Ethiopia, Italy Sign €70 Million Concessional Budget Support Loan

Addis Ababa, June 29, 2026 (ENA)— Ethiopia and Italy have today signed a €70 million concessional budget support loan to be utilized for the third Development Policy Operation (DPO3), which will be aligned with financing to be obtained from the World Bank.

The agreement was signed between Finance Minister Ahmed Shide and the Italian Ambassador to Ethiopia, Sem Fabrizi.

Speaking during the signing ceremony, the Finance Minister stated that the agreement comes at a pivotal juncture in Ethiopia's macroeconomic transition, where sustaining reform momentum and safeguarding stability remain paramount.

According to him, the agreement directly supports Ethiopia's transformative agenda under the Development Policy Operation (DPO3), which focuses on strengthening economic management and fiscal sustainability, promoting private sector-led growth, and enhancing resilience, inclusion, and climate sustainability.

He further stated that the supported reforms are designed to address binding structural constraints across key sectors. In energy, they will expand access and enable private participation.

In agriculture, they will strengthen markets and productivity. In water, they will improve sustainability and climate resilience. These reforms will translate into tangible outcomes: expanded access to essential services, increased productivity and incomes, and greater resilience to 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. Together, we will continue to advance inclusive, resilient, and sustainable growth for our people,” he said.

Ambassador Sem Fabrizi, for his part, stated that the agreement aims to support microeconomic reforms carried out by the Government of Ethiopia under the leadership of Prime Minister Abiy Ahmed regarding the climate-resilient policy that Ethiopia is embarking upon.

The agreement we signed today will be utilized to carry out the third Development Policy Operation (DPO3) aligned with financing obtained from the World Bank, he added.