Small business across Ethiopia will benefit from a new 6.4 billion Birr (247 million Euro) lending and leasing program to be managed by the Development Bank of Ethiopia announced in Addis Abeba earlier today", according to a statement from the European Investment Bank (EIB). The new initiative, backed by the European Investment Bank and World Bank, "represents the first international support in the Ethiopian financial sector and the European Investment Bank's largest ever engagement in Ethiopia". The new initiative will back financing for local companies by Ethiopian microfinance institutions, commercial banks and leasing firms.
"The European Investment Bank has supported investment to improve energy, water, communications and private enterprise across Ethiopia for more than 40 years and is a key partner for sustainable development in Ethiopia" said Admasu Nebebe, Ethiopia's State Minister of Finance and Economic Cooperation. New support for investment by Ethiopian companies through the DBE "will increase access to finance and strengthen the role of the financial sector in this country. We welcome the increased engagement of the European Investment Bank since the opening of the EIB Addis Ababa office two years ago and look forward to strengthened cooperation in the years ahead."
"The European Investment Bank is committed to supporting long-term investment across Africa that improves infrastructure and strengthens economic activity. This project confirms the EU Bank's increased backing for financial services and enterprise crucial for future generations of Ethiopians," according to Pim van Ballekom, European Investment Bank Vice President.
This new initiative will support the local entrepreneurship and the creation of manufacturing jobs by hundreds of companies across Ethiopia, Ballekom said, the partnership with DBE represents the European Investment Bank's "largest ever engagement in Ethiopia and demonstrates the European Union's clear commitment to help unlock sustainable economic activity in this country."
According to the press statement, The European Union supports Ethiopia's ambitious economic development agenda through financial and technical cooperation. EIB "has unique technical and financial experience that is helping to improve infrastructure and private sector investment across Ethiopia."
"The new Leasing and Lending for SME initiative will help to strengthen the economic resilience of vulnerable communities and reflects Europe's commitment to help Ethiopia improve access to finance," said Chantal Hebberecht, European Union Ambassador to Ethiopia.
Agreements for the new 70 million Euro EIB support for private enterprise, the Bank's largest ever engagement in Ethiopia, were signed by Pim van Ballekom and Getahun Nana, President of the Development Bank of Ethiopia. The signature ceremony was attended by Abraham Tekeste, Ethiopia's Minister of Finance and Economic Cooperation, Ambassador Chantal Hebberecht and Carolyn Turk, World Bank Country Director for Ethiopia, Sudan and South Sudan, business representatives and European Ambassadors.
"The new financing scheme will support investment to expand manufacturing by small and medium sized companies across Ethiopia. Lending will be managed by both local branches of the Development Bank of Ethiopia and public leasing companies, reads the press statement. "The program will also support financing of working capital by companies through loans managed by commercial banks and microfinance institutions."
Technical assistance will also be provided alongside the new private sector financing initiate to improve preparation of business plans by local companies and to support capacity building at participating financial institutions.
The EIB has operated in Ethiopia since 1976 and prior to today's announcement provided more than 10.5 billion Birr (EUR 400 million) to support long-term investment in energy, communications and water infrastructure, as well as private sector investment.
EIB is the world's largest international public bank, owned directly by the 28 European Union member states. Over the last 5 years the European Investment Bank has provided more than EUR 22 billion for investment in Africa.