Ethiopia – Billion birr loan approved for city administration

Ethiopia – Billion birr loan approved for city administration

By Yohannes Anberbir

The second bond issued by Mayor Kuma Demekssa’s Addis Ababa City Administration, this time for a 1.2 billion birr loan, has been approved by the state-owned Commercial Bank of Ethiopia (CBE).

The bank had lent one billion birr to Berhane Deressa, the leader of the former caretaker city administration, and his successor, Kuma, received a 1.5 billion birr loan following a bond he issued immediately after he took office in 2008.

But despite the city having trouble servicing the two previous loans it obtained, it again issued the new bond worth 1.2 billion birr a few months ago to raise more finance, which has now been approved by the CBE.

A letter from the Ministry of Finance and Economic Development (MoFED) urging the bank to cooperate with the city’s housing project helped us to obtain the loan, Yemane Tsegaye, acting manager of the city’s Housing Development Agency, who also signed the loan agreement with CBE, told Capital.

Contractors engaged in condominium constructions have been in trouble for the last three months due to payment problems, according to Capital’s source.