Ethiopia and the European Investment Bank (EIB) on Thursday signed a €70 million loan agreement.The loan will be used to increase access to finance small and medium enterprises (SMEs) in Ethiopia that operate in manufacturing and agro-processing industries by establishing a credit facility that provides access for finance for leasing and working capital.
SMEs will be provided with toiled business development services to address issues of developing bankable business plans, quality of finance records, managing risks, business development and management, according to a press release issued by the Ministry of Finance and Economic Cooperation.
“We welcome the increased engagement of the European Investment Bank since the opening of the EIB Addis Ababa office two years ago and look forward to strengthened cooperation in the years ahead,” said Getahun Nana, President of the Development Bank of Ethiopia after signing the agreement.
The agreement is part of the € 247 million support announced by the bank for private enterprise financing program in Ethiopia.
The EIB has operated in Ethiopia since 1976 and prior to Thursday’s announcement provided €400 million to support long-term investment in energy, communications and water infrastructure, as well as private sector investment.
“The European Investment Bank is committed to supporting long-term investment across Africa that improves infrastructure and strengthens economic activity,” said Pim van Ballekom, EIB Vice President who signed the agreement from the European Investment Bank side.