Ethiopia has secured a €21 million grant from Germany to increase its membership share in the investment risk solution provider African Trade Insurance (ATI), writes Ethiopian Standard.
The grant deal between the two countries was signed electronically by Ethiopia’s State minister of Finance Semereta Sewasew, and two KfW Development Bank Group officials, on behalf of Germany.
The ministry of Finance says the grant is a part of the German government’s support to Ethiopia’s strategy to become a middle-income country by 2030 and its transition to a private-sector-driven economy.
“The grant shall be used to increase Ethiopia’s membership contribution to the African Trade Insurance agency (ATI),” the ministry added.
The Nairobi-based agency was founded in 2001 by African States and several other shareholders to ease the concerns of investors by providing a range of investment and political risk insurance products.
The agency officially started covering transactions in Ethiopia after the East African country became a member in 2016.
Addis Ababa will now increase its membership equity with the help of the newly secured €21 million grant from Germany.
The Ministry of Finance says this direct investment in the ATI as shareholder would play “a critical role in securing international investment and increasing business activity”.
“Through this contribution, an increase in insurance transactions with a focus on private sector growth in Ethiopia is expected to be mobilized,” the ministry added.
Last year, the African multilateral insurer provided a 10-year Investment Risk Insurance cover issued to Japan’s Sumitomo Corporation on its investment in Safaricom Telecom Ethiopia Plc.
It also backed a $159 million loan from the African Development Bank to fund Ethiopian Airlines’ fleet expansion with the purchase of an Airbus A350-900 jet.