Practice Overview
At MLA, we provide specialized legal advisory services to lenders on sovereign debt and government‑backed guarantees in Ethiopia. Our team has extensive experience advising international financial institutions on complex financing arrangements with the Ethiopian Government and public enterprises. We guide clients through loan facility agreements, concessional and term loans, sovereign guarantees, and supplemental or amendment agreements, ensuring compliance with Ethiopian law and international standards.
Our work spans high‑profile infrastructure and development projects, including urban water initiatives, road and interchange projects, hydroelectric projects such as GIBE III, the National Grid Infrastructure Development Project, sugar industry developments, and the Ethio‑Djibouti Railway. By combining deep legal knowledge with practical insight, we help lenders structure, implement, and manage sovereign transactions efficiently and securely, providing trusted advice at every stage of complex financing arrangements.
Selected Experience
Sovereign Debt
- Advised the European Investment Bank on a loan facility agreement with the Ethiopian Government (Ministry of Finance and Economic Cooperation) for financing urban water projects through municipal on‑lending structures.
- Advised a Chinese bank on a concessional loan agreement with the Ethiopian Government to finance the Kality Ring Road Interchange – Tulu Dimtu Road, and the Kality‑Bulbula‑Kilinto Roundabout Road Projects.
Sovereign Debt Guarantee
- Assisted Industrial and Commercial Bank of China (ICBC) on supplemental/amendment agreements, sovereign guarantees, and notices of application of funds relating to its facility agreement with Ethiopian Electric Power for the National Grid Infrastructure Development Project (supplied by ZTE Corporation).
- Assisted ICBC on supplemental/amendment agreements, sovereign guarantees, and notices of application of funds regarding its term loan facility with Ethiopian Electric Power for the National Grid Infrastructure Development Project (supplied by Huawei Technologies Co., Ltd.).
- Assisted ICBC with supplemental/amendment agreements, sovereign guarantees, and notices of application of funds relating to a term loan facility for the development of the GIBE III Hydroelectric Project.
- Assisted ICBC on supplemental/amendment agreements, sovereign guarantees, and notices of application of funds in connection with its facility agreement involving the former Ethiopian Sugar Corporation (now Ethiopian Sugar Industry Group) for the construction of the Kuraz 5 Sugar Factory.
- Advised the Export‑Import Bank of China on the restructuring of a USD 4 billion loan to the Ethiopian Railway Corporation for the construction of the Ethio‑Djibouti Railway.
- Provided a legal opinion to the China Export & Credit Insurance Corporation (Sinosure) on the validity and enforceability of a government guarantee under Ethiopian law.
Sovereign Debt in Ethiopia: Legal and Institutional Framework
Ethiopia’s approach to sovereign debt is governed by a robust legal and institutional framework designed to ensure responsible borrowing and safeguard economic stability. The Constitution of the Federal Democratic Republic of Ethiopia (FDRE) establishes the division of powers between federal and regional governments in public debt management.
Key legislation—including the Financial Administration Proclamation No. 648/2009 (as amended), the Financial Administration Council of Ministers Regulation No. 190/2010, the International Agreements Making and Ratification Procedure Proclamation No. 1024/2017, and the Public Debt Management and Guarantee Issuance Directive No. 46/2017—provides clear rules for contracting, approving, managing, and guaranteeing sovereign debt.
Institutionally, the Ministry of Finance (MoF) plays the central role in federal debt management, while the House of Peoples’ Representatives, the Council of Ministers, and the Federal Auditor General provide oversight, transparency, and accountability. Together, these mechanisms promote sustainable borrowing practices, protect monetary stability, and support the country’s development priorities.
Key Contacts
Getu Shiferaw
Partner
getu@mehrteableul.com
+251‑912‑405‑283