• Ethiopia agreed in principle with investors holding over 45% of its $1 billion eurobond due 2024.
• The deal aligns with IMF-backed reform targets and the G20 Common Framework.
• Multilateral lenders hold more than half of Ethiopia’s $28.9 billion external debt.

Ethiopia reached a preliminary agreement with a group of investors on restructuring its $1 billion eurobond maturing in 2024, the Ministry of Finance said in a statement released on Friday, January 2.

The agreement followed negotiations held between December 23, 2025, and January 1, 2026, between Ethiopian authorities and a private creditors’ committee representing institutional investors that collectively hold more than 45% of the outstanding eurobond.

The deal covers the main financial terms of the restructuring of the bond, on which Ethiopia defaulted in December 2023.

Addis Ababa said the preliminary agreement complies with the objectives and parameters of the International Monetary Fund–supported economic reform program. The government also said the deal respects the principle of comparability of treatment applied by Ethiopia’s Official Creditors Committee (OCC).

The Ministry of Finance said it shared the terms of the agreement with the OCC to secure a non-objection. The ministry also submitted the terms to the IMF to ensure consistency with the country’s long-term debt sustainability.

However, the ministry said Ethiopian authorities must still agree with the creditors’ committee on non-financial terms of the new eurobonds that will replace the defaulted securities.

Multilateral lenders hold more than 50% of external debt

The preliminary agreement on the financial terms of the restructuring of the 2024 eurobond marks a critical step in Ethiopia’s broader debt restructuring process.

The East African country, whose economy suffered from six consecutive years of drought and the Covid-19 pandemic, requested a comprehensive restructuring of its external debt under the G20 Common Framework in early 2021. Ethiopia made the request nearly three years before it defaulted on its only eurobond in December 2023.

Debt relief talks progressed slowly for several years, largely due to the conflict that erupted in November 2020 between the central government and rebel groups in the Tigray region.

Ethiopia reached a final agreement with its official creditors only in July 2025 on the restructuring of $8.4 billion in debt. The government said the deal should allow the country to “free up more than $3.5 billion in cash to allocate to essential public investments.”

In July 2024, the IMF estimated Ethiopia’s external debt at $28.9 billion.

Multilateral financial institutions, including the IMF, the World Bank, and the African Development Bank, hold more than half of the country’s external debt stock.

Of the $12.4 billion owed to official bilateral creditors, China accounts for $7.4 billion, while Saudi Arabia holds slightly more than $1 billion.

This article was initially published in French by Walid Kéfi

Adapted in English by Ange Jason Quenum