• Ethiopia to reopen talks on restructuring its $1 billion Eurobond
• OCC says draft deal fails comparability of treatment debt-relief rules
• Government warns proceeding risks macro stability and economic recovery

Ethiopia will reopen discussions on the restructuring of its $1 billion Eurobond, according to a Ministry of Finance statement issued on Friday, January 30. The decision follows an assessment by the Official Creditor Committee (OCC), which reviewed the agreement in principle reached with private investors.

The committee said the preliminary agreement does not fully meet the requirements of the comparability of treatment principle, which calls for an equitable sharing of debt relief efforts among all creditor groups.

Earlier this year, Addis Ababa announced that it had reached an agreement in principle on key financial terms with a group of private investors to restructure its Eurobond, which matured in 2024. However, bilateral lenders represented within the OCC were required to approve any deal before it could be implemented.

Following the committee’s evaluation, Ethiopia said it is unable to proceed with the Eurobond restructuring terms outlined in the preliminary agreement. The government noted that implementing the deal would be inconsistent with the official-sector debt restructuring framework set out in the memorandum of understanding signed with the OCC in July 2025.

Addis Ababa added that moving forward under these conditions could pose risks to macroeconomic stability and the country’s broader economic recovery.

Ethiopia first requested a restructuring of its external debt under the G20 Common Framework in 2021, well before defaulting on its only Eurobond in December 2023. Authorities had also been engaged in negotiations to secure support from the International Monetary Fund (IMF). However, the institution made an agreement conditional on firm commitments from development partners and financing assurances from creditors.

Ethiopia’s debt relief process has advanced only slowly, partly due to the conflict that erupted in November 2020 between the central government and rebel forces in the Tigray region.

In July 2025, Addis Ababa reached an agreement with official creditors to restructure $8.4 billion in debt. According to government information, the deal is expected to free up more than $3.5 billion in cash flow, which could be redirected toward essential public investments.

The IMF has said Ethiopia’s debt remains unsustainable, largely due to persistent breaches of export-related external debt indicators and the country’s limited debt-carrying capacity. The institution has stressed that obtaining debt treatment will be key to meeting Ethiopia’s financing needs.

Lydie Mobio