China Eximbank provides $143 million preferential buyer's credit for Phase 1 of Addis Ababa-Adama Expressway Project (Linked to Record ID#36251, #980, #589, #101)

China Eximbank provides $143 million preferential buyer's credit for Phase 1 of Addis Ababa-Adama Expressway Project On November 8, 2009, China Eximbank and the Government of Ethiopia signed a $349,000,000 preferential buyer credit (PBC) agreement for Phase 1 of the Addis Ababa-Adama Expressway Project (captured via Record ID#980).

Then, on November 26, 2009, the Ethiopian Parliament ratified the PBC (loan) under proclamation No. 658/2009. The proceeds of the loan were on-lent to the Ethiopian Roads Authority (ERA).

The loan's first and last scheduled principal payment dates were July 21, 2017 and January 21, 2030, respectively. Its first and last scheduled interest payment dates were July 21, 2010 and July 21, 2029, respectively.

The borrower was expected to use the proceeds of the PBC to finance 85% of the cost of a commercial (EPC) contract between the ERA and China Communications Construction Company Limited (CCCC), which was signed on or around June 27, 2009.

According to the Government of Ethiopia’s Aid Management Platform (AMP), the $349 million PBC achieved a 60% disbursement rate, with China Eximbank making 16 loan disbursements (worth ETB 4,847,852,378) between 2011 and 2017: an ETB 651,221,131 disbursement on January 8, 2011, an ETB 682,158,333 disbursement on July 7, 2011, an ETB 236,792,990 disbursement on October 10, 2011, an ETB 273,157,439 disbursement on January 8, 2012, an ETB 450,455,536 disbursement on July 7, 2012, an ETB 216,893,784 disbursement on January 8, 2013, an ETB 853,439,518 disbursement on April 8, 2013, an ETB 996,656,460 disbursement on July 7, 2013, an ETB 236,742,424 disbursement on October 8, 2013, an ETB 130,076,628 disbursement on January 8, 2014, an ETB 984,252 disbursement on July 8, 2014, an ETB 808,081 disbursement on January 8, 2015, an ETB 491,459 disbursement on July 7, 2015, an ETB 282,589 disbursement on October 7, 2015, an ETB 33,385,378 disbursement on October 7, 2016, and an ETB 84,306,376 disbursement on July 7, 2017.

Then, on September 10, 2013, China Eximbank and the Government of Ethiopia signed a $333 million preferential buyer credit (PBC) loan agreement [CHINA EXIMBANK PBC N). 2013 (35) Total No. (279) 1420303052013211786] for Phase 1 and Phase 2 of the Addis Ababa-Adama Expressway Project. The proceeds of the loan were on-lent to the ERA.

The loan's first and last scheduled principal payment dates were July 21, 2021 and July 21, 2035, respectively. Its first and last scheduled interest payment dates were July 21, 2014 and January 21, 2034, respectively.

The borrower was expected to use the loan proceeds to finance 75% of the cost of a commercial (EPC) contract between ERA and CCCC, which was signed on January 22, 2014. $143 million of the loan proceeds were allocated to Phase 1 of the Addis Ababa-Adama Expressway Project (captured via Record ID#30886), and $190 million of the loan proceeds were allocated to Phase 2 of the Addis Ababa-Adama Expressway Project (captured via Record ID#36251).

As of March 16, 2021, the $332 million PBC had achieved a 92% disbursement rate ($306,388,654.06 of $333 million).

According to official correspondence between the Concessional Loan Department of China Eximbank and the Ministry of Finance of Ethiopia (on March 18, 2021), China Eximbank made 16 loan disbursements (worth $306,388,654.06) through the $333 million PBC between 2014 and 2021: a $100,707,143.90 disbursement on June 26 2014, a $40,941,780.28 disbursement on November 27, 2014, a $25,384,969.23 disbursement on December 22, 2014, a $15,133,515.73 disbursement on June 12, 2015, a $24,221,555.29 disbursement on June 23, 2015, a $8,858,069.08 disbursement on September 22, 2015, a $12,870,031.74 disbursement on October 23, 2015, a $21,763,228.43 disbursement on February, 29, 2016, a $15,093,235.16 disbursement on August 19, 2016, a $15,901,936.27 disbursement on November 30, 2016, a $3,617,707.32 disbursement on June 14, 2017, a $3,317,569.64 disbursement on June 22, 2017, a $4,129,676.75 disbursement on June 23, 2017, a $5,861,882.71 disbursement on December 24, 2019, a $8,338,128.14 disbursement on March 15, 2021, and a $248,224.39 disbursement on March 16, 2021.

