EIB Global and World Food Programme expand climate-risk insurance for Ethiopian smallholder farmers

The grant will complement EIB Global's €110 million credit line for the third phase of the Rural Financial Intermediation Programme (RUFIP III) in Ethiopia. The credit line is channeled through the Development Bank of Ethiopia and on-lent to eligible rural finance institutions. The grant is financed under the African, Caribbean and Pacific (ACP) Trust Fund 's Member States Compartment.

The initiative is designed to de-risk the agricultural portfolios of rural finance institutions under RUFIP III and help final beneficiaries accessing RUFIP III financing manage climate-related shocks. Activities supported by the grant will include capacity building for the Development Bank of Ethiopia, rural finance institutions and smallholder farmers, as well as the establishment of a Premium Guarantee Fund to pre-finance insurance premiums.

The Premium Guarantee Fund will help address borrowers' liquidity constraints and serve as a guaranteed mechanism for rural finance institutions that contract insurance on behalf of final beneficiaries in the event of premium payment defaults.

"Climate change remains one of the greatest risks to agricultural livelihoods in Ethiopia. Through this partnership with the World Food Programme, EIB Global is helping rural finance institutions and smallholder farmers better manage climate shocks, protect incomes and improve access to finance," said EIB Vice President Gelsomina Vigliotti. "By combining insurance, credit and capacity building, this initiative will strengthen resilience, support food security and create more sustainable economic opportunities for rural communities."

WFP will use its experience in rural finance and climate-resilience programming in Ethiopia to develop and pilot this index-based microinsurance scheme in partnership with private insurance companies. The products will be rolled out to selected rural finance institutions under RUFIP III through technical assistance, capacity building and awareness raising.

To support the scheme's long-term sustainability, WFP will initially administer the Premium Guarantee Fund before transferring its management to the Development Bank of Ethiopia.

"For millions of smallholder farmers in Ethiopia, climate shocks can quickly wipe out harvests, incomes and hard-earned progress, eroding gains that vulnerable communities have worked hard to achieve," said WFP Representative and Country Director in Ethiopia, Zlatan Milišić. "Access to finance is essential for increasing agricultural productivity, but climate risks often discourage both farmers and lenders from making productive investments. This partnership with EIB Global brings together climate risk insurance, rural finance and capacity strengthening to help farmers invest with greater confidence, protect their livelihoods when shocks occur and recover more quickly. It is an important step toward building more inclusive and climate-resilient financial systems in Ethiopia."

As a direct result of this operation, 210,000 smallholder farmers in Ethiopia are expected to be covered by adapted microinsurance products protecting them against loss of crops or livestock due to adverse weather conditions or natural disasters.

The grant is aligned with development-finance priorities by promoting stable incomes and sustainable growth for smallholder farmers in the face of climate change. It also supports micro, small and medium-sized enterprises by providing access to microinsurance to help de-risk economic activity.

# # #

Background information

About the EIB:

The European Investment Bank (ElB) Group is the financing arm of the European Union, owned by the 27 Member States, and one of the largest multilateral development banks in the world. In 2025, the EIB Group signed €100 billion in new financing and advisory services for over 870 high-impact projects under eight core priorities that support EU policy objectives: climate action and the environment, digitalisation and technological innovation, security and defence, territorial cohesion, agriculture and the bioeconomy, social infrastructure, strong global partnerships and the savings and investments union. Beyond long-term loans for large infrastructure, the EIB Group crowds in private investment for high-risk innovative projects and businesses, with a growing role in Europe's markets for venture debt, venture capital, guarantees and securitisations.

EIB Global is the EIB Group's specialised arm devoted to increasing the impact of international win-win partnerships and development finance, and a key partner of Team Europe and the Global Gateway strategy. EIB Global brings the EIB Group closer to people, companies and institutions through its offices across the world.

Photos of the EIB Group's spokespeople and headquarters, logo files and video B-roll for media use are available here.

About Global Gateway:

Global Gateway is the EU's positive offer to reduce the worldwide investment disparity and boost smart, clean and secure connections in digital, energy and transport sectors, and to strengthen health, education and research systems.

The Global Gateway strategy embodies a Team Europe approach that brings together the European Union, EU Member States, and European development finance institutions. This approach aims to mobilise up to €400 billion in public and private investments from 2021 to 2027, creating essential links rather than dependencies, and closing the global investment gap.

About World Food Programme:

The United Nations World Food Programme is the world's largest humanitarian organization saving lives in emergencies and using food assistance to build a pathway to peace, stability and prosperity for people recovering from conflict, disasters and the impact of climate change.

Follow us on X, formerly Twitter, via @wfp