Ethiopia and Italy have signed a €70 million concessional budget support loan to finance the country’s Third Development Policy Operation (DPO3), aligning with complementary financing from the World Bank.
The agreement was signed by Ethiopia’s Minister of Finance, Ahmed Shide, and Italy’s Ambassador to Ethiopia, Sem Fabrizi.
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Speaking at the signing ceremony, Ahmed Shide said the financing comes at a critical stage in Ethiopia’s macroeconomic reform program, as the government seeks to sustain economic reforms while maintaining macroeconomic stability.
According to the minister, the DPO3 program supports reforms aimed at strengthening economic management and fiscal sustainability, promoting private sector-led growth, and improving resilience, social inclusion, and climate sustainability.
He noted that the reforms target key sectors including energy, agriculture, and water. In the energy sector, the program aims to expand access and encourage private sector participation. Agricultural reforms will focus on improving market efficiency and productivity, while water sector initiatives are designed to enhance sustainability and climate resilience.
Shide said the reforms are expected to expand access to essential services, raise productivity and incomes, and strengthen resilience to economic and climate-related shocks, particularly for vulnerable communities.
“Today’s signing represents more than financing. It is a strong vote of confidence in Ethiopia’s reform trajectory and a reaffirmation of our enduring partnership with Italy,” the finance minister said.
Italian Ambassador Sem Fabrizi said the loan reflects Italy’s continued support for Ethiopia’s macroeconomic reform agenda under Prime Minister Abiy Ahmed’s administration, including efforts to advance climate-resilient development.
He added that the financing will support the implementation of the Third Development Policy Operation in coordination with the World Bank, reinforcing Ethiopia’s ongoing economic reform program.
