The loan supports Ethiopia's efforts to create new jobs in the manufacturing sector through the development of industrial zones in Addis Ababa and enhancing their links with the local economy.
State Minister of Finance and Economic Development, Ahmed Shide, said that the establishment of industrial zones will spur both foreign direct and domestic investments to Ethiopia.
The country is now "establishing industrial zones to use as a platform for catalysing investment and job creation, with a focus on export-led manufacturing," Shide explained.
This project will provide large and medium-sized firms with new, serviced industrial land and buildings, including water, electricity, and transport connections, and with a one-stop shop to reduce the transaction costs of doing business.
It will also target small to medium enterprises that will act as local suppliers for the light manufacturing sector, as well as sector institutes that will be involved in project implementation and in developing skills and training of workers with requisite skills.
World Bank's country director for Ethiopia, Guang Zhe Chen said "the project will help strengthen government's jobs agenda by drawing lessons learnt from global practices, as well as attracting new investors."