Gambela’s new tag as a land grabbing hub comes as BHO Agro Plc becomes the third Indian firm to begin operations in the region after two other Indian companies, Karuturi and Ruchi Group, moved into Gambela in 2008 and early 2010, respectively.

Official reports have indicated that Ethiopia’s Ministry of Agriculture and Rural Development, responsible for the regulation of land acquisition by foreign entities, has allowed the lease of 27,000 hectares of land to BHO Agro Plc.

The size of the property, on which BHO Agro Plc plans to grow bio-fuel seed, observers say, is almost half the size of the Horn of Africa country’s capital city, Addis Ababa.

In 2008, Karuturi became the first Indian company to lease 300,000 hectares of land [an area larger than Luxembourg], in Gambela, for the production of wheat which is to be exported to its home country.

Like BHO Agro, Ruchi Group, the second Indian firm to take advantage of the Gambela land grab, is expected to cultivate bio-fuel seeds on its allotted 25,000 hectares of land.

Several companies and governments have so far made land deals with the central government. Early this year, the Ethiopian Government approved the lease of 22,000 hectares of land to the National Bank of Egypt (NBE).

Neighbouring Djibouti has also acquired 3,000 hectares of land in Bale, whilst Saudi Star Plc, a company established by billionaire Sheikh Mohamed Al Amudi, an Ethiopian born Saudi national, also received 10,000 hectares of land in the region to grow and export rice to Saudi.

According to Ethiopian authorities, the land grabs will have a significant economic benefit. But critics have slammed the government for using the Gambela region as a commercial farming center.

Meanwhile, analysts argue that the concentration of foreign companies in one region could impact local farmers negatively and also risks whipping up controversy among riparian countries of the Nile basin owing to the region’s only water resource, Baro river, an important tributary of the White Nile.