By Philip Buda Ladu
Parliament is set to closely examine the terms and conditions of a $738 million loan agreement signed between the governments of Ethiopia and South Sudan meat for infrastructure development projects.
Minister of Justice and Constitutional Affairs, Ruben Madol Arol, presented a financing agreement for scrutiny and endorsement by the parliament.
The minister sought permission to present the financing agreement, which was approved by the Council of Ministers in their meeting No. 2/2024 and passed to the national parliament for further consideration.
In February, the cabinet approved the proposal of the national Minister of Roads and Bridges regarding the financial agreement between South Sudan and Ethiopia for the provision of a loan totalling 783,254,150.94 dollars.
The loan, to be repaid by crude oil, is meant for the implementation of the Paloch-Mathiang-Maiwut-Pagak Road Project to the Asphelt Standard, covering a distance of 220 km to link South Sudan with the Port of Djibouti via Ethiopia.
The financing agreement, signed on May 18, 2023, between the governments of Ethiopia and South Sudan, identifies the Republic of South Sudan as “the borrower” and the Federal Republic of Ethiopia as “the financier.”
The agreement aims to promote cooperation between the two parties in various business and political fields, as it primarily focuses on connecting the road from South Sudan to Ethiopia, as explained by Madol.
This financing agreement has twelve (12) articles and annexes detailing the terms of the loan.
South Sudan will pay back the loan with an interest rate of 4% per annum using crude oil, a grace period of five years, and the participation of South Sudanese in the construction contracts.
“In light of the foregoing, I respectfully hereby submit the Financing Agreement between the Federal Democratic Republic of Ethiopia and the Republic of South Sudan” to you after its approval by the National Council of Ministers’ Resolution No. 12/2024 in its regular meeting No. 02/2024, for deliberations and enactment,” Madol submitted to the house.
House Speaker, Rt. Hon. Jemma Nunu Kumba, thereafter committed the report to four parliamentary specialized committees.
“In accordance with Regulation 38(3) of the TNLA conduct of business regulation 2011 (amended 2021), I hereby refer this financing agreement between the Republic of South Sudan and the Federal Republic of Ethiopia to the following specialized committees,” Nunu mentioned: “Committee for Roads and Bridges, Committee of Legislation and Justice, Committee for Finance, and also the Committee of Foreign Affairs.”
“So the committees, according to the same regulation, should report back to the house within 14 days; it is so decided,” the speaker ruled.