European Investment Bank (EIB), the international development arm of the EIB, is committing €110 million to expand agricultural finance in Ethiopia, with half of all funding earmarked for women and 20% directed toward climate adaptation, according to an EIB press release. The financing will flow through the Development Bank of Ethiopia to rural microfinance institutions and Rural Savings and Credit Cooperatives, ultimately reaching smallholder farmers and small businesses in rural areas who have historically had little or no access to formal credit. EIB Vice-President Ambroise Fayolle said the investment is “not just the right thing to do but also a strategic investment in the overall resilience of communities.”
The operation supports the third phase of Ethiopia’s Rural Financial Intermediation Programme (RUFIP III), a government flagship initiative to strengthen the agricultural sector’s access to finance, competitiveness, and climate resilience. Women make up more than half of Ethiopia’s agricultural workforce yet face persistently unequal access to credit — a gap this financing directly targets. An €8.5 million technical assistance component will go further, subsidising insurance premiums for weather-index products that protect smallholder farmers against climate shocks like droughts, floods, and pest outbreaks, while also building the institutional capacity of rural lenders to manage agricultural and environmental risks.
Ethiopian Finance Minister Ahmed Shide called the agreement “a significant strengthening of the longstanding partnership between Ethiopia and the EIB,” saying it will promote sustainable agricultural practices across all regions of the country. European Commissioner for International Partnerships Jozef Sikela added that Ethiopian smallholder farmers — especially women — will gain access to finance “they have never had before.” The project is part of the EU’s Global Gateway strategy and builds on more than 40 years of EIB cooperation with Ethiopia, with FAO, IFAD, and WFP also contributing advisory and co-financing support.
EIB Global’s existing investment portfolio in Ethiopia stands at €577 million, and the institution says further projects are in the pipeline across energy, water, sanitation, SME support, and women’s entrepreneurship. For the country’s rural communities — already coping with climate volatility and deep economic exclusion — the combination of credit access, climate insurance, and institutional strengthening represents one of the more comprehensive rural finance packages Ethiopia has seen in years.
