The Council of Ministers approved requests for Ethiopia to receive USD 1.13 billion in foreign loans. The decision was passed at the 99th regular meeting of the council that was held today.
The loans are going to be used to finance four development projects that the government is undertaking.
As such, Ethiopian Electric Power is going to receive USD 500 million for its efforts to address electricity accessibility, especially in rural areas. Furthermore, the financing is going to be used to ensure that development areas, such as industrial parks receive enough power for their operations without fluctuations.
The second loan is a USD 250 million loan to be used for the improvement of public services. Some of the issues to be addressed are local level healthcare, education, agriculture, and water access.
A USD 180 million loan, on the other hand, is going to be used to finance small and medium enterprises through the administration of the Ethiopian Development Bank.
The last loan is a USD 200 million loan that is going to go towards modernising the country’s communications and information sectors, integrating economic, social, and other aspects of society.
All the loans are interest free and come with a 6 year grace period. The National Bank of Ethiopia is going to charge a 0.75 percent fee for administering the loans, which comes out to approximately USD 78 million. The loans are expected to be repaid in full in 38 years.