ETHIOPIA and the World Bank have inked loan agreements totalling $1.72bn aimed at bolstering crucial infrastructure projects amidst a backdrop of multifaceted challenges, the finance ministry announced on Friday.
The agreements entail a substantial allocation of $523 million to amplify Ethiopia’s electricity network and bolster renewable energy generation, as outlined in the ministry’s statement. Additionally, $500 million will be directed towards initiatives aimed at enhancing access to food markets, including the enhancement of rural road networks, the ministry confirmed.
Ethiopia, confronted with a myriad of crises including foreign currency shortages, continues to grapple with the lingering impacts of the Covid-19 pandemic, a two-year conflict in the northern Tigray region, and recurring bouts of droughts, floods, and locust invasions across various parts of the nation.
The remaining portion of the World Bank funding is earmarked for enhancing water supply infrastructure and supporting programs tailored to employ disadvantaged youths in urban areas, underscoring the comprehensive nature of the investment.
World Bank loans typically offer favourable terms, featuring low to zero interest rates and extended repayment periods ranging from 30 to 40 years. This financial assistance is poised to fortify Ethiopia’s resilience against ongoing challenges while providing a vital lifeline for essential development projects.