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South Sudan-Ethiopia highway financing loan deal tabled in parliament

Radio Tamazuj

Ruben Madol Arol, the Minister of Justice and Constitutional Affairs, presented a financing agreement between South Sudan and Ethiopia to the national parliament on Wednesday.

This agreement, which had been approved by the Council of Ministers, aims to upgrade the Palouch, Mathiang, Maiwut-Pagak highway to a higher standard. It was originally signed by South Sudan’s President Salva Kiir Mayardit in 2023.

Addressing the Transitional National Legislative Assembly, Justice Madol highlighted the significance of the agreement in fostering cooperation between South Sudan and Ethiopia across various sectors, including business and politics. He noted that the agreement enables Ethiopia to provide financial support for the road project, amounting to $738,264,150.94.

“This agreement, signed on May 18, 2023, between the Federal Democratic Republic of Ethiopia and the Republic of South Sudan, designates South Sudan as the borrower and Ethiopia as the financier,” he explained.

“This agreement will enhance cooperation between the parties in various business and political sectors, as it focuses on connecting the road from South Sudan to Ethiopia,” Justice Madol explained.

According to the Justice Minister, South Sudan, as the loan borrower, will repay the loan over a five-year period following a five-year grace period from the agreement’s date. Ethiopia will receive payment in crude oil.

“In terms of crude oil payment, the borrower will repay the equivalent amount on the due date or in cash. If paid in cash, the borrower must deliver the crude oil price to Ethiopia. The loan repayment will be determined based on the price difference between the Arab Gulf and the delivery date of crude oil. Alternatively, if paid in crude oil, the borrower will deliver the oil,” Justice Madol clarified.

Minister Madol further revealed that “Services necessary for project execution will be procured from Ethiopian consulting firms, following South Sudan’s Public Procurement and Asset Disposal Act of 2018.”

Jemma Nunu Kumba, the Speaker of the August House, referred the financing agreement to the Committees of Road and Bridges, and Finance and Planning, for examination and reporting within 14 days

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