Ethiopia Shifts Ownership of 10 Firms to Sovereign Wealth Fund
Ethiopia transferred ownership of 10 state-owned companies to the government’s sovereign wealth fund as part of steps to improve their management.
The firms include Ethiopian Electric Power, Ethiopian Railway Corp. and the Development Bank of Ethiopia, which serves as a policy bank. The companies oversee mega infrastructure projects such as the Ethio-Djibouti railway, the giant Great Ethiopian Renaissance Dam along with 13 industrial parks.
Ethiopian Investment Holdings already owns 27 other companies on behalf of the government, including Africa’s biggest carrier Ethiopian Airlines and Ethio Telecom, which recently announced an initial public offering.
“EIH will focus on ensuring that these enterprises maintain a stronger balance sheet with assets exceeding liabilities,” Chief Executive Officer Brook Taye said of the 10 companies. “This will automatically enhance their financial capacity to borrow both locally and internationally.”
Commercial Bank of Ethiopia is owed about 846 billion birr ($6.78 billion) by state-owned companies, debt the government now plans to securitize into 10-year bonds.
The transfer comes amid economic reforms that have included opening the Horn of African nation up to foreign investment, floating its currency and establishing the EIH to rehabilitate the highly indebted state-owned enterprises.