The total estimated cost of the Addis Ababa-Adama Expressway Project was $612 million.

The purpose of the first phase of the Addis Ababa-Adama Expressway Project was to construct a new eight-lane asphalt expressway stretching 78 km from Addis Ababa to Adama. The alignment starts from Tulu Dimtu.

The main road of the expressway continues 2.8 km along the proposed Addis Adaba outer ring road and then crosses Dukem, Bishoftu and Modjo on their east side. It then passes the old Addis Adama road at 62km and bypasses around Adama on the south side. The expressway ends on the east side of Adama and connects to Adama Awash road.

The expressway has 18 km of link road and 7.2 km of frontage road on either side in Adama.

The road work involved the construction of six interchanges, three intersections, 77 slab culverts, 36 underpasses and 43 overpasses. The 5.4m-high overpasses are supported by 73t girders, reinforced concrete piers and stone structures. Pedestrians, agricultural vehicles and cars can use three of the underpasses.

The underpass for agricultural vehicles has a width of 4.5m and a height of 3.2m. The pedestrian underpass is 4.5m wide and 2.2m high. Car underpasses are larger in size with 6.5m width and 4.5m height.

Flood discharge was used to size the culverts, which was designed according to velocity, water scouring and water levels. The project also included the construction of two main toll gates and 13 ramp toll gates.

The ultimate objective of the project was to reduce the travel time on Ethiopia's main import-export route from three hours to one hour.

The project also sought to lay the groundwork for the use of innovative technology via tolls and creates local employment opportunities.

Upon completion, the project was expected to contribute to the development of roadways between the capital city and other regions, such as Hawassa and Bale. The Addis-Adama Expressway (AAE) is fully access-controlled and managed by Ethiopian Toll Road Enterprise (ETRE). CCCC was the EPC contractor responsible for the implementation of the project’s first phase and second phase.

Phase 1 construction began on April 21, 2010.

According to Samson Wondimu, the Communication Director of ERA, the project’s first phase had achieved a 33.6% completion rate as of April 2012. By September 2012, it had achieved a 50% completion rate. A completion ceremony for the first phase of the project was held on May 5, 2014.

The second phase of the project (also known as the Lebu-Akaki-Information Technology Park Outer Ring Road Project, the Lebu-Akaki IT Park Outer Ring Road Project, and the Akaki-Goro and Akaki-Lebu Road Project) involved the construction of a 28.1 km toll road — with three lanes each 3.5 meters wide — that links Adama Town in Oromia State with Addis Ababa.

Phase 2 supported two road sections: a 14.6 km Akaki-ICT Park (Goro) road section and a 13.6 km Akaki-Lebu road section.

Phase 2 also involved the construction of six bridges, one railway line interchange, and three interchanges at Tulu Dimitu, Akaki and Lebu.

Upon completion, the project’s second phase was expected to ease traffic congestion along the Akaki-Bishoftu corridor.

Phase 2 began implementation on May 5, 2014 and was originally scheduled to reach completion within 25 months (June 5, 2016). By November 27, 2014, the second phase of the project had achieved a 27% completion rate. By June 2015, the second phase of the project had achieved a 50% completion rate. Phase 2 was ultimately completed on August 6, 2016.

After the completion of first and second phases of the Addis Ababa-Adama Expressway Project, traffic volumes on the expressway reportedly exceeded 20,000 vehicles per day on the two-lane road trunk road between Addis Ababa and Adama.

In October 2019, an official from the Ethiopian Toll Roads Enterprise (ETRE) reported that around 33 million cars had used the toll expressway over the previous five years, generating around $34 million of revenue for the country.

However, according to an October 2021 report, '[a]fter 5-years [the expressway] has earned back only about $30 million in toll revenue, well short of expectations.

Ethiopia built the toll road parallel to an existing free highway, and a lot of the traffic has remained on the old road.' There are some indications that the China Eximbank loan for Phase 1 of the Addis Ababa-Adama Expressway Project may have financially underperformed vis-a-vis the original expectations of the lender.

According to the Government of Ethiopia’s Aid Management Platform, as of September 2019, ICBC suspended about $67 million worth of loan disbursements 'due to [the] cross-default situation of the country’ (see Project ID#58616).

Then, in August 2021, China Eximbank withheld $339 million loan disbursements for 12 projects and halted project implementation due to Government of Ethiopia’s rapidly dwindling foreign exchange reserves and debt sustainability challenges.

Then, after considerable delay, the G20 Common Framework (CF) creditor committee for Ethiopia convened in September 2021, with the French Government and the Chinese Government serving as co-chairs. The CF debt rescheduling talks were still ongoing in mid-2023.