China Eximbank pledges $1.5 billion loan to Ethiopian Railways Corporation for the Mekelle-Weldiya Railway Construction Project
Pledged amount
$ 1683413354.368429
Adjusted pledged amount
$ 1683413354.368429
Constant 2021 USD
Not recommended for aggregates
This project is not recommended for use in creating aggregated sums. See the documentation for more information about this criteria.
Summary
Funding agency [Type]
Export-Import Bank of China (China Eximbank) [State-owned Policy Bank]
Recipient
Ethiopia
Sector
Transport and storage (Code: 210)
Flow type
Loan
Level of public liability
Other public sector debt
Infrastructure
Yes
Category
Project lifecycle
Description
In January 2015, the Export Import (EXIM) Bank of China agreed to loan the Ethiopian Railways Corporation (ERC) $1.5 billion for the construction of the Mekelle-Weldiya railway. In June 2012, the ERC and the Chinese state-owned China Communications Construction Co. (CCCC) signed a railway agreement worth $1.5 billion. CCCC is the contractor and the EXIM Bank of China is providing financing for the project. Initially, non-Chinese financiers were going to provide funding for the project, but the ERC was unable to secure said funding from those sources and subsequently turned to the EXIM Bank of China to finance the project. The railway line is planned to run in the Northern part of Ethiopia, connecting Mekelle and Weldiya in 268km of track. According to the Railway Gazette, construction began in February 2015 and will involve the creation of 29 bridges and 19km of tunnels. The rail line was developed to help transport potash from nearby mines that are currently being developed, but it will also carry other freight and passengers. The project interconnects states positioned in the northern parts of the country. It starts from Mekelle and then cross the Afar state and Hara market found in the northern Amhara state. After that, it crosses Awash-Kombolcha and at the end of the day it meets with the railway lines which come from the eastern part. The railway project is a single track having a width of 1.435 meter standard gauge apart from running by electric power. The current status of the project and further details regarding the financing of the project are unclear. As of November 2017, the railway was 45% completed, but construction may have been temporarily halted. The project was expected to be completed in September/October 2018. According to various reports, due to debt sustainability concerns, China Eximbank has not approved this loan.
Number of official sources
2
Number of total sources
16
Details
Cofinanced
No
Direct receiving agencies [Type]
Ethiopian Railways Corporation (ERC) [State-owned Company]
Implementing agencies [Type]
China Communications Construction Co., Ltd. (CCCC) [State-owned Company]
Government of Ethiopia [Government Agency]
Ethiopian Railways Corporation (ERC) [State-owned Company]