Ethiopia has reached a preliminary agreement with private investors to restructure its US$1 billion eurobond maturing in 2024, the finance ministry said, marking a key step in the country’s long-running debt overhaul.
The deal was agreed in principle with a committee representing institutional investors holding more than 45 percent of the outstanding bond, following negotiations held between December 23 and January 1, according to a statement.
The agreement covers the main financial terms of the restructuring of the eurobond, on which Ethiopia defaulted in December 2023.
The government said the proposed terms align with targets under an International Monetary Fund-backed reform programme and respect the G20 Common Framework principle of comparability of treatment applied by Ethiopia’s Official Creditors Committee (OCC).
Addis Ababa said it had shared the terms with the OCC to seek a non-objection and submitted them to the IMF to ensure consistency with long-term debt sustainability goals.
However, the finance ministry said discussions with private creditors on non-financial terms of the new bonds that will replace the defaulted securities are still ongoing.
Broader debt overhaul
The preliminary eurobond deal comes as Ethiopia continues a broader restructuring of its external debt, which stood at US$28.9 billion as of July 2024, according to IMF estimates.
Multilateral lenders including the IMF, World Bank and African Development Bank hold more than half of the country’s external debt stock.
Ethiopia requested comprehensive debt relief under the G20 Common Framework in early 2021, nearly three years before it defaulted on its only eurobond. Progress was slow for years, in part due to the conflict that erupted in the Tigray region in November 2020.
In July 2025, Ethiopia reached a final agreement with its official creditors to restructure US$8.4 billion in debt, a deal the government said would free up more than US$3.5 billion for essential public investment.
Of the US$12.4 billion owed to official bilateral creditors, China accounts for US$7.4 billion, while Saudi Arabia is owed just over US$1 billion.
