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China to Extend $ 1.4 Billion Loan for Ethiopian Railway Project

Chinese financiers have agreed to loan 1.4 billion US dollars for the Ethiopian railway project. A team that was sent to China returned last week with the news from Beijing. The team compromised of representatives from the National Bank of Ethiopia and the Ministry of Finance and Economic Development.

The agreement reached is said to be a milestone in financing the railway project. The team is yet to announce the terms of the loan including the period of payment and interest. It is possible that the amount of the loan can be higher depending on the outcome of follow up meetings according to senior official from MOFED.

The signing ceremony is scheduled for January 2013 as currently anticipated. If the final agreement is signed by the prime ministers of both countries it will be the largest bilateral loan for Ethiopia.

The railway project of Ethiopia aims at connecting the major cities of the country has already secured 4.81 billion dollars in loans with the majority of loans coming from the  Chinese Import-Export Bank.

The railway project calls for a total of 4,744Km railway is to be constructed in the country by 2014/15. Out of the total 2,395Km of a railway is to be finalized by the Ethiopian Roads Corporation, which oversees the construction of the project.

Source: Fortune