World Bank Approves $1.15 Billion Interest Free Loan for Ethiopia

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Ethiopia photo

Addis Ababa, Ethiopia

The World Bank has endorsed a $1,15 billion interest free loan to Ethiopia under its country partnership strategy (CPS) that will help the Horn of Africa nation implement poverty alleviation programmes.

The new funding approved by the Bretton Woods institution’s board of executive directors on Tuesday aims to build on the progress in economic development made by Ethiopia in the past five years.

Projects targeted for funding are those that are expected to accelerate economic growth, create more jobs and improve health and education.

The board said the bank would mobilise $ 600 million dollars in development financing for the third phase of the promoting basic services (PBS III) programme that targets 84 million people across Ethiopia.

It is co-financed by the Ethiopian government and other development partners such as the European Union, UK Department for International Development, African Development Bank, Italy, Austria, among others.

Since 2006, the programme has seen the government recruit over 100 000 new primary school teachers at the district level, more than 38 000 health extension workers nationwide and some 45,000 agricultural extension workers.

According to the World Bank, the programme has also promoted transparency and citizen participation in development programmes.

The institution said Ethiopia had reduced its under five mortality rate from 123 per 1,000 live births in 2005 to 88 per 1,000 live births in 2010.

“PBS III will contribute to Ethiopia’s rapid progress towards achieving many of the Millennium Development Goals, by providing funding for crucial staff to help to improve key services such as education, health, food production, water and sanitation, and rural roads,” said Guang Zhe Chen, World Bank’s country director for Ethiopia.

“Promoting improved access to quality, decentralised basic services is also central to the core elements of Ethiopia’s new CPS”

“Supporting the government’s impressive progress in expanding the road network, the Ethiopia Transport Sector Project will invest 415 million US dollars to upgrade five main roads that will play an important role in supporting economic growth in Ethiopia over the medium to long term by providing better access for industrial, agricultural and tourism developments, and will also provide improved access for beneficiaries in the project areas to essential services.”