The European Investment Bank’s development arm, EIB Global, has allocated €40 million to Ethiopian small and medium-sized enterprises (SMEs) via a collaboration with Dashen Bank. The allocation will focus on agriculture, climate action, and women-led businesses, with at least 70% earmarked for agribusinesses, such as coffee, pulses, horticultural products, and cereals, while 30% will fund climate action and environmental sustainability, and another 30% will support women’s empowerment.
The funding is split evenly: EIB Global will extend a €20 million loan, which Dashen Bank will match with an additional €20 million. Loan terms include longer repayment periods than those typically available in the domestic commercial banking market. The program is estimated to support more than 34,000 full-time jobs through the businesses receiving funding, according to EIB Global estimates.
Access to long-term financing remains a challenge for Ethiopian agricultural businesses, particularly those seeking to modernize production, meet international export requirements, and invest in climate resilience. The new financing directly addresses these challenges by providing capital for businesses involved in agriculture and related activities, with particular attention to exporters serving European and other international markets.
Alongside the loan, EIB Global will provide technical assistance to Dashen Bank to strengthen its environmental and social due diligence, climate finance capabilities, and monitoring systems. This assistance is 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.
This partnership aligns with ongoing reforms in Ethiopia’s banking sector, including changes to banking legislation, regulatory oversight, and the gradual opening of the industry to foreign investment. Dashen Bank, one of Ethiopia’s largest private commercial banks with a nationwide network of more than 900 branches, will use the funds to offer longer-term financing to agricultural enterprises, exporters, and women-led businesses. 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.
“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.”
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