The World Bank has approved a $700 million loan to support Ethiopia’s financial sector. This funding focuses on restructuring balance sheets, recapitalizing the Commercial Bank of Ethiopia (CBE), and modernizing the regulatory framework of the National Bank of Ethiopia (NBE).
According to Addis Standard, the loan is part of the Financial Sector Strengthening Project (FSSP), which also aims to transform the Development Bank of Ethiopia (DBE) into a sustainable financial institution. Officials state the goal is to create a more resilient financial system that meets the needs of all Ethiopians.
In recent developments, Ethiopia’s House of Peoples’ Representatives approved a 54.6 billion birr capital boost for CBE. Additionally, legislators passed a law addressing 845.4 billion birr in non-performing loans accumulated by state-owned enterprises (SOEs) at the bank.
The new legislation empowers the Ministry of Finance to issue 10-year Treasury bonds, with a three-year grace period before repayment. The funds will be used to settle debts owed by SOEs, supporting Ethiopia’s broader efforts to stabilize its financial institutions.