Council of Ministers Approves Loan Agreemets worth $1.13 Billion

ADDIS ABABA – The Council of Ministers has passed decisions on two areas, including approving four loan agreements signed with the World Bank, during its 99th regular session on Wednesday.

In a statement today, the Prime Minister Office said the Council first discussed the four loan deals worth 1.13 billion US dollars signed with World Bank’s International Development Association (IDA) this year.

Anong the four, the 500 million US dollars loan deal, signed between the Ministry of Finance and the World Bank on April 23, is the biggest financial agreement.

The loan is expected to finance country’s goal to achieve universal electricity access by 2025.

The statement says the government will use it support efforts to improve electricity access to the public and public institutions as well as address the prevailing electricity deficit in rural parts of the country where people are dependent on biomass and kerosene.

The second highest loan deal that the Ministers discussed on was signed with the IDA on June 5, and is worth 250 million US dollars.

It will be spent on strengthening country’s basic services delivery system, said the PM office, adding priority will be to create equitable access in health, education, rural road and agricultural services at the Woreda level.

Support for Digital Economy, SMEs

Today’s Abiy Ahmed’s cabinet meeting also looked into the 200 million and 180 million US dollars loan agreements signed with the World Bank on May 7 and April 23, respectively.

The first one, the statement says, will finance Ethiopia’s push to have an inclusive digital economy and boost government’s capacity to deliver digital services in public institutions.

The 180 million  US dollars loan deal, on the other hand,  will be key to ease one of the major challenges of Ethiopian small and medium micro institutions – access finance. The fund will be managed by the Development Bank of Ethiopia, the PM Office said.

As per the agreements, the PM office’s statement says, the government of Ethiopia will pay back the entire 1.13 billion US dollars loan within 38 years with zero interest but 0.75 service charges.

Before approving loans, the Council ascertained that all agreements were inline with the country’s loan policy and would not create unwanted burden on the country, the PM Office said.

The Council finally endorsed the draft agreements unanimously, and sent them to the House of People’s Representatives for final approval.

More bills approved

During today’s session, the Council also deliberated on two agreements – Africa Road Safety Charter and UN Road Traffic Convention.

Authorities expect that ratifying the international agreements will allow the transport system of the country to blend with the neighboring countries easily and help them formulate better road safety programs and policies.

After thoroughly discussed the draft agreements, the council of ministers unanimously approved bills and passed them to parliament for ratification, according to the PM office.