Ethiopia has secured a major industrial investment through a $1 billion agreement with the Russian aluminium producer RUSAL to construct a large-scale aluminium smelter. The Memorandum of Understanding (MoU) with the state-owned Ethiopian Investment Holdings (EIH) outlines the development of a plant with a planned annual capacity of 500,000 tonnes. This ambitious project, with 70% of the initial cost expected to be financed by debt partners, is projected to take three to four years to build and operate for up to fifty years, setting the stage for a long-term expansion of Ethiopia's manufacturing and export capabilities.
The primary goal of this new facility is to deliver significant economic and regional benefits. By establishing a domestic refining hub, Ethiopia aims to reduce heavy foreign-exchange outflows currently spent on importing aluminium. The smelter is designed to position the country as a competitive supplier in regional and global markets, transforming it into East Africa’s first major aluminium refining hub. This move diversifies Africa's existing aluminium production, which is currently concentrated in countries like South Africa, Mozambique, and Egypt, and strengthens the continent's role in the global market, which the International Aluminium Institute anticipates will grow by 40% by 2030.
On a geopolitical level, the deal highlights Russia’s expanding strategic economic influence across the African continent. At a time when Western financing and political engagement are reportedly weaker, Russia, alongside China, is utilizing shifting geopolitical alignments to secure long-horizon industrial projects. This investment is consistent with Moscow's acceleration of partnerships across key sectors, offering capital and technology to African governments who are seeking alternatives to conditional Western financing. The RUSAL-backed project is thus poised to reshape the aluminium value chain in East Africa while deepening Russia's long-term presence in a strategically important African market.
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