NAIROBI, – Ethiopia’s finance ministry said it had reached an agreement with China on debt treatment, reaffirming both nations’ commitment to progress within the G20 Common Framework to formalise a bilateral deal.
Ethiopia faces mounting legal challenges from bondholders planning to sue the government following resistance from bilateral creditors to a preliminary arrangement to restructure the nation’s $1 billion Eurobond.
The dispute could prolong Ethiopia’s emergence from external debt default.
The finance ministry said in a post on Facebook that the resolution was reached during a meeting between Ethiopian and Chinese finance ministers held in China.
Discussions included “debt restructuring, implementation of ongoing projects, and new financing opportunities,” as well as plans for the development of a new Bushoftu International Airport.
“The two sides reached a resolution on the debt treatment and reaffirmed their commitment to working constructively within the G20 Common Framework parameters toward signing the bilateral agreement,” the statement added.
Ethiopia announced in 2021 that it would seek to restructure its sovereign debt under the G20 initiative, after its finances were severely impacted by COVID-19 pandemic.
In 2023, the East African nation defaulted on its $1 billion Eurobond following a missed $33 million coupon payment.
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