Addis Ababa, Ethiopia – The Korean government has agreed to provide $2 billion in financing for eight key development projects in Ethiopia over the next two years. This funding will be facilitated through Korea’s Economic Development Cooperation Fund (EDCF) via its executive agency, EXIM Bank.
The announcement comes after the Ethiopian government, on May 21, 2024, submitted a list of priority projects to be financed under the EDCF. After extensive discussions between EXIM Bank and the Ethiopian Ministry of Finance, eight projects were selected to be implemented within the two-year period.
Jung Kang, the Korean Ambassador to Ethiopia, commented on the agreement, emphasizing that the Ethiopian government has the prerogative to detail each project. The focus areas include infrastructure development, healthcare facilities, and electricity transmission lines.
“The Ethiopian government provided us with a list of projects they seek loans for. However, this agreement builds on a memorandum of understanding signed during Prime Minister Abiy Ahmed’s visit to Korea, which allows the Korean government to lend up to $10 billion to Ethiopia over five years. This amount may be increased if more projects that align with our goals are presented,” Ambassador Kang stated.
He highlighted that the two governments must first finalize the specifics of each project before financing can be disbursed.
During a recent visit by a Korean government delegation to Addis Ababa, the projects were discussed in detail. The delegation and Ethiopian representatives agreed on new project designs, committing to provide up to $1 billion per year in financing.
Ambassador Kang also clarified that the financing from Korea to Ethiopia would primarily come in the form of loans, with additional support provided through joint ventures. The Ministry of Finance indicated that transportation and energy sectors would be key areas for Korean investment, with a particular emphasis on the Bus Rapid Transit (BRT) project, which is part of Ethiopia’s push to improve public transport.
This major financing agreement further strengthens the longstanding economic ties between Korea and Ethiopia, with a shared commitment to boosting Ethiopia’s infrastructure and energy capabilities.
