schedule is predictable

Government clearance
i. National Environment Commission (NEC)
The cow dung is a major source of the Methane (CH 4), which is a potent Green
House Gas (GHG). To mitigate the emission of the Methane (CH4) gas into the
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atmosphere, the Bio-gas plant is integrated to this enterprise. The Bio-gas plant
will enable to make use of Methane Gas for cooking purpose instead of letting it to
the atmosphere for damaging the Ozone Layer causing global Warming and
climate change.

ii. National Land Commission (NLC)

The enterprise will be executed entirely on registered private land.

iii. Forest clearance

The nearest forest boundary is more than a kilometer away. No debris shall be
burnt. All debris will be converted into compost. There will no felling of bushes or
trees.

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iv. Livestock Rules and Regulation

The enterprise will comply with Livestock Rules and Regulation and every activity
will be executed as per the advice of the Department of Livestock.
11. Monitoring and Evaluation

District Livestock Service Office (DLSO) will be the advisor as well as oversight
agency to monitor the operation and management of the enterprise. DLSO will be
welcomed to monitor the enterprise as the sole financer of the enterprise. To the
monitoring team all the records shall be made available and feedback will be
sought and comply with all necessary recommendations.

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