The European Union and the Secretariat of the African Continental Free Trade Area have signed a memorandum of understanding on Thursday to accelerate implementation of activities under the Team Europe Initiative.

During the event held at the Addis Ababa Hilton, the EU has also announced financial commitments in support of Ethiopia.

The MoU is believed to give a boost to implementation of the Team Europe Initiative that include an earlier financing amounting to $1.2 billion in support of trade, investment and regional integration endeavors under the AfCFTA.

Accordingly, the MoU provides for strengthening trade systems, boosting investment, and supporting economic integration across Africa.

AfCFTA Secretary-General, Wamkele Mene — he signed the MOU with EU Commissioner for International Partnerships Jozef Síkela — said the $3.4 trillion GDP continental trading regime is creating a predictable and rules-based continental market that is improving Africa’s competitiveness as an investment destination.

He confirmed during the opening of a three-day EU-Ethiopia Business Forum that Ethiopia is among the countries already trading under AfCFTA rules, signaling progress in regional trade integration.

The MOU reflects what officials described as a growing shift from development-focused relations to partnerships centered on trade, investment, and shared economic growth.

A key highlight of the forum was the European Union’s announcement of renewed budget support to Ethiopia, including a financing package of more than €140 million.

The funding will target priority sectors such as energy, health, digital connectivity, and improvements to the business environment.

More than 500 European companies are taking part in the forum, reflecting strong investor interest in Ethiopia’s reform-driven economy.

State Minister of Finance Semereta Sewasew said Ethiopia is entering a decisive phase of economic transformation led by reforms designed to stimulate private sector growth.

She noted projections by the International Monetary Fund showing Ethiopia’s economy could grow by 9.2 percent in 2026.

Central to the reforms is the liberalization of the foreign exchange regime, which officials say is improving transparency, easing access to foreign currency, and creating a more predictable environment for investors.

Alongside budget support, the European Union is expanding investment through its Global Gateway strategy. A €150 million Digital Economy Package will enhance digital infrastructure, strengthen workforce skills, and improve governance systems.

In the energy sector, the €269 million RISE (Research on Improving Systems of Education) program will modernize electricity systems, rehabilitate the Ashegoda Wind Farm in the Tigray regional state, and deploy about 2,500 kilometers of fiber-optic cable to improve both power supply and connectivity.

The European Investment Bank also announced new financing for agriculture and food systems amounting over 140 million euro with a focus on supporting smallholder farmers and women-led enterprises.

Officials highlighted that Ethiopia’s ongoing economic reforms are opening major sectors—including telecommunications, finance, and retail—to foreign participation.

The entry of global retailer Carrefour into the Ethiopian market was cited as a sign of growing investor confidence.

Representing Austria, Foreign Minister Beate Meinl-Reisinger emphasized the importance of partnerships focused on innovation and investment, noting Austrian companies’ involvement in medical technology, 3D printing, and climate-resilient agriculture.

Themed “Unlocking Global Gateway Potentials,” the forum is expected to generate new business partnerships and identify flagship investment projects by the end of 2026.

“The opportunity is here. The momentum is real. Now is the time to act,” State Minister Semereta said, urging investors to turn interest into concrete, job-creating investments.