Addis Ababa- The Government of the Federal Democratic Republic of Ethiopia and the Government of the Italian Republic have signed a €80 million financing package to support Ethiopia’s ongoing economic reforms and sustainable development agenda.
The agreements were formally signed by H.E. Ahmed Shide, Minister of Finance of the Federal Democratic Republic of Ethiopia, and H.E. Sem Fabrizi, Ambassador of the Italian Republic to Ethiopia.
The signing ceremony highlighted the strength and depth of the long-standing partnership between Ethiopia and Italy, supported by mutual trust and shared development priorities in the context of the Mattei Plan for Africa.
The financing package consists of a €70 million concessional budget support loan from the Italian Revolving Fund for Development Cooperation (FRCS) and a €10 million grant from the Italian Climate Fund. It is designed to advance Ethiopia’s reform program under the World Bank-supported Third Development Policy Operation (DPO3), which focuses on strengthening macroeconomic stability, promoting private sector–led growth and enhancing resilience.
The package is part of the 2026 – 2028 financial support programme announced by the Italian Prime Minister Meloni and Prime Minister Abiy during their meeting in July 2025 and confirmed during the second Italy – Africa Summit in February 2026. It represents the first component of a broader Italian contribution to Ethiopia’s reform programme, which will amount to up to €150 million.
The support will contribute to the implementation of Ethiopia’s Homegrown Economic Reform Program and the Ten-Year Development Plan. These efforts aim to improve fiscal sustainability and economic management, reduce barriers to private investment and promote inclusive and climate-resilient development.
The program will prioritize key sectors including energy, agriculture and water. It will support reforms to expand access to electricity, strengthen agricultural productivity and market systems, and improve water resource management. These measures are expected to improve the livelihoods of millions of Ethiopians, particularly in rural and vulnerable communities.
The concessional financing will provide critical fiscal space to sustain reform implementation, mitigate the impact of external shocks and maintain macroeconomic stability. At the same time, the climate grant will support reforms in renewable energy, climate finance and carbon markets, reinforcing Ethiopia’s transition toward a green and resilient economy.
The agreements reaffirm the strong partnership between Ethiopia and Italy and are fully aligned with the World Bank’s policy framework, ensuring coordinated and effective support from development partners. Implementation will be carried out through Ethiopia’s national systems, supported by robust monitoring, reporting and independent audit mechanisms to ensure transparency and accountability.
Speaking at the signing ceremony, H.E. Ahmed Shide, Minister of Finance, emphasized that the financing package is timely and catalytic, reinforcing Ethiopia’s reform agenda by providing fiscal space while supporting key structural and climate-related reforms essential for sustaining growth and resilience.
H.E. Ambassador Sem Fabrizi, while framing the package within the Italian multi-level strategy to support Ethiopia sustainable and inclusive development, highlighted that the financial package signed today is not just a financing agreement, but a renewed pledge of partnership and a concrete expression of Italy’s commitment to the Ethiopian people.
The signing represents another significant milestone in Ethiopia–Italy cooperation and reflects a shared commitment to advancing inclusive growth, strengthening resilience and promoting sustainable development.
