Ethiopian Investment Holdings (EIH), the country’s sovereign wealth fund, has announced negotiations to transfer the substantial foreign debt of the Ethiopian Railways Corporation (ERC) to the government’s sovereign debt.
This move aims to revitalize the key state-owned enterprise and is part of a broader debt re-profiling strategy initiated by the Ethiopian government with its official creditors.
Earlier this year, the ERC was placed under EIH’s portfolio of eight public companies, carrying debts exceeding a quarter of a trillion birr, primarily from major infrastructure projects.
“The negotiation to transfer ERC’s debt, particularly with China, under the government sovereign debt is ongoing,” said Asma Redi, Portfolios Head at EIH.
She also noted that the corporation’s domestic credit held by the Commercial Bank of Ethiopia is being absorbed by the Liability and Asset Management Corporation (LAMC), a government entity established in 2021 to manage the liabilities of indebted state-owned enterprises.
This financial restructuring aims to clear the ERC’s balance sheet, allowing it to pursue a new commercial strategy. The corporation has recently announced a shift towards a business-oriented model focused on public-private partnerships (PPPs) and joint ventures.
According to sources, the ERC has developed a comprehensive investment strategy that is awaiting final approval. This framework represents a strategic transition from being solely a public infrastructure developer to becoming a commercially driven entity seeking private and foreign investment.
“The move will allow the corporation to embark on new business ventures,” Asma confirmed, linking the debt relief directly to this new direction.
A key component of this strategy is the redevelopment of the ERC’s prime headquarters site in the Lagar area of central Addis Ababa.
The ambitious plan includes a new 35-story corporate headquarters, a 21-story hotel, and twenty-seven residential towers, comprising eight 36-story and nineteen 25-story buildings. It will also feature five retail centers, including four three-story complexes and one four-story complex.
Additionally, the ERC plans to expand its portfolio in logistics and ongoing projects.
The investment vision extends beyond the capital, with plans to develop strategic logistics hubs in key locations, including a logistics port at Indode, a small-scale port city at Mojo, and port logistics infrastructure at the Dire Dawa’s Melkajebdu station.
These new ventures will operate alongside the ERC’s ongoing core railway operations, which include the 392-kilometer Awash-Hara Gebeya line, delayed by the conflict in northern Ethiopia, a 3.2 km rail line at the Sof Umar Tourist Lodge, and a link connecting the Awash Oil Depot to the main Addis-Djibouti railway.
In a related development, the ERC has been officially designated as a multimodal transport operator, aligning with its expanded focus on integrated logistics and infrastructure development, signaling a transformative new chapter for the corporation.
