Ethiopia’s status as a leading East African destination for foreign direct investment (FDI) continues to hold weight as the country recently inked a $1.7 billion in investment agreements in its energy and mining industries with China.
- Ethiopia secures $1.7 billion in investment agreements with Chinese companies in the energy and mining industries.
- Major investments include $500 million by Hua Ye Mining and $360 million by Hainan Drinda New Energy for sector advancements.
- The Ethiopian government emphasizes structural reforms like debt restructuring and currency liberalization.
According to a statement from Ethiopia’s Finance Ministry, the majority of the agreements were made with Chinese companies at a recent two-day investment conference in Addis Ababa.
Ethiopia’s economic reform strategy, which includes restructuring its $8.4 billion external debt and liberalizing its currency, has been a huge part of the country’s growth plan.
The government inked a four-year, $3.4 billion program agreement with the International Monetary Fund in 2024, which includes the changes.
DON’T MISS THIS: Kenya set to dethrone Ethiopia as East Africa’s largest economy
Among the big transactions is Hua Ye Mining Processing Company’s $500 million investment in mineral exploration and processing, as well as the creation of a special economic zone.
Sequoia Mining & Processing Plc pledged $600 million to construct coal mining operations, while Hainan Drinda New Energy Technology promised $360 million to build a solar cell manufacturing factory.
CSI Solar plans to invest $250 million in solar energy development, as reported by Reuters.
While the ministry did not indicate when the money would be delivered, these agreements reflect increasing investor confidence in Ethiopia’s resource and energy sectors.
According to the Ethiopian Investment Commission (EIC), China continues to dominate Ethiopia’s foreign direct investment landscape, accounting for nearly half of all investment projects.
This information was made known last year in June, when Ethiopia was named the East African country with the highest FDI inflow.
Ethiopia’s strategic push for public-private partnerships (PPP) has also been critical, with high-profile projects such the UAE’s AMEA Power spending $600 million in the Aysha wind power plant.
This current wave of investments shows Ethiopia’s desire to become a regional powerhouse for energy and mineral development, while giving useful lessons for other African governments on leveraging international relationships and structural changes to attract long-term finance.
