China Loans Ethiopia $500 Million For Development

China has lent Ethiopia US$ 500 million that will be used to fund various development projects in the Horn of Africa country.

The loan agreement signed with the Chinese Export and Import Bank was part of the deals struck during Ethiopian Prime Minister Meles Zenawi’s ongoing visit to China, which started last Thursday.

Ethiopian Finance and Economic Development Minister, Sofian Ahmed who signed the agreement with his Chinese counterpart said the loan will be used to implement 15 development projects.

“The projects to be implemented have already been finalised and will be discussed with the Chinese government,” Ahmed said.

Meles is visiting China to encourage Chinese investors to consider setting up businesses in his country and also to scout for loans to finance development projects.

Ethiopia recently launched a multi billion five year Growth and Transformation Plan (GTP) that will see the implementation of various development projects aimed at fighting poverty and reducing unemployment.

Under the five year GTP, the government, among other plans, seeks to invest billions of dollars on hydro electric plants, fertiliser factories, the development of universities and the construction of around 2,000 kilometer railway lines, as well as thousands of kilometres asphalt roads.

The government recently launched US$ 5 billion hydro electric projects, expected to generate around 5,250 MW of power by 2015, over the Nile River.

Ethiopia has already started power supply to Djibouti and is also planning to start exporting power to Sudan (North) before the end of the year.

The Horn of Africa nation plans to become Africa’s biggest power supplier.

China has given Ethiopia about US$4 billion in loans that have gone towards telecommunication infrastructure and road projects among others.

More than 20,000 Chinese area already working in various development projects around the country.