The European Investment Bank’s development arm, EIB Global, has committed €110 million to support rural agricultural development in Ethiopia. The funding will be channelled through the Development Bank of Ethiopia, which will distribute the credit to local financial institutions such as microfinance organisations and Rural Savings and Credit Cooperatives. The initiative aims to improve farmers’ productivity, expand rural agribusinesses, and strengthen resilience against climate-related challenges.
A key focus of the programme is financial inclusion, with 50% of the financing earmarked for women and 20% dedicated to climate adaptation activities. The final beneficiaries will primarily include smallholder farmers, micro, small and medium-sized enterprises, as well as women and youth, who often face barriers in accessing formal financial services. By improving access to credit in rural areas, the programme seeks to address long-standing inequalities in Ethiopia’s agricultural sector.
The investment supports the third phase of Ethiopia’s Rural Financial Intermediation Programme, which is designed to strengthen agricultural finance systems and enhance the competitiveness and resilience of rural livelihoods. It aligns with both Ethiopia’s national financial inclusion strategy and the European Union’s Global Gateway initiative, which promotes sustainable and inclusive development partnerships globally.
A portion of the funding will also be directed toward climate action, particularly in helping rural communities adapt to droughts, floods, and pests. This includes improving environmental risk management and supporting sustainable agricultural practices. The programme is expected to enhance food security, increase agricultural productivity, and raise rural household incomes.
In addition to financing, the project includes €8.5 million in technical assistance supported by an EIB-managed trust fund. This will help strengthen the capacity of rural financial institutions, subsidise climate risk insurance for farmers, and improve lending systems. Farmers and agribusinesses will also receive support in financial literacy and climate-resilient farming techniques.
Officials from both Ethiopia and the European Union described the initiative as a major step toward deepening long-term cooperation in agriculture and rural development. The programme builds on decades of collaboration between Ethiopia and the EIB, which has already invested heavily in sectors such as energy, water, SMEs, and infrastructure, and is expected to expand further in the coming years.
