ADDIS ABABA — The House of People’s Representatives (HPR) of Ethiopia has ratified a $500 million concessional loan agreement with the International Development Association (IDA). The approval occurred during an emergency session of the House, where the loan was passed by a majority vote aimed at bolstering the country’s economic framework.
According to Ethiopian News Agency, the newly approved loan is a crucial part of the Homegrown Economic Reform II initiative. This reform follows the initial phase which, despite various challenges, managed to achieve an average growth rate of 6.2 percent. The second phase will focus on repairing the macro economy and building upon the successes of the first phase.
The IDA has committed a total of $1.5 billion in financial aid and loans to Ethiopia, including $1 billion in grants and $500 million in loans. This specific loan of $500 million, which is interest-free and repayable over 38 years with a 6-year grace period, will be deposited in full into the government’s treasury. It will be utilized as direct budgetary support for the current Ethiopian Fiscal Year to further advance the government’s comprehensive economic reform agenda.
Earlier in the day, the Council of Ministers, in its 38th regular session, also sanctioned the $1.5 billion agreement with IDA, highlighting the government’s proactive approach to securing international financial support for its reformative endeavors.