The National Legislative Assembly ratified a $738 million loan agreement to finance the construction of a 220km highway linking South Sudan and Ethiopia.

The loan agreement, which involves payment in crude oil to Ethiopia, was presented to lawmakers by Changkuoth Bichiok Reth, Chairperson of the Finance and Economic Planning Committee.

The highway, intended to connect western Ethiopia with north-eastern South Sudan, necessitates legislative consent from both nations to proceed.

The road on the South Sudan side will connect Paloch, Guelguk, Mathiang-Maiwut, and Pagak to Ethiopia’s border areas.

The agreement was signed by Eyob Tekalign, State Minister of Finance of the Federal Democratic Republic of Ethiopia, and South Sudan’s former Minister of Finance and Planning, Dier Tong Ngor.

On May 29, the Council of Ministers approved the deal and passed it to the National Legislative Assembly for endorsement.

A sitting scheduled last Monday to deliberate on the agreement was adjourned due to the absence of the current Minister of Finance and Planning, Daniel Awow.

However, the lawmakers today ratified the loan deal with amendments, observations and reservations.

“The R-TNLA chaired by the Honorable Jemma Nunu Kumba ratified the financial agreement between the Republic of South Sudan and Federal Democratic Republic of Ethiopia for the construction of roads that will link South Sudan with the Federal Democratic Republic of Ethiopia.

“After lengthy discussions and observations on the agreement the house unanimously rectified the agreement,” said Oliver Mori the spokesperson of the August House.

Under the five-year agreement, South Sudan will repay the loan using crude oil, depending on the oil price in the Arab Gulf at the time of delivery.

The loan carries an annual interest rate of 4%.

The financing agreement requires approval from both South Sudan’s parliament and the House of Peoples’ Representatives of the Federal Democratic Republic of Ethiopia.