Ethiopia has issued a $738 million loan to South Sudan for a 220-kilometer road project, which will enhance connectivity between the two countries. The loan repayment will be derived from South Sudan’s crude oil exports to Ethiopia. This initiative strengthens diplomatic ties and aims to support economic growth in the region.
Ethiopia has significantly bolstered a pivotal cross-border initiative by extending a $738 million loan to South Sudan intended to finance the construction of a 220-kilometer road. This infrastructure project will forge critical connectivity between the neighboring countries, linking South Sudan’s border areas of Paloich, Maiwut, and Pagak to Ethiopia. The loan’s repayment will be sourced from South Sudan’s crude oil exports to Ethiopia, facilitating a mutually beneficial economic partnership that is poised to enhance bilateral relations.
The cross-border project exemplifies the growing financial diplomacy between Ethiopia and South Sudan, particularly following their May 2024 agreement which laid the foundation for this collaboration. With South Sudan being Africa’s newest country, the road construction plays a pivotal role in bolstering trade and logistics infrastructure in the region. Ethiopian contractors and consultants are designated to undertake the construction, establishing a model for future resource-backed infrastructure financing across the continent.
In summary, Ethiopia’s endorsement of this loan to South Sudan marks a significant step forward in the development of bilateral relations, emphasizing cooperation in infrastructure development. This strategic venture will not only support South Sudan’s economic growth but also illustrate a framework for successful resource-backed financing in Africa. The potential for improved connectivity offers promising prospects for both nations.
Original Source: africa.businessinsider.com
