Italy cancels 342 million euros owed by Ethiopia

ADDIS ABABA, Jan 3 (AFP) — Italy is to write off Ethiopia’s debt of $462.4m following an agreement signed on Monday in Addis Ababa between the two countries, the Italian embassy said in a statement.

The cancellation will significantly contribute to solving the debt sustainability problem of Ethiopia, Italian ambassador to the country Guido La Tella said during the signing ceremony, added the statement.

“Italy has gone beyond its commitment within the Paris Club framework and cancelled hundred percent of its credit towards Ethiopia instead of the agreed 90% debt relief,” the La Tella explained.

“The debt relief will free significant resources for the financing of new development projects and will provide strong support to the Ethiopian poverty reduction programme over the next few years,” Ethiopian Finance and Economic Development Minister Mulu Ketsela said.