Mekelle/Tel Aviv/Nairobi/Pretoria/London
Germany Pledges EUR 206 Million to Boost Ethiopia’s Economic Reforms and Regional Stability
Addis Ababa, Ethiopia — December 10, 2025 — Germany has announced EUR 206 million in new development commitments to Ethiopia, reinforcing a strategic partnership that spans economic reform, regional stability, and humanitarian support for internally displaced persons (IDPs).
The pledge was made during a high-level meeting in Addis Ababa between delegations led by H.E. Reem Alabali-Radovan, Germany’s Federal Minister for Economic Cooperation and Development (BMZ), and H.E. Ahmed Shide, Ethiopia’s Minister of Finance. The talks coincided with the signing of the Ethio–German Three-Year Cooperation Framework Agreement (2025–2027), a roadmap that aligns German assistance with Ethiopia’s reform priorities.
EUR 206 Million in New Commitments
Germany’s latest funding package includes EUR 106 million for program-based Technical and Financial Cooperation, and EUR 100 million in direct budget support. The programmatic support targets three core sectors central to Ethiopia’s stability and growth:
Building peaceful and inclusive societies,
Transforming agriculture to improve productivity and resilience, and
Supporting sustainable economic development.
The direct budget support is tied to Ethiopia’s macroeconomic and structural reform agenda, which remains a central condition for continued development financing from international partners.
Ethiopia Outlines Reform Progress
Minister Ahmed Shide briefed the German delegation on Ethiopia’s reform trajectory, highlighting progress in improving the exchange-rate framework, modernizing logistics, facilitating trade, and upgrading public service delivery systems.
He underscored the energy sector as a critical bottleneck for growth, noting that investment gaps persist across generation, transmission, and distribution. Ethiopia is prioritizing private-sector participation and foreign direct investment (FDI) to close these gaps and strengthen competitiveness.
Germany Stresses Climate Leadership
Minister Radovan reaffirmed Germany’s global climate leadership and emphasized Berlin’s commitment to supporting Ethiopia’s green transition.
She noted Germany’s renewed contributions to flagship climate-finance mechanisms, including the Loss and Damage Fund and the Tropical Forests and Biodiversity Facility—areas where Berlin remains among the largest contributors.
Regional Security and Diplomacy
The discussions also covered rising instability in the Horn of Africa. Minister Ahmed expressed deep concern over the escalating crisis in Sudan, stressing the need for a Sudanese-owned peace process backed by coordinated international support.
Ethiopia reiterated its commitment to regional peacebuilding efforts and emphasized its diplomatic pursuit of secure and legal access to the sea—an issue Addis Ababa views as vital for long-term national security and economic sustainability.
German Private Sector Eyes New Opportunities
Both sides welcomed the growing interest of German companies, highlighted during the recent Ethio–German Business Forum. Investment prospects discussed include major infrastructure projects—such as the planned new international airport—as well as emerging opportunities in digitalization, high-tech manufacturing, and artificial intelligence.
Looking Ahead
The meeting closed with a joint commitment to deepen bilateral cooperation and sustain the momentum of Ethiopia’s reform agenda. The Ministry of Finance said the announcement was shared on its official platforms to underscore the government’s transparency and the strategic value of the Ethio–German partnership.
Germany’s latest financial package signals a renewed confidence in Ethiopia’s economic reforms and its stabilizing role in a turbulent region positioning the partnership as a key pillar of development cooperation in the Horn of Africa.
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