The European Union has officially resumed its direct budgetary support to Ethiopia, which had been suspended since 2020. This move is regarded as a significant boost to the country’s current reform agenda and marks the beginning of a new chapter in the 50-year strategic partnership between the two entities.
The resumption of support will result in the immediate release of a financial package worth more than 140 million Euros intended for Ethiopia’s national budget.
Jozef Síkela, the European Commissioner for International Partnerships, described this decision as a “clear sign of confidence” in the government’s efforts to stabilize and modernize the economy following the cessation of the conflict in Northern Ethiopia. Commissioner Síkela further explained that this funding is part of the recently signed 240 million Euro Annual Action Plan (AAP) aimed at supporting governance, health, and economic growth.
The renewed financial cooperation is designed to bring tangible improvements to the daily lives of Ethiopians by focusing on three primary sectors. Significant funding will be directed toward the RISE program, which has already successfully reached 4 million people by modernizing power grids and installing 2,500 kilometers of fiber optic cables.
To further strengthen digital infrastructure, skills, and governance, a 150 million Euro digital economy package has been signed, with intentions to double this investment in the coming years.
Additionally, the European Investment Bank (EIB) has authorized a new 130 million Euro credit facility to support smallholder farmers and rural enterprises, with a specific focus on women-led businesses and the agri-food sector.
During the ongoing 2026 EU-Ethiopia Business Forum in Addis Ababa, the primary focus has been on positioning Ethiopia as an attractive destination for European investment under the Global Gatewaystrategy.
