**Appendix: Detailed Supporting Documentation for Boaz Trading PLC’s Business Plan**
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### **1. Import Contracts**
**Overview**: Legal agreements outlining terms with suppliers (Rosneft, KazMunayGas) to ensure compliance, reliability, and risk mitigation.
#### **Key Clauses & Components**:
- **Parties Involved**: Boaz Trading PLC (Ethiopia) and suppliers (Rosneft, KazMunayGas).
- **Product Specifications**:
- Ultra-low-sulfur diesel (ULSD) ≤10ppm, Euro V gasoline (95 octane), Jet A-1 fuel.
- Compliance with Ethiopian Standards Agency (ESA) and international benchmarks (ASTM, ISO).
- **Volumes & Pricing**:
- **Year 1**: 50,000 barrels/month from Russia at $70/barrel (CIF Djibouti).
- **Year 2**: 70,000 barrels/month (70% Russia, 30% Kazakhstan).
- Barter clause: 20% of payments in Ethiopian coffee/flowers (valued at global market rates).
- **Delivery Terms**:
- Incoterms: CIF Djibouti Port (suppliers cover costs until Djibouti).
- Lead time: 15–20 days from Novorossiysk, Russia.
- **Force Majeure**:
- Covers sanctions, port closures, or political unrest; triggers backup supply from Kazakhstan.
- **Payment Terms**:
- 50% advance via letter of credit (Commercial Bank of Ethiopia), 50% post-delivery.
- **Dispute Resolution**:
- Arbitration under Ethiopian Trade Law in Addis Ababa.
**Compliance**:
- Sanctions Mitigation: Contracts exclude entities under OFAC/EU sanctions.
- Ethiopian Trade Law: Reviewed by DLA Piper Ethiopia.
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### **2. Feasibility Study**
**Objective**: Validate the economic, operational, and regulatory viability of the Russian Oil Deal.
#### **Market Analysis**:
- **Demand**:
- Ethiopia’s annual fuel consumption: 4.2B liters (95% imported).
- Projected growth: 6% CAGR (2023–2030).
- **Competitive Pricing**:
- Boaz diesel: ETB 45/liter vs. competitors’ ETB 50–52/liter.
- Cost advantage: 20–30% discounts on Russian crude.
#### **Supply Chain Logistics**:
- **Routes**:
- Primary: Novorossiysk (Russia) → Djibouti Port → Ethio-Djibouti Railway → Addis Ababa.
- Backup: Tengiz (Kazakhstan) → Berbera Port (Somaliland) → Trucking.
- **Costs**:
- Shipping: $15/barrel (Russia–Djibouti).
- Last-mile delivery: ETB 1.2/liter (AI-optimized routes).
#### **Financial Projections**:
| **Metric** | **Year 1** | **Year 2** |
|----------------------|------------------|------------------|
| Revenue | ETB 33M | ETB 55M |
| Gross Margin | 25% | 30% |
| Net Profit | ETB 8.25M | ETB 16.5M |
#### **Risk Assessment**:
- **SWOT Analysis**:
- Strengths: Russian pricing, hyperlocal distribution.
- Weaknesses: Forex volatility, regulatory complexity.
- Opportunities: Ethiopia’s energy deficit, LPG expansion.
- Threats: Geopolitical sanctions, Djibouti bottlenecks.
- **PESTLE Analysis**:
- Political: Ethiopia’s tax incentives for energy importers.
- Economic: ETB depreciation (12% in 2023).
- Social: Urbanization driving fuel demand.
- Technological: IoT logistics tracking.
- Legal: ESA/Ethiopian Customs Commission compliance.
- Environmental: Low-sulfur fuels aligning with CRGE strategy.
**Sensitivity Analysis**:
| **Scenario** | **Revenue Impact** | **Net Profit Impact** |
|-----------------------|--------------------|-----------------------|
| ETB depreciates 15% | -10% | -20% |
| Oil prices +10% | -8% | -15% |
| Demand +20% | +25% | +30% |
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### **3. ETB/USD Exchange Rate Analysis**
**Objective**: Mitigate forex volatility risks impacting import costs.
#### **Historical Trends**:
- **2021–2023**: ETB depreciated from 45 ETB/USD to 56 ETB/USD (-24%).
- **Drivers**:
- Low forex reserves ($3.3B as of 2023, covering 1.2 months of imports).
- Inflation (33% in 2023).
#### **Forecasts**:
- **2024–2026**:
- National Bank of Ethiopia projection: 58–62 ETB/USD.
- IMF outlook: Stabilization post-debt restructuring (2025).
#### **Hedging Strategies**:
- **Forward Contracts**: Lock in rates for 60% of import costs at 58 ETB/USD.
- **Natural Hedging**: Negotiate USD-denominated sales (e.g., Ethiopian Airlines jet fuel).
- **Diversification**: Hold 20% of reserves in EUR/CNY to reduce USD dependency.
#### **Impact Analysis**:
| **ETB/USD Rate** | **Import Cost (Year 1)** | **Net Profit (Year 1)** |
|-------------------|--------------------------|-------------------------|
| 56 | ETB 24.75M | ETB 8.25M |
| 60 | ETB 26.4M | ETB 6.6M |
| 62 | ETB 27.5M | ETB 5.5M |
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### **Supporting Documents**:
- **Import Contracts**: Redacted templates (confidentiality maintained).
- **Feasibility Study Data Sources**:
- Ethiopian Petroleum Supply Enterprise (EPSE) reports.
- World Bank’s Ethiopia Economic Update (2023).
- **Exchange Rate Data**:
- National Bank of Ethiopia forex bulletins.
- IMF Article IV Consultation (2023).
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**Conclusion**:
This appendix provides robust validation of Boaz Trading’s business model, addressing legal, financial, and operational risks. By anchoring strategies in data-driven feasibility and proactive risk management, Boaz is positioned to disrupt Ethiopia’s energy sector sustainably.