Ethiopia’s House of People’s Representatives has formally approved a $738.2 million loan for South Sudan, aimed at financing a crucial cross-border highway linking the two nations. This decision, made during the fourth regular session of the House, solidifies a 2023 agreement that will see the construction of a 220-kilometer road designed to improve trade and connectivity between Ethiopia and South Sudan.
The terms of the loan stipulate that South Sudan will repay the amount over a period of ten years, with a five-year grace period. Repayments are to be made either in cash or in crude oil, to be transported to Port Sudan.
The loan agreement is a continuation of efforts to enhance bilateral relations and infrastructure. In May 2023, Ethiopia’s State Minister of Finance, Eyob Tekalign, and South Sudan’s Finance Minister, Dr. Dier Tong Ngor, signed an initial deal for the Paloch-Mathiang-Maiwut-Pagak road project. This project is seen as a vital step toward fostering economic growth and greater cooperation between the two neighboring countries.
In June 2024, South Sudan’s National Legislative Assembly also ratified the agreement, signaling its commitment to the road project and the positive impact it is expected to have on regional trade and development.
