Ethiopia Authorizes Sovereign Guarantees to Boost Strategic Investments

The Ethiopian government has introduced a new legal framework, Council of Ministers Regulation No. 590/2026, to authorize sovereign guarantees for strategic investors. This regulation empowers the Ministry of Finance to issue binding compensation commitments to project investors. Under these new rules, the federal government may be held liable for financial losses caused by state actions or defaults by public entities. The move is designed to enhance the bankability of strategic projects and attract more investment into the country. This policy shift marks a significant change in how Ethiopia manages risk for large-scale developments.