By Eyasu Zekarias
The Ethiopian Railway Corporation (ERC) has announced a new strategy aimed at addressing its significant debt burden, which has been exacerbated by recent economic challenges. The corporation has reported a staggering loss of 264 billion birr, primarily due to loans taken out for various projects. As a result, ERC is actively seeking new project financing to alleviate its financial pressures.
Getu Gizaw, Deputy CEO of ERC, stated that the corporation is currently negotiating foreign loans while also exploring alternative project financing options. He emphasized the urgency of initiating these financing efforts, warning that without action, the corporation’s debt will continue to escalate. Unlike previous funding methods that relied heavily on loans, ERC is now focusing on attracting private investors to support its projects.
In a significant development, the Ethiopian Railway Corporation has signed a memorandum of understanding with Italy’s COIPA Capital OU to enhance railway and logistics capacity. This agreement aims to strengthen infrastructure development and connectivity, marking a strategic phase in modernizing Ethiopia’s railway system.
Among the key projects included in this collaboration are the Endode Logistics Center, Mojo Dry Port, and a Multimodal Center designed to handle foreign cargo. Additionally, the agreement encompasses the Ogaden-Djibouti railway line project.
Vito Favorito Samarella, CEO of COIPA Capital, expressed confidence in leveraging sector experience and financing options to support Ethiopia’s extensive infrastructure development. He highlighted COIPA’s role in ensuring economic growth through adherence to international practices and standards for logistics and rail lines.
