Practice Overview
Our Firm supports clients in navigating the regulatory landscape governing foreign borrowing in Ethiopia. We advise on structuring external loans, securing regulatory approvals, negotiating lender terms, and completing registration requirements with the National Bank of Ethiopia (NBE). We also assist clients in acquiring repayment approvals from the NBE.
Our Services
- Advising on compliance with Ethiopia’s external loan laws and directives.
- Reviewing and structuring foreign loan and security arrangements.
- Drafting and negotiating loan, guarantee, and security documentation.
- Facilitating loan approval and registration with the National Bank of Ethiopia.
- Advising on foreign currency allocation, disbursement, and repayment compliance.
- Conducting legal due diligence on borrowers.
- Assisting with enforcement of security interests and creditor rights.
Brief Overview of Ethiopian Legal Framework in Foreign Loans
The principal regulatory instrument governing external loans in Ethiopia is the Foreign Exchange Directive No. FXD/1/2024, issued by the National Bank of Ethiopia (NBE). This Directive outlines procedures, eligibility criteria, and registration requirements applicable to all foreign‑currency‑denominated loans. It mandates that all borrowers secure prior NBE approval before contracting any external loan to ensure compliance with debt‑to‑equity ratios, financing structures, and Ethiopia’s broader foreign currency management objectives.
Overall, the Directive aims to enhance transparency, manage external debt vulnerabilities, and ensure that foreign borrowing supports Ethiopia’s economic priorities and foreign exchange stability.
Selected Experience
- Advising foreign lenders on the extension of sovereign debt, loan credit facilities, and sovereign debt guarantees in connection with the construction of railways in Ethiopia.
- Reviewing loan repayment agreements and escrow account agreements related to the financing of public and private projects in Ethiopia.
- Providing legal opinions on the validity, perfection, and enforceability of sovereign debt guarantees and loan credit facilities under Ethiopian law.
- Advising on facility agreements, hedging instruments, and financial derivatives.
Key Contacts
Michael Sebsibe
Legal Director
michaels@mehrteableul.com
+251 115 159 798