The agreement, announced on Tuesday, includes a $1 billion grant and a $500 million loan, representing a significant step in the long-standing partnership between Ethiopia and the World Bank, according to the finance ministry.

The deal was signed by Ethiopian Finance Minister Ato Ahmed Shide and Maryam Salim, World Bank Country Director for Ethiopia, Eritrea, Sudan, and South Sudan.

The ministry noted that the financial support, part of the First Sustainable and Inclusive Growth Development Policy Operation, underscores the World Bank’s commitment to Ethiopia’s development aspirations.

 Over the past five years, the World Bank has become Ethiopia’s largest source of development finance, with the country currently receiving over $2 billion annually in concessional financing under the Bank’s IDA program. Half of this amount is provided as grants.

The World Bank’s portfolio in Ethiopia now stands at $15.5 billion, with $7 billion ready for disbursement, according to local media.