A new assessment shows the Addis Ababa Housing Corporation is eligible to take more loans from the Commercial Bank of Ethiopia (CBE), despite its inability to repay the 54 billion birr debt to the state financier.
Conducted by a group of experts from the Corporation and CBE, the assessment concluded that the Corporation has the capacity to repay its debt, enabling it to request more loans needed to finalize condominium housing projects that are under construction.
Currently, the Corporation is overseeing the construction of 139,000 new condominium houses, while another 80,000 are yet to be finalized. Delay of the projects has made the Corporation indebted, affecting its financial soundness of the Bank.
The surge in the price of construction inputs escalated the budget needed to complete housing projects that are being built. However, the new assessment shows the Corporation is still in a position to repay the loan and complete pending projects.
“We have many assets that can be easily converted to cash,” said Thomas Debele, deputy director general for construction at the Corporation.
The assessment also revealed the Corporation is yet to utilize arrangements that would help it solve the financial constraint it faces.
“Buyers can cover 50 percent of the cost of construction at the initial stage, an arrangement on the table to satisfy our financial need,” added Thomas.
The Corporation recently secured 2.5 billion birr in loans from the CBE in the form of corporate bonds in order to complete 30,000 pending projects, though this is below half of the requested amount.
It has planned to handover 19,000 houses by the end of June to buyers.
The last one and a half years saw the handing over of 37,000 condo units to buyers, a project that has consumed five billion birr.
