The Government of Ethiopia and the Government of Italy have signed a €80 million financing package to support Ethiopia’s economic reforms and sustainable development agenda. The agreement was formally signed in Addis Ababa by Ethiopia’s Minister of Finance, H.E. Ahmed Shide, and the Italian Ambassador to Ethiopia, H.E. Sem Fabrizi, under the framework of Italy’s Mattei Plan for Africa.
This financial package comprises a €70 million concessional budget support loan from the Italian Revolving Fund for Development Cooperation and a €10 million grant from the Italian Climate Fund. The funding aligns with the World Bank-supported Third Development Policy Operation (DPO3) to strengthen macroeconomic stability, reduce barriers to private investment, and promote inclusive, climate-resilient growth.
The initiative represents the first component of a broader €150 million financial support program for 2026–2028, previously outlined by Italian Prime Minister Giorgia Meloni and Ethiopian Prime Minister Abiy Ahmed. By utilizing Ethiopia’s national systems with robust transparency mechanisms, the funds will directly advance the country’s Homegrown Economic Reform Program and its Ten-Year Development Plan.
Key sectors targeted by the program include energy, agriculture, and water resource management. The combined loan and grant will provide vital fiscal space to mitigate external economic shocks while driving structural reforms in renewable energy, climate finance, and carbon markets. These measures aim to expand electricity access and boost agricultural productivity, ultimately improving millions of livelihoods in rural communities.
Speaking at the ceremony, Minister Ahmed Shide praised the timely, catalytic nature of the package, while Ambassador Fabrizi described it as a concrete expression of Italy’s commitment to the Ethiopian people. The agreement marks a major milestone in the bilateral partnership, reinforcing a shared vision for long-term green economic growth.