The Ethiopian Sugar Corporation (ESC) has placed loan applications with the state-owned Commercial Bank of Ethiopia (CBE) for 11.3 billion Br for rehabilitation works and servicing debts.

Nearly half of the loan amount (five billion Birr) is earmarked for servicing external debt, while a little over one billion Birr is for domestic debt obligations. If approved, the loan will be lumped into the Corporation's total debt of 70 billion Br registered early this year. The Liability & Asset Management Corporation (LAMC), established this year with a capital of 570 billion Br, has absorbed half of these debts.

The CBE has long served as a primary credit source for public megaprojects and state-owned enterprises (SOEs). The aggregate outstanding domestic debt of public enterprises reached 611 billion Br in loans and corporate bonds; the highest share is owed to the CBE.

According to a report from the Ministry of Finance, of loans disbursed in the past five years from external sources, seven percent has gone to the industrial sector, with the Sugar Corporation being a major recipient. However, LAMC has yet to settle the Sugar Corporation's balance, awaiting proceeds from privatisation and liberalisation activities.

Muluneh Aboye, vice president of credit management at the CBE, confirmed the Bank has received the loan request, but "nothing has yet been disbursed."

The Sugar Corporation was established as a state-owned enterprise in 2010 to develop sugar estates and production, including for the export markets. Nonetheless, it has faced operational difficulties in recent years, leading to consecutive losses. Many of the 10 plants under construction have yet to be completed upon schedule, including four sugar plants in Omo Kuraz of the Southern Regional State.

Several of the Corporation's projects have faltered in the past, and production remains below capacity. Zinabu Yirga, head of the Public Enterprise Holding & Administration, attributes this to a lack of rigorous feasibility studies and poor project management. He is bullish that the Corporation will address its mishaps.

"We've undertaken extensive reform works," said Zinabu. "It's one of the enterprises that promises to be profitable."