Ethiopia and South Sudan have signed a $738 million financial agreement to construct a 220-km cross-border road, marking a significant step in enhancing connectivity and economic ties between the two neighboring countries.

The Ethiopian Ministry of Foreign Affairs announced on Thursday that South Sudan's Transitional National Legislative Assembly ratified the agreement on Tuesday.

The project underscores the growing cooperation and mutually beneficial relationship between Ethiopia and South Sudan.

According to the financial agreement, Ethiopia will cover the entire cost of the road construction. The repayment arrangement designates South Sudan as the borrower, with repayment to be made through crude oil supplies to Ethiopia.

This initiative aims to bolster economic integration and facilitate smoother trade routes, contributing to the regional development of East Africa.