EIB Launches Greening Financial Systems Programme to Strengthen Ethiopia’s Financial Sector Against Climate Change

EIB Launches Greening Financial Systems Programme to Strengthen Ethiopia’s Financial Sector Against Climate Change

(IN BRIEF) The EIB has launched the Greening Financial Systems (GFS) Programme in Ethiopia, aimed at enhancing the resilience of the country’s financial sector to climate risks. This initiative, supported by Germany’s International Climate Initiative, will help the National Bank of Ethiopia integrate climate considerations into the financial system, develop a green taxonomy, and strengthen climate finance. The program also supports Ethiopian commercial banks in building green finance capabilities, ensuring the country can seize green investment opportunities while addressing the challenges posed by climate change.

(PRESS RELEASE) LUXEMBOURG, 19-May-2025 — /EuropaWire/ — The European Investment Bank (EIB) has officially launched the Greening Financial Systems (GFS) Programme in Ethiopia, a groundbreaking initiative aimed at strengthening the resilience of Ethiopia’s financial sector in the face of climate change. The launch took place today at the Ethiopia Finance Forum, where Ethiopian and international partners came together to discuss the transformative potential of this collaboration. The program, supported by Germany through the International Climate Initiative (IKI), will work with the National Bank of Ethiopia (NBE) and commercial banks to integrate climate risks into financial systems, enhance climate finance, and develop a national green taxonomy to guide sustainable investments.

The GFS Programme will focus on embedding climate risk management into Ethiopia’s financial sector, strengthening the regulatory framework, and improving climate-related disclosures to ensure financial institutions are equipped to navigate the challenges posed by climate change. With Ethiopia among the countries most vulnerable to climate impacts, this program aims to protect the country’s economy and financial stability while positioning it to seize green investment opportunities that support long-term sustainability.

The Role of the National Bank of Ethiopia

The NBE plays a central role in the GFS Programme, leading efforts to integrate climate considerations into Ethiopia’s financial system. The bank has established an internal oversight and coordination team to guide the implementation of the program, monitor progress, and ensure that climate risks are considered across all regulatory and supervisory frameworks. The NBE’s leadership will also be instrumental in developing the country’s first National Green Taxonomy, which will set out which economic activities are considered sustainable and climate-aligned, providing clarity and consistency for financial institutions, regulators, and investors.

Governor H.E. Mamo E. Mihretu of the NBE emphasized the importance of the financial sector in mobilizing the finance needed for Ethiopia’s transition to a green economy. He stated, “The Greening Financial Systems initiative will enhance our capacity to guide the sector in adapting to a changing climate and unlocking green investment opportunities.”

Supporting Ethiopian Financial Institutions

In addition to regulatory improvements, the GFS Programme will support Ethiopian commercial banks and financial institutions in building green finance capabilities. This includes helping institutions develop green lending portfolios, improve climate risk assessments, and implement climate-sensitive credit evaluation frameworks. Capacity-building workshops will also facilitate access to green finance instruments, helping Ethiopian banks identify viable green projects and reduce their exposure to climate-related risks.

International Support and Partnerships

The GFS Programme in Ethiopia is part of a broader international initiative backed by the German government and implemented by the EIB, which also includes countries like Albania, Armenia, Kenya, Nigeria, and Rwanda. Ambroise Fayolle, Vice President of the EIB, welcomed Ethiopia to the program, stating, “By supporting the National Bank of Ethiopia, we are building an enabling environment that will unlock vital climate action and green investments, contributing to Ethiopia’s ambitious climate goals.”

H.E. Jens Hanefeld, the German Ambassador to Ethiopia, expressed Germany’s commitment to Ethiopia’s green transformation through the International Climate Initiative. He said, “Strengthening financial resilience and unlocking green investment is crucial for Ethiopia’s sustainable future.”

A National Green Taxonomy for Sustainable Growth

A key element of the program is the development of Ethiopia’s National Green Taxonomy. This taxonomy will provide a clear definition of sustainable and climate-aligned economic activities and investments, aligning domestic practices with international environmental, social, and governance (ESG) standards. The process will involve consultations with stakeholders and preparation of reporting guidelines to ensure consistent application across Ethiopia’s financial sector.

Addressing Ethiopia’s Climate Vulnerability

Ethiopia is highly vulnerable to climate change, facing risks from extreme weather events, drought, and food insecurity. These threats pose significant risks to the nation’s economy and financial stability. The GFS Programme, in collaboration with international partners, will support Ethiopia in not only managing these risks but also in capitalizing on green investment opportunities to build a more resilient and sustainable economy.

EU Support for Climate Action

H.E. Mrs. Sofie From-Emmesberger, EU Ambassador to Ethiopia, highlighted the partnership between the EU and Ethiopia in addressing climate change, stating, “By strengthening the financial sector’s capacity to manage climate risks and finance green projects, we are jointly advancing sustainable development and building resilience.”

Background information

About EIB Global

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. It finances investments that contribute to EU policy objectives.

EIB Global is the EIB Group’s specialised arm devoted to increasing the impact of international partnerships and development finance, and a key partner of Global Gateway. We aim to support €100 billion of investment by the end of 2027 — around one-third of the overall target of this EU initiative. Within Team Europe, EIB Global fosters strong, focused partnerships alongside fellow development finance institutions and civil society. EIB Global brings the EIB Group closer to people, companies and institutions through our offices across the world. High-quality, up-to-date photos of our headquarters for media use are available here.

More information about the Greening Financial Systems (GFS) technical assistance programme is here.

Media Contact:

Richard Willis
r.willis@eib.org
+352 4379 – 82155

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SOURCE: European Investment Bank