Financing loan for Ethiopia, South Sudan cross-border highway tabled to South Sudan parliament

Addis Abeba – Ruben Madol Arol, South Sudan’s Minister of Justice and Constitutional Affairs, presented a financing agreement signed between Ethiopia and South Sudan to the latter’s national parliament on Wednesday.

Approved by the Council of Ministers, the agreement aims to upgrade the Palouch, Mathiang, Maiwut-Pagak highway to a higher standard. It was initially signed by South Sudan’s President Salva Kiir Mayardit in 2023.

The agreement enables Ethiopia to provide financial support for the road project, totaling $738,264,150.94.

Minister Ruben told South Sudan’s Transitional National Legislative Assembly that the the agreement, signed on May 18, 2023, Ethiopia and South Sudan, “designates South Sudan as the borrower and Ethiopia as the financier,” local media quoted him as saying.

“This agreement will enhance cooperation between the parties in various business and political sectors, as it focuses on connecting the road from South Sudan to Ethiopia.”

The Minister also said that South Sudan, “as the loan borrower, will repay the loan over a five-year period following a five-year grace period from the agreement’s date. Ethiopia will receive payment in crude oil,” the news report said.

“In terms of crude oil payment, the borrower will repay the equivalent amount on the due date or in cash. If paid in cash, the borrower must deliver the crude oil price to Ethiopia. The loan repayment will be determined based on the price difference between the Arab Gulf and the delivery date of crude oil. Alternatively, if paid in crude oil, the borrower will deliver the oil,” the news quoted Minister Ruben Madol, adding “services necessary for project execution will be procured from Ethiopian consulting firms, following South Sudan’s Public Procurement and Asset Disposal Act of 2018.”

Jemma Nunu Kumba, the Speaker of the Parliament, referred the financing agreement to the Committees of Road and Bridges, and Finance and Planning, for examination and reporting within 14 days.