Agricultural businesses in Ethiopia will be eligible for as much as €40 million in financing as a result of an agreement between the European Investment Bank Group’s development arm, EIB Global, and domestic lender, Zemen Bank SC. Under the accord, EIB Global is providing a credit line of €20 million to Zemen Bank, which will in turn match the sum. This is the first direct loan to a commercial bank extended by EIB Global in Ethiopia.
The deal involves on-lending by Zemen Bank to Ethiopian small and medium-sized enterprises (SMEs) licensed to operate in the country and export primarily in the agriculture sector. There will be a 30% focus on businesses that promote climate action and environmental sustainability. Gender is also a feature of the initiative, with at least 30% of the overall funding to be directed towards SMEs that are owned or led by women or provide employment, products and services for women.
The agreement was announced today in Addis Ababa at a European Union-Ethiopia Business Forum attended by European Commissioner for International Partnerships Jozef Sikela and Ethiopian officials. Agriculture accounts for more than a third of Ethiopia’s gross domestic product (GDP).
