Millions of dollars worth of machinery have been collecting dust for nearly three years after a Chinese contractor suspended the half-a-billion-dollar construction of a sugar plant in the Omo Valley.

The Omo Kuraz V, a project designed to process 24,000Qtls of sugar cane a day, has been on hold as the primary creditor stalled loan disbursements to the contractor, Jianglian International Engineering Co. Ltd. (JJIEC). The contractor had won the bid in 2013 to complete the engineering, procurement and construction works for the 550 million dollar project, financed with a loan from the Industrial & Commercial Bank of China (ICBC), one of China's four biggest state-owned commercial banks.

Former Chairman of ICBC Jiang Jianqing had signed an agreement with then Finance Minister Sufian Ahmed in 2015, which included the provision of export credit to Omo Kuraz V. The Bank was leveraging its global network to facilitate the "One Belt One Road" and "Going Global" initiatives by financing large-scale infrastructure projects during the period. It has considerable financial interests in Africa, including a 20pc stake in the continent's largest bank in assets, Standard Bank of South Africa.

The Omo Kuraz V project is part of a set of four sugar estates under development in the Omo Basin. Omo Kuraz II and III, built by another state-owned Chinese firm, China National Complete Plant Import Export Corporation (COMPLANT), have begun production. The Omo Kuraz V project is the largest overseas contract for JJIEC, a private contractor based in Jiangxi province in China. People familiar with the project disclosed to Fortune that the company's last payment of 100 million dollars was made in 2018.

The company has 20 locals and three Chinese employees at the project site, keeping an eye on the machinery while awaiting another disbursement of 100 million dollars.

However, Chinese banks have suspended disbursements of approved loans for projects pending Ethiopia's bid for its external debt restructuring with international creditors, including China. Co-chairing with France a creditors' committee established to review requests made by Ethiopia's authorities, China holds more than one-third of Ethiopia's external debt stock of nearly 27 billion dollars. With the debt restructuring process stalled, Chinese banks had not dispensed loans since 2021, unlike in previous years when they used to release an average of 11pc of total loans within a given year.

Chinese banks have not signed new loan agreements with Ethiopian authorities for three years. China's new "Small & beautiful" policy explains a change in its leaders' priorities from financing large projects. President Xi Jinping described the new approach his country was applying as he addressed the third Belt & Road symposium in Beijing, China, two years ago.

New loans from China to countries in Africa dropped by 54pc to 7.5 billion dollars last year, a recent report by Fudan University in Shanghai disclosed. The report reveals that Chinese-financed investments, particularly by private companies, in Belt & Road projects in sub-Saharan Africa dropped to three billion dollars last year from 8.5 billion dollars in 2021.

The fate of Omo Kuraz V, 954km from the capital, remains uncertain, with no one able to say when disbursements will resume. However, employees of the Ethiopian Sugar & Industry Group (ESIG), who rotate between the Kuraz projects, disclosed to Fortune that while they are being paid salaries, it is frustrating to see the project in limbo.

"The machines are rotting," said an employee who requested anonymity.