Ethiopia’s state-owned electricity company has agreed to pay $6.5 million to refund investors in the U.S. after failing to register bonds it marketed and sold to American residents of Ethiopian descent, the U.S. Securities and Exchange Commission said.
The settlement means that investors will get all of their money back with interest, Stephen Cohen, associate director of the SEC’s enforcement division, said in an e-mailed statement on Wednesday.
Ethiopia Electric Power Corp. held investor meetings in the U.S. and advertised the bond sales on the website of its embassy as well as on radio and television, the SEC said. It went on to raise $5.8 million from about 3,100 U.S. residents between 2011 and 2014, “without ever registering the bond offering with the SEC,” the regulator said.
Ethiopia has stepped up debt sales to finance hydro-electric projects that will meet power demand in one of Africa’s fastest-growing economies. Its population of almost 100 million is the second-largest on the continent.
The most ambitious power project is the $4 billion state-funded Grand Ethiopian Renaissance Dam on the Blue Nile River, the main tributary of the Nile. It aims to produce 6,000 megawatts -- or almost triple the country’s current capacity -- and is due to be completed next year.
The project has become a symbol of the country’s self-reliance, with the late Prime Minister Meles Zenawi having said Ethiopia would pay for the dam by itself.