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Cabinet tables $738 million financing loan deal with Ethiopia

Author: Obaj Okuj | Published: Wednesday, May 29, 2024

Justice Ruben Madol, the Minister of Justice and Constitutional Affairs - Credit: Moses Awan/Eye Radio, Date: April 17, 2023

The cabinet is seeking the approval of the National Legislative Assembly of a 738 million US dollar financing loan agreement with the Ethiopia government to build roads linking the two countries.

The Minister of Justice and Constitution Affairs tabled the deal before the national legislature on Wednesday.

The Agreement was signed on 18th May 2023 between the government of South Sudan and Ethiopia for upgrading of Paloch- Mathiang-Maiwut-Pagak to Asphalt Standard covering 220 kilometers.

“The government of Ethiopia agrees to finance part of the cost of the project amounting to US Dollars 738 million for the purpose of facilitating effective and efficient road transport connection between the two countries.

“The loan shall be allocated for the expenditure as provided in … the Agreement, and all the disbursement made by the Ethiopia to the project shall be denominated in Birr while all the amounts due to the government of Ethiopia shall be payable in US dollars,”said Justice and Constitutional Affairs Minister Ruben Madol Arol

According to the five-year deal, South Sudan shall be repaid using the crude oil dependent on the price at the Arab Gulf on the date of the delivery.

The loan shall be paid at an interest rate of 4% yearly .

Financing loan agreement requires South Sudan parliament and the House of Peoples’ Representative of Federal Democratic Republic of Ethiopia to approve the agreement.

It also required the Minister of Petroleum to guarantee a letter for the availability of crude oil for repayment.

After tabling the agreement, the parliament refers the document to the specialized committees to study it and report it back to the house within 14 days.

“I here by refer the financing agreement between the Republic of South Sudan and the federal Republic of Ethiopia to the following committees; for roads and bridges,  legislation and justice committee of finance and a foreign affairs.

So, the committees according to the same regulation to the report back to the house within 14 days. It is so decided,” she said.


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