Ethiopia, Creditors Agree on 8.4 Billion USD Debt Restructuring

Addis Ababa, March 21, 2025 (ENA)—Ethiopia has reached Agreement in Principle (AIP) with its Official Creditor Committee (OCC) on the main financial parameters of a debt treatment under the G20 Common Framework, covering approximately USD 8.4 billion of outstanding public debt.

In a statement it issued today, the Ministry of Financestated that in the context of a financing package already agreed with the IMF, Ethiopia has committed to negotiate with its external creditors a debt treatment delivering USD 3.5 billion reduction in debt service over the program period, and restoring debt sustainability on an ongoing basis.

The AIP with the OCC goes a long way in achieving these objectives, with a debt service relief totaling approximately USD 2.5 billion over the period 2023-2028, and a significant smoothening of Ethiopia’s external redemption profile with a material reduction of its cost, it added.

Ethiopia commends the leadership of its OCC co-chairs, China and France, as well as the support and cooperation of all OCC members in reaching this agreement, the statement said.

According to the press release, the government is confident that this debt treatment will allow for the allocation of additional financial resources towards critical public investments in the context of Ethiopia’s Perspective Development Plan.

The agreement will support ongoing good faith engagement with external commercial creditors, including bondholders.

In that regard, Ethiopia would like to reaffirm its commitment to transparency, comparable treatment of all participating external creditors, and full compliance with debt sustainability targets under its IMF-supported program.

Meanwhile, Finance Minister Ahmed Shide said that the agreement marks a significant milestone in the efforts to normalize the nation's relations with international partners and deliver economic stability to the Ethiopian people.

The terms of the AIP will be further described and formalized in a Memorandum of Understanding between Ethiopia and its official bilateral creditors, which will then be implemented through bilateral agreements with each member of the OCC, it was learned.