Ethiopia has moved closer to resolving long-running negotiations over its 1 billion US dollars Eurobond after reaching an agreement in principle with a group of private creditors on the financial terms of a restructuring.

The Ministry of Finance said the agreement followed restricted discussions held between December 23 and January 1, 2026 with an ad hoc committee of institutional investors holding more than 45 percent of the 6.625 percent notes due in 2024. The bond has been a central component of Ethiopia’s external debt difficulties and a key test of its engagement with private creditors under the G20 Common Framework.

Ethiopia was advised during the talks by White & Case and Lazard, while the bondholder committee was represented by Weil, Gotshal & Manges and Ankura Sovereign Advisors.

According to the ministry, the agreement in principle sets out the core financial parameters of the restructuring and is designed to remain consistent with targets under Ethiopia’s International Monetary Fund programme. The proposed terms have been shared with the country’s official creditor committee for non-objection and with the IMF to confirm compliance with debt sustainability requirements and the comparability of treatment principle.

The government has been seeking debt relief since requesting treatment under the Common Framework in late 2023. While progress was made in 2025 with an agreement involving official creditors, negotiations with holders of the Eurobond had remained unresolved, contributing to uncertainty over Ethiopia’s external financing outlook.

Talks with the ad hoc committee are continuing on non-financial terms of the new instruments to be issued, including legal and structural features. The Ministry of Finance said the agreement remains conditional on finalising those elements and receiving confirmations from both the IMF and the official creditor committee.

Ethiopia said it plans to move toward implementation through an exchange offer or consent solicitation as early as 2026, a step that would bring the country closer to concluding a restructuring process that has weighed on investor confidence and access to international capital markets.