• EIB and Zemen Bank mobilize €40 million ($47 million) for agricultural SMEs
• At least 30% of funds target climate projects and 30% support women-led businesses
• Initiative marks EIB’s first direct operation with a private commercial bank in Ethiopia

The European Investment Bank (EIB), through its development arm EIB Global, has signed a financing agreement with Zemen Bank SC to mobilize up to €40 million ($47 million) for agricultural enterprises in Ethiopia. The parties announced the deal on Monday, April 20, in Addis Ababa on the sidelines of a European Union–Ethiopia economic forum.

Under the agreement, the EIB will provide a €20 million credit line to the Ethiopian private commercial bank, while Zemen Bank will match the amount with an equivalent contribution. This structure marks the first direct operation of its kind conducted by the European institution with a commercial bank in the country.

The partners will channel the financing primarily to small and medium-sized enterprises (SMEs) involved in agricultural exports, particularly within coffee and horticulture value chains. The initiative will also integrate cross-cutting priorities. It will allocate 30% of the funds to climate action and environmental sustainability projects, while it will direct at least 30% to businesses led by women or promoting their economic inclusion.

“Agriculture is a key driver of Ethiopia’s economic growth, contributing to GDP, export revenues and employment,” said Ambroise Fayolle. “By providing credit lines to local commercial banks focused on climate action and environmental sustainability, we act as a catalyst to mobilize private capital across the agricultural value chain,” he added.

Agriculture accounts for 34% of Ethiopia’s gross domestic product and employs nearly 60% of the active population. Against this backdrop, the government is implementing a range of agricultural policies to modernize the sector, improve productivity and ensure food security.

These measures include mechanization, agroecological strategies, fertilizer and soil health programs, digital agriculture initiatives, and targeted support for horticulture, livestock and urban farming.

Beyond financing, Zemen Bank will receive technical assistance aimed at strengthening the climate resilience of its operations and improving its environmental and social practices. The initiative aligns with international programs promoting women’s entrepreneurship and with the European Union’s “Global Gateway” strategy.

In February, the European institution announced a separate €110 million package deployed through the Development Bank of Ethiopia to support productivity, improve access to finance and strengthen the resilience of rural stakeholders to climate shocks.

To date, the EIB has invested approximately €577 million in Ethiopia, focusing on renewable energy, water, transport, telecommunications and SME financing.

Charlène N’dimon