Ethiopian parliament approves loan agreements with BADEA and IDA
Addis Ababa, June 3, 2025 (FMC) — Ethiopia’s House of People’s Representatives (HoPR) on Tuesday approved two major international loan agreements signed with the Arab Bank for Economic Development in Africa (BADEA) and the International Development Association (IDA), aimed at boosting agro-industrial productivity and enhancing women’s health services.
The loans, initially referred to parliament by the Council of Ministers during its 46th regular session on May 29, 2025, are expected to support key national development projects in agriculture and health.
The first agreement is a $49.55 million concessional loan from BADEA to co-finance the Productivity Enhancement Support for Integrated Agro-Industrial Parks and Youth Employment (PESAPYE) project.
The initiative, also backed by the African Development Bank and the Ethiopian government, targets productivity improvements and youth job creation across four Integrated Agro-Industrial Parks.
Speaking during the parliamentary session, Government Chief Whip Tesfaye Beljige said the financing—comprising both loan and grant components—will be used to expand irrigation infrastructure in areas surrounding the industrial parks.
The funds will support the construction of irrigation tunnels, water reservoirs, and water distribution systems across 8,000 hectares.
Tesfaye added that $20 million will be disbursed in the first phase of the project, followed by the remaining $29.55 million in the second phase.
The loan carries a concessional interest rate, with a five-year grace period and 20-year repayment term.
Finance State Minister Eyob Tekalign noted that the investment will enable agro-industries to source raw materials from nearby farmers, fostering stronger linkages between agriculture and industry.
The second agreement approved by parliament is a SDR 45.1 million (approximately $61.2 million) loan from IDA, part of the World Bank Group, to finance the Innovative Systems to Promote Integrated, Resilient, and Enhanced Responses to Women and Girls’ Health (INSPIRER) project.
The IDA loan is interest-free, but carries a 0.75% service charge, a six-year grace period, and a 38-year repayment term.
The project is designed to modernize and expand technology-assisted, integrated health services tailored to the needs of women and girls.
Following an extended debate, the parliament unanimously ratified both draft bills, paving the way for implementation of the two development projects.