By Shire Abdi - Reporter
Somalia, 22 April 2026 The European Union resumed direct budget support to Ethiopia on Monday after a five-year suspension over Tigray war.
The €140 million package goes to Ethiopia’s national budget to help stabilize and modernize the economy.
European Commissioner for International Partnerships, Jozef Síkela, described the decision as a “clear sign of confidence” in Ethiopia’s reform efforts, particularly following the end of the conflict in northern Ethiopia.
Síkela added that the funding is part of a €240 million Annual Action Plan, which focuses on governance, health, and economic growth.
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The renewed cooperation also aims to deliver tangible improvements in people’s lives, with significant investment directed toward the RISE program, which has already reached over 4 million people by modernizing power grids and installing more than 2,500 kilometers of fiber optic infrastructure.
In addition, the EU has signed a €150 million package to support the digital economy, skills development, and governance, with plans to double the investment in the coming years.
Furthermore, the European Investment Bank (EIB) has approved a new €130 million credit facility to support smallholder farmers and rural businesses, particularly women-led enterprises and the agri-food sector.
These developments come as Addis Ababa hosts the 2026 EU–Ethiopia Business Forum, where discussions are focused on positioning Ethiopia as a key destination for European investment under the Global Gateway strategy.