Ethiopia has agreed a memorandum of understanding with its Official Creditor Committee that formalises an initial debt restructuring deal reached earlier this year, the government's official news agency said on Wednesday.

The debt rework offers relief of over $3.5 billion, the Ethiopian News Agency (ENA) said.

The Eastern African nation opted to restructure its external debt under the G20's Common Framework in 2021, before it defaulted on its sole Eurobond in December 2023.

Ethiopia's government hopes that reaching a formal agreement with its official creditors will help it seal deals with other creditors like its bondholders, ENA said.

Engaging in 'good faith'

"Ethiopia continues to engage in good faith with all its other participating external creditors and seeks to conclude restructuring agreements on terms compatible with the country's need for debt relief and the comparability of treatment principle," ENA quoted Eyob Tekalign Tolina, state finance minister, as saying.