ADDIS ABABA – Dashen Bank has concluded the 40 Million US Dollars financing agreement with British International Investment (BII) and the Dutch Entrepreneurial Development Bank (FMO).
FMO and BII announced their joint commitment of up to US$20 million in funding each to Dashen in late August 2023.
The financing agreement was signed on Friday on the sidelines of the World Bank-IMF Annual Meetings being held at Marrakech, Morocco.
Governor of the National Bank of Ethiopia Mamo Mihretu and UK’s Minister of State of Foreign, Commonwealth & Development Office Andrew Mitchell witnessed the signing event.
The deal has made FMO and BII the first foreign financial institutions to provide long-term funding to Ethiopia’s financial sector under the Central Bank’s 2021 intermediation directive for banks.
It also put Dashen among the first local banks to borrow from abroad for the purpose of on-lending the borrowed foreign exchange funds to agricultural exporters.
“With the exemplary co-lending of BII and FMO, Dashen Bank is breaking the ice in the materialization of the directive for foreign loans intermediation,” said Asfaw Alemu, CEO of Dashen Bank soon after the European financiers made the commitment.
The forex-denominated financing will enable the Bank with a footprint of 800 plus branches, to support export-oriented agribusinesses.
Like Dashen, the National Bank of Ethiopia says it expects “many more domestic banks to take advantage” of such facilities to provide forex funding to Ethiopia’s export sector.