Ethiopia Gets Nod From Official Creditors on Eurobond Plan

Ethiopia's finance ministry announced on Friday that it has received a favourable 'Comparability of Treatment' assessment from its official creditors regarding the proposed restructuring of its Eurobond. The brief statement on the ministry's website provided no further details about the assessment or the next steps.

The development marks a significant milestone for the Horn of Africa nation, which has been navigating a prolonged debt crisis. In June, Ethiopia reached a preliminary agreement with key bondholders to restructure its defaulted $1 billion international bond. At that time, the government noted that the co-chairs of the Official Creditor Committee—China and France—had raised no objections, though the deal still required approval from the wider committee.

Ethiopia entered debt restructuring talks in 2021 and defaulted on its sole Eurobond in 2023. The case is widely viewed as a critical test for the G20's Common Framework, a mechanism created during the COVID-19 pandemic to streamline debt workouts. However, the process has been hampered by disagreements among Western lenders, China, and private investors, leading to delays and complications in several restructuring efforts.

The Paris Club, which typically coordinates official creditor communications under the Common Framework, did not immediately respond to requests for comment. Ethiopia's financial and legal advisers were also unavailable for immediate comment.