Ethiopia has granted South Sudan a $738 million loan to construct a 220-km cross-border road, projected to bolster connectivity between the two nations. Loan repayment will be derived from South Sudan’s crude oil sales. Ethiopian contractors will oversee the project, which includes a four-year grace period and a ten-year repayment plan.
Ethiopia has extended a significant financial lifeline to South Sudan by approving a $738 million loan dedicated to the construction of a 220-kilometer cross-border road. This vital infrastructure project aims to connect key border regions of South Sudan, particularly the areas of Paloich, Maiwut, and Pagak, to Ethiopia’s own border territories. It is anticipated that the completion of this road will enhance connectivity and bolster trade relations between the two nations. The repayment of the loan will be facilitated through revenues generated from South Sudan’s crude oil sales to Ethiopia. This arrangement not only provides a practical financial solution for South Sudan but also reinforces diplomatic bonds between the two countries by aligning their economic interests. The construction will be overseen by Ethiopian contractors and consultants, showcasing Ethiopia’s commitment to supporting infrastructure development in its neighbor. Noteworthy is that the financial agreement also includes a four-year grace period and a ten-year repayment plan, establishing a sustainable financial framework for South Sudan’s economic upliftment. This initiative reflects a larger trend in Africa, where resource-backed financing models are becoming increasingly popular for infrastructure projects.
The cross-border project between Ethiopia and South Sudan marks a significant development in the region, underscoring the importance of infrastructure in promoting trade and economic growth. South Sudan, as Africa’s newest nation, faces numerous developmental challenges, including limited road connectivity. The agreement formalizes an understanding reached in May 2024, wherein both nations aimed to foster financial diplomacy and complement each other’s economic strengths.
In summary, the $738 million loan from Ethiopia to South Sudan for the construction of a vital cross-border road represents a significant stride towards enhancing regional connectivity and cooperation. The project not only facilitates infrastructure development but also provides a model for sustainable financing in Africa. Through this partnership, both nations are poised to strengthen their economic ties while paving the way for future collaborative efforts.
Original Source: africa.businessinsider.com
