The European Investment Bank Group's development arm, EIB Global, has partnered with Dashen Bank to provide €40 million in financing to small and medium-sized enterprises (SMEs) in Ethiopia, with a focus on agriculture, climate action and women-led businesses.

Under the agreement, EIB Global will provide a €20 million loan, which Dashen Bank will match with an additional €20 million. The financing will be channelled to Ethiopian businesses on terms that include longer repayment periods than those typically available in the domestic commercial banking market.

At least 70% of the financing will be allocated to agriculture and related activities, including businesses involved in coffee, pulses, horticultural products and cereals, with particular attention to exporters serving European and other international markets.

The initiative also includes targets for climate finance and financial inclusion, with at least 30% of the funding directed towards climate action and environmental sustainability and a further 30% targeting women's empowerment.

EIB Global estimates that the financing will support more than 34,000 full-time jobs through the businesses receiving funding.

“This partnership turns long-term finance into tangible opportunities for Ethiopian businesses,” said Ambroise Fayolle, Vice-President of the European Investment Bank.

“EIB Global will support agribusinesses to invest, adapt to climate change, grow and reach new markets. The operation demonstrates how European Union financing can reinforce resilient agricultural value chains, support quality employment and accelerate sustainable private-sector development in Ethiopia.”

Access to long-term financing remains a challenge for Ethiopian agricultural businesses, particularly those seeking to modernise production, meet international export requirements and invest in climate resilience.

Alongside the loan, EIB Global will provide technical assistance to strengthen Dashen Bank's environmental and social due diligence, climate finance capabilities and monitoring systems.

The technical assistance will be funded by the European Union through the ACP Trust Fund, EC Compartment.

Dashen Bank is also participating in the EIB's Greening Financial Systems programme, which helps financial institutions identify and manage climate-related risks and expand green lending.

“We are committed to expanding access to finance for the businesses that drive Ethiopia’s economy,” said Asfaw Alemu, Chief Executive Officer of Dashen Bank.

“This partnership with EIB Global will enable us to offer longer-term financing to agricultural enterprises, exporters and other eligible businesses while strengthening our support for green investment and women-led companies.”

The agreement comes as Ethiopia continues reforms to its banking sector, including changes to banking legislation, regulatory oversight and the gradual opening of the industry to foreign investment.

Dashen Bank is among Ethiopia's largest private commercial banks, operating a nationwide network of more than 900 branches and offering services across retail, corporate and digital banking.

The financing also forms part of the European Union's Global Gateway strategy, which supports investment in sustainable infrastructure, agricultural value chains and private sector development.

“Through Global Gateway, Team Europe is helping Ethiopian entrepreneurs access the finance they need to grow, innovate and seize new opportunities,” said Jozef Síkela, European Commissioner for International Partnerships.