Thread by @GuledWiliq

#Thread Ethiopia has restructured Addis-Djibouti Railwaiway (ADR) line loan of $4.5B for another 30yrs; mainly for two reasons:
1- Abiy gov insisted on electrifying the railway using clean energy from hydropower dams vs fossil fuel; increased d project cost & caused delays

https://twitter.com/eolander/status/1412912886100348929

2-The railway link was designed to reduce travel time from 3 days to 12 hrs & running 3 freight/day, because of repeated power outages due to climate change impacts neither travel time was reduced & revenues are realized to date: accumulating Ethiopia's $1B annual debt services.

Worse Ethiopian gov is pursuing debt financing other railway projects specially Awash-Kombombla-Hara Gebeya/ Weldiya Railway (AKH) increasing its GDP to debt ratio above 55%; impacting its credit rating, forcing new lenders to increase the interest rates for future projects.

Djibouti is losing $B revenues from Addis-Djibouti Railway ADR, hydropower grid connection, & water projects while paying millions of debt services of these three projects; forcing Djibouti to restructure its debt services for the first time.

Djibouti should avoid Ethiopia's unreliable hydropower national grid that comes with high risk arising from climatic change that impacts frequently the water levels of the dams that force Ethiopia to ration electricity for domestic and export
reuters.com/article/us-eth…

The IMF and private creditors should avoid restructuring Ethiopia's debt while Abiy is in power, as the debt services reduction fund could be used to fund the Tigray war; this was the case in Somalia during the Siad Barre regime who used debt relief $ against Somaliland.

And when it's the right time to restructure Ethiopia loans, the IMF should condition Ethiopia to mitigate railway power outages, and railway performance to generate expected revenue to pay off the debt. The End.