Ethiopia and France have signed agreements covering debt restructuring and financial support linked to Ethiopia’s ongoing economic reform program.

The agreements were signed in Addis Ababa by Ethiopia’s Minister of Finance Ahmed Shide and France’s Minister Delegate for Europe and Foreign Affairs Eléonore Caroit.

A key component of the signing was Ethiopia’s first bilateral debt restructuring agreement with a member of the Official Creditor Committee (OCC) under the G20 Common Framework, marking a step in Ethiopia’s external debt treatment process. Ethiopia defaulted on its external debt in December 2023.

As part of the same engagement, France announced additional financing totaling Euro 81.5 million, including Euro 80 million in budget support for Ethiopia’s Homegrown Economic Reform (HGER 2.0) program and Euro 1.5 million in technical assistance. The support follows France’s earlier contribution of Euro 100 million during the first phase of Ethiopia’s reform program.

The discussions also included continued cooperation through French development institutions such as Agence Française de Développement (AFD) and PROPARCO, which have supported infrastructure related initiatives in Ethiopia. The two sides also discussed possible French involvement in the construction of Ethiopia’s planned new international airport.

Reuters reported that Ethiopia’s broader restructuring agreement with official creditors, chaired by China and France, is expected to provide cash-flow relief of USD 3.5 billion, while Ethiopia’s Eurobond holders have indicated they may pursue legal action over delays in reaching a separate restructuring deal.

Source (including image): Ethiopian News Agency

Additional source: CNBC Africa