Ethiopia has transferred ownership of ten state-owned enterprises to the government’s sovereign wealth fund as part of efforts to enhance their management.
The companies involved include Ethiopian Electric Power, Ethiopian Railway Corporation, and the Development Bank of Ethiopia, which functions as a policy bank. These enterprises are responsible for significant infrastructure initiatives, such as the Ethio-Djibouti railway and the extensive Great Ethiopian Renaissance Dam, in addition to managing 13 industrial parks.
Ethiopian Investment Holdings already oversees 27 other companies on behalf of the government, including Africa’s largest airline, Ethiopian Airlines, and Ethio Telecom, which has recently announced plans for an initial public offering.
Chief Executive Officer Brook Taye stated regarding the ten companies, “EIH will concentrate on ensuring that these enterprises maintain a robust balance sheet with assets surpassing liabilities. This will inherently improve their financial capacity to secure loans both domestically and internationally.”
The Commercial Bank of Ethiopia is owed approximately 846 billion birr ($6.78 billion) by state-owned enterprises, a debt that the government intends to convert into 10-year bonds.
This transfer occurs in the context of economic reforms that have included opening the Horn of Africa nation to foreign investment, floating its currency, and establishing EIH to rehabilitate the heavily indebted state-owned enterprises.
Source: bloomberg
