Signature(s)
Summary sheet
- Credit lines - Credit lines
The operation consists in an intermediated loan to Zemen Bank to on-lend to exporting small and medium-sized enterprises (SMEs) and mid-caps in Ethiopia with a particular focus on projects related to agriculture, climate action and environmental sustainability. Additionally, the operation will also support projects promoting gender equality and women economic empowerment in line with the 2X challenge criteria.
The aim is to enhance access to finance to the target beneficiaries.
The operation aims to support primarily projects in the agriculture sector, one of the drivers of the Ethiopian economy, by way of senior loans up to an aggregate amount of EUR 20m through Zemen Bank. The loans will target private enterprises namely SMEs (min. 80%) and Mid-Caps (max. 20%), with complementary targets on climate action and environmental sustainability (min 30%) and gender objectives in line with the 2X challenge criteria (min 30%).
The operation will address several market failures, namely: i) imperfect/asymmetric information that agri- SMEs are confronted when applying for finance; ii) environmental externalities (e.g., through promotion of organic farming) and iii) climate externalities (e.g., reduction of GHG emissions through energy efficiency improvements).
The operation is aligned with the EU's external action, the NDICI that among others promotes the support of SMEs. The project will support the objectives of the Global Gateway, which aims to support Africa for improved agri-food systems, biodiversity, climate resilience, adaptation and sustainable growth. The proposed operation is expected to advance several Sustainability Development Goals (SDGs).
EIB contribution will also be highly additional in (i) providing long term loans up to 12 years in EUR or USD to local SMEs, (ii) mobilizing technical assistance to strengthen the promoter's implementation capacities and (ii) crowding-in other development finance institutions.
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Under EFSD+ Guarantee