Ethiopia Signs First G20 Debt Restructuring Deal with France, Secures €81.5 Million Support

Ethiopia and France signed a bilateral debt restructuring accord and an €81.5 million financing package in Addis Ababa, marking the first agreement between Addis Ababa and an Official Creditor Committee member under the G20 Common Framework. The deal, which supports Ethiopia’s macroeconomic reform drive, underscores progress in stabilizing an economy emerging from fiscal strain while recalibrating relations with Paris, a key co-chair in July 2025’s restructuring memorandum.

The agreement restructures sovereign liabilities as France injects €80 million in budget support for the second phase of Ethiopia’s Homegrown Economic Reform program and extends €1.5 million in technical assistance, building on a prior €100 million commitment. The package aims to ease liquidity pressures and bolster fiscal buffers, while French institutions AfD and PROPARCO expand infrastructure financing, with both governments exploring participation in Ethiopia’s planned new airport project.

Policymakers frame the accord within the EU’s Global Gateway and Team Europe strategies, signaling deeper capital alignment as Ethiopia courts long-term investment. With bilateral commitments now exceeding €600 million, more than half directed to energy infrastructure, officials project strengthened power capacity and trade connectivity. Markets will gauge whether sustained reform momentum and creditor coordination translate into improved investor confidence and renewed foreign direct investment flows.