ADDIS ABABA: (ETHIOPIA): The World Bank has approved $1.2 billion fund to support economic growth policies in Ethiopia.
The Board of Executive Directors approved the fund on Tuesday comprising a $600 million loan and $600 million grant from International Development Association (IDA), the bank said in a statement.
"The Government of Ethiopia has embarked upon a path of political and economic transformation. In addition to measures that build peace with Eritrea, the Government has recently broadened the political space to include opposition parties," according to the Bank.
The Ethiopian government also actively engaged in regional diplomacy, and announced a range of economic reforms designed to revitalize the economy by expanding the role of the private sector, Turkish news agency anadolu reported quoting World Bank.
Among the reforms were the plans to gradually boost the economy, introduce competition and liberalize sectors dominated by key state-owned enterprises.
"In light of these sweeping reforms, the Government has requested technical and financial support for the international community to implement its new pathway to growth.
The World Bank's new operation responds to that request," the bank added.
The fund also aims to achieve Ethiopia's vision of becoming a lower-middle-income country.
On Wednesday, Haji Ibsa, the Finance Ministry spokesman said that "Ethiopia's relations with the World Bank has improved over the past six months" since Abiy Ahmed took the office of prime ministr on April 2.
Established in 1960, the IDA helps the world's poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people's lives.
IDA is one of the largest sources of assistance for the world's 75 poorest countries, 39 of which are in Africa.