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China in $1.8bn electricity deal with Ethiopia

By Peter Wakaba

Work to resolve a crippling power shortage on East and Central Africa’s only electric standard gauge railway may soon start in earnest following the signing of a $1.8bn (£1.4bn) deal between China and Ethiopia.

China has played a huge role in improving infrastructure in Ethiopia and other African states
China has played a huge role in improving infrastructure in Ethiopia and other African states (Getty Images)

In a tweet, Ethiopian Prime Minister Abiy Ahmed’s office said China had agreed to invest the money to improve power on the line between Ethiopia and Djibouti, and to boost electricity supply to Ethiopian cities and up to 16 industrial parks.

The deal was reached on the sidelines of the Belt and Road Initiative Forum, which Mr Abiy and a string of other leaders are attending in China’s capital, Beijing.

The signing of the deal came almost immediately after an announcement that China had offered Ethiopia a reprieve on some of the debt it had accrued to the end of 2018.

The scope of the reprieve remains unclear, with Mr Abiy’s office sending out conflicting messages on Wednesday.

Data from the China-Africa Research Initiative shows Ethiopia owes Beijing $13.73bn.

Ethiopia is not the first country in Africa to have its Chinese loan burden lifted. Earlier this year, China “forgave” $78m owed by Cameroon. BBC News

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