Ethiopian Lawmakers Ratify Over 124 Million Euros in Concessional Loans for Economic Reforms, Power Sector Digitalization

Addis Ababa, July 14, 2026 (FMC) — Ethiopian lawmakers have unanimously ratified concessional loan agreements worth 124.6 million euros to support the implementation of the country’s Homegrown Economic Reform agenda and accelerate the digitalization of Ethiopia’s electricity transmission system.

The agreements, concluded with the governments of Italy and France, were approved during an extraordinary session of the House of People’s Representatives (HPR) convened today.

Lawmakers endorsed a 70-million-euro concessional loan agreement with the Government of Italy, provided as budget support under the World Bank’s Third Ethiopia Sustainable Growth and Development Policy Operation.

The financing will be channeled directly into the federal government’s budget to support the implementation of Ethiopia’s macroeconomic reform agenda and advance sustainable and inclusive economic growth.

The loan, which carries no service charge, includes a 16-year grace period and a 30-year repayment period, making it a highly concessional long-term financing arrangement.

Presenting the draft proclamation to the House, Chief Whip Tesfaye Beljige said the financing is intended to provide direct budget support for the government’s reform agenda across multiple sectors while advancing sustainable and inclusive economic growth.

The House also ratified a 54.6-million-euro concessional loan agreement between the governments of Ethiopia and France to finance the modernization and digitalization of Ethiopian Electric Power’s (EEP) Supervisory Control and Data Acquisition (SCADA), Energy Management System (EMS), and Asset Management System (AMS).

Tesfaye said the project is designed to strengthen technological capacity, improve operational efficiency and system responsiveness, and enhance transparency in asset management. He added that the initiative reflects the strong partnership between Ethiopia and France and will be implemented through concessional financing provided by the French government.

The French loan carries a highly concessional annual interest rate of 0.347 percent, includes a 10-year grace period, and will be repaid over 25 years.

Finance Minister Ahmed Shide told lawmakers that the project will digitally integrate EEP’s transmission lines and substations nationwide into a centralized SCADA/EMS control center, enabling real-time monitoring, supervision and operation of the national electricity transmission network while strengthening power sector asset management.

He said the project will also modernize substations, strengthen maintenance systems, connect transmission facilities through fiber-optic communication networks, establish a centralized transmission control system, and deploy advanced software platforms, sophisticated equipment and real-time data acquisition technologies to enhance the efficiency, reliability and resilience of Ethiopia’s electricity transmission infrastructure.

According to the minister, French companies, technologies and services will be utilized in implementing the project, which is expected to modernize the management of Ethiopia’s electricity transmission system through a centralized command and control center capable of supervising transmission lines and substations across the country in real time.

Ahmed further noted that the initiative forms part of a broader co-financing arrangement involving multiple international partners. Previous financing for the project was secured from the French Development Agency (AFD), while the European Union has provided grant support. The European Investment Bank (EIB) is also expected to contribute additional financing worth hundreds of millions of dollars to support further modernization of Ethiopia’s electricity transmission infrastructure.