ADDIS ABABA — Ethiopia’s ambitious efforts to overhaul its mounting external debt hit a major roadblock today. The Ministry of Finance announced that critical discussions with international bondholders over restructuring the country’s $1 billion Eurobond have ended without an agreement.
The collapse comes after private creditors rejected a revised proposal put forward by the Ethiopian government—a proposal that had been altered to appease official bilateral creditors under G20 rules.
The Sticky Point: Why the Deal Collapsed
The restricted negotiations, which took place between May 6 and May 27, 2026, were an attempt to salvage a preliminary agreement reached earlier this year on January 2.
That initial deal included a Value Recovery Instrument (VRI)—a mechanism designed to give private bondholders higher payouts if Ethiopia’s macroeconomic performance improved faster than expected.
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