Ethiopia’s Ministry of Finance will assume the debt of the Ethiopian Railway Corporation after restructuring negotiations with Chinese creditors reached a final stage, giving the state owned enterprise a major financial reset.

The move follows prolonged pressure from loans linked to the Addis Ababa Djibouti railway and light rail projects, which the corporation has struggled to service from its own revenue. The liabilities will now be transferred to the Ministry of Finance and reflected in the budget document for the coming fiscal year.

ERC, one of eight state-owned enterprises under Ethiopia Investment Holdings, is reported to be carrying losses of Birr 264 billion. The restructuring process, focused largely on debt owed to China, is expected to replace temporary payment pauses with a longer-term repayment arrangement.

The debt transfer is intended to ease ERC’s balance sheet and allow the corporation to concentrate on infrastructure maintenance, completion of ongoing projects, and new financing options, including private investment.

The Ministry of Finance has allocated Birr 463.4 billion for debt servicing in the 2025/26 fiscal year. Meanwhile, ERC is pursuing wider commercial activities, including logistics, multimodal transport, and the redevelopment of its La Gare headquarters site in central Addis Ababa.

Source: Capital Ethiopia Newspaper