Ethiopia: Billions in Chinese Loans for Rail, Ships, Housing

An Ethiopian delegation, led by Sufian Ahmed, minister of Finance and Economic Development (MoFED), returned from China after a successful negotiation for loans on the order of billions of dollars for large government projects, which are in the pipeline.

The projects include a light rail line in Addis Abeba, undertaken by the Railway Corporation; the installation of a new Ethio-Djibouti Railway Line; the purchase of nine vessels for Ethiopian Shipping Lines (ESL); and the construction of 200 buildings by the Ethiopian Housing Corporation (EHC).

The delegation included Hailemichael Kinfu, core process owner of External Resource Mobilisation; Wasihun Abate, Legal Department head; and Getachew Bekure (PhD), director general of the Railway Corporation, all under the MoFED.

The city railway project, known as Light Rail Transit Project, will include two lines, one reaching from Ayat through Tor Hayloch (Army Hospital) to Jimma Ber, and the other from Shiro Meda to Kality. The total length is expected to be 300km.

The other rail project is a 656km train track which will be part of the new Ethio-Djibouti Railway Line. Four companies have signed a memorandum of understanding with the Ethio-Djibouti Railway Corporation to undertake their own feasibility studies. These include an Indian company, Overseas Infrastructure Alliance (OIA); two Chinese companies, China Communication Construction Company (CCCC) and China Railway Group (CRG); as well as a Russian company. This line is estimated to cost 1.5 billion Br.

The long-term vision of the government of Ethiopia is to set up 5,000km of railway lines nationwide.

ESL also plans to acquire seven multipurpose ships and two oil tankers, which are expected to cost 290 million dollars.

The fourth project is the construction of 200 buildings for residential housing. Each building will be 25 to 30 storeys high. The design was completed a year ago by a Chinese company. The construction could not be started, however, because of the lack of foreign currency for the import of required materials.

The project will be undertaken by the EHC, which was established for this purpose. The Ministry of Works and Urban Development (MoWUD) has requested the MoFED for a budget of 200 million Br to fully organise the corporation in 2010/11, which is likely to be approved according to a budget expert at the ministry.

“If the foreign currency is secured from China,” said an official at the ministry, “the Corporation could commence work using the 600 million Br for the Government Houses Agency.”


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