Saudi Arabia has signed two loan agreements worth a total of $140 million with Ethiopia to support economic development in the East African country.

The soft loans were signed in Addis Ababa by the Minister of Finance for Ethiopia, Ahmed Shide, and the Vice Chairman and Managing Director of the Saudi Fund for Development (SFD), Dr. Khalid bin Sulaiman Al Khudairy.

The SFD is a Saudi government entity formed in 1974 to help finance infrastructure and other projects in developing countries. The loans granted to Ethiopia are intended for two specific infrastructure projects.

The first loan of $75 million would be utilized for the construction of the 118-km Debre Marko-Mota road project, while another loan for $65 million would go towards implementing a Water Sanitation and Hygiene (WaSH) projects in urban and rural areas.

The first loan road construction loan will link the town of Mota with the city of Debre Marko in the north west of the country as part of the government’s plan to expand regional road networks and develop the transport sector. Once operational, the road is expected to facilitate the flow of trade between towns and cities, contributing to the development of the local economy.

The second loan, which was made in partnership with other international agencies, including the World Bank, the UK Department for International Development (DFID) and UNICEF, will deliver a WaSH to several areas in Ethiopia. The international partnership will provide communities across Ethiopia with access to clean water and sanitation and demonstrates the fund’s commitment to strengthen prosperity in East Africa.

The singing of the agreement in Addis Ababa took place following a meeting between Ethiopian  Prime Minister Abiy Ahmed and Dr. Al Khudairy. Speaking after his discussions with the prime minister, Al Khudairy said: “SFD and the Government of Ethiopia have a long record of investing in successful development projects in critical sectors such as infrastructure and energy. The new WASH project will have far-reaching benefits, and our other agreement with the Ethiopian government will provide a loan towards an important new road. We hope the new projects will ensure that the people of Ethiopia are given the opportunities to not only better their futures, but their communities’ futures too.”

On the same day, the Saudi Arabia-based ACWA POWER Company and government also signed a Gad and Dicheto solar energy projects Implementation and power purchase deal. The deal will see the Saudi Arabian energy company finance the generation of 250MW of solar power and sell it back to the government from two farms in Somali and Afar regional states.

The projects, which will cost a total of $300 million is expected to be completed within 18 months and will boost economic development, create vital infrastructure and tackle water poverty in the country.


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