• The European Union committed €559 million ($660 million) to support Ethiopia’s economic transformation.

• Funding targets energy infrastructure, fiber deployment, and digital ecosystem development.

• Ethiopia aims to expand power capacity and modernize networks as part of broader reforms.

The European Union announced an investment package of €559 million (nearly $660 million) to finance the structural transformation of Ethiopia’s economy. Officials presented the initiative on Monday, April 20 in Addis Ababa during the EU–Ethiopia Business Forum 2026.

Targeted Investments in Energy and Digital

The EU outlined a set of structured investment programs. The €269 million RISE program will expand electricity access, modernize the national grid, deploy 2,500 kilometers of fiber optic cable, and rehabilitate the Ashegoda wind farm.

In addition, the EU allocated €150 million to support the development of the digital economy. This funding aims to strengthen connectivity, finance innovation, and foster the emergence of a dynamic digital ecosystem.

Moreover, the European Investment Bank announced new financing to support agriculture, rural communities, and women’s entrepreneurship.

The EU also confirmed the resumption of budget support to Ethiopia, with more than €140 million directed toward priority sectors such as energy, healthcare, connectivity, and business climate improvements.

These investments come as Ethiopia seeks to position itself as a major economic hub in Africa by leveraging domestic reforms and strengthening its partnership with the European Union.

An Ambitious Energy Strategy by 2030

Speaking at the opening ceremony, State Minister of Finance Semereta Sewasew highlighted progress achieved under ongoing economic reforms. She said the reforms aim to improve competitiveness, attract foreign investment, and strengthen the role of the private sector in driving growth.

“With a population of more than 120 million and a young workforce, Ethiopia offers significant opportunities in agriculture, manufacturing, renewable energy, and digital services,” she said.

The government has launched major projects in the energy sector, including a broad program to modernize and expand infrastructure. By 2030, authorities plan to build 30,000 kilometers of transmission lines and 456,000 kilometers of distribution networks.

The government also aims to improve system efficiency by reducing transmission losses to 5.5%, distribution losses to 13%, and commercial losses to 4.5%. At the same time, installed capacity should increase from 9,761 MW to 14,000 MW, while the share of non-hydropower renewables should rise from 5.6% to 15%.

According to International Monetary Fund data, Ethiopia’s economic growth is projected at 9.2% in 2026.

This article was initially published in French by Carelle Yourann (intern)

Adapted in English by Ange J.A de Berry Quenum