In an unprecedented manner, the government of China is going to extend a 500 million dollar loan to Ethiopian Airlines to finance Boeing jetliner purchases as it did on the train construction and vesseles b purchases completely buying of the country with debt.
During Chinese Premier Li Keqiang’s state visit to Ethiopia last week, a Memorandum of Understanding (MoU) was signed between Ethiopian Airlines and ICBC Financial Leasing Co., Ltd.
A senior official at Ethiopian told The Reporter that the MoU relates only to Boeing aircrafts but in the future it can be extended to other fleet types. “The understanding is for 500 million dollars in financial facility. The loan negotiation will be the next stage,” the official said.
The senior official said that it was the first time that a Chinese bank had taken the lead in providing aircraft financing to Ethiopian. However, ICBC was already a junior loan partner in the B777-200LR freighter deal.
According to the MoU, ICBC Leasing will provide Ethiopian Airlines with financial support for its fleet expansion plan, including but not limited to B737 and B787 aircrafts in the form of finance lease, sale and lease back, commercial loans or operating lease from ICBC Leasing’s Boeing order.
Ethiopian said the MOU was one of the largest financial cooperation in the aviation industry between the two countries, which is an important step for China's financial industry to go international.