Ethiopia has extended a $738 million loan to South Sudan for a 220-kilometer cross-border road project connecting both countries. The loan repayment will be sourced from South Sudan’s crude oil sales. This initiative aims to enhance connectivity and economic collaboration between the two nations while fostering diplomatic relations.
Ethiopia has taken a significant step towards strengthening its ties with South Sudan by providing a substantial loan of $738 million for a crucial cross-border project. This undertaking involves the construction of a 220-kilometer road that will connect key border areas of South Sudan, including Paloich, Maiwut, and Pagak, to Ethiopia. The repayment of this loan is strategically linked to the crude oil sales from South Sudan to Ethiopia, ensuring a fiscal approach that supports both nations’ economic growth.
The establishment of this road infrastructure is pivotal as it aims to enhance connectivity and foster economic collaboration between Ethiopia and South Sudan, Africa’s youngest nation. The agreement stems from a broader framework of financial diplomacy established in May 2024, which emphasizes cooperation in development and infrastructure financing. Ethiopian contractors and consultants will oversee the construction, indicating strong involvement and support from Ethiopia in South Sudan’s developmental aspirations.
In conclusion, this loan not only represents a significant financial commitment but also symbolizes the growing diplomatic relationship between Ethiopia and South Sudan. The strategic partnership set forth through the road project is expected to facilitate trade, bolster economic exchanges, and serve as a model for other African nations seeking to utilize resource-backed financing for infrastructure initiatives.
Original Source: africa.businessinsider.com
