Britain Wants Ethiopia to Stop Being an Aid Case and Become a Climate Power

May 3 , 2026.

Leslie Maasdorp, now chief executive officer of British International Investment (BII), arrived in Addis Abeba last week with more than two decades of experience in global banking, multilateral lending and public-sector reform. His career has been shaped by frontier markets, international capital and the restructuring of state-owned enterprises. Earlier in his career, he played a role in South Africa’s post-apartheid economic transformation, serving in government as special advisor to the Minister of Labour and as deputy director-general responsible for restructuring state-owned enterprises. Before joining BII, he spent nine years in Shanghai as vice president and chief financial officer of the New Development Bank. His record also includes senior roles at Goldman Sachs, Barclays Capital, and Bank of America Merrill Lynch, where he held leadership positions across international and African markets. Amanda McLoughlin is the development director for the Foreign, Commonwealth & Development Office (FCDO) at the British Embassy in Addis Abeba, a position she assumed in September 2025. She leads the UK’s development engagement in Ethiopia. The FCDO was established in September 2020 through the merger of the Foreign & Commonwealth Office and the Department for International Development (DfID). It was designed to bring diplomacy and development under one framework, with a mandate to advance and safeguard the UK’s interests globally. In Ethiopia, that work is increasingly tied to investment partnerships. The FCDO works with institutions such as BII to support development objectives through capital, reform assistance and private-sector engagement. The recent investment in electric mobility is one example of how the UK is linking development policy with commercial finance in sectors tied to urban services, climate goals and affordability. Keturah Campbell, editor-in-chief, sat with Maasdorp and McLoughlin to discuss the United Kingdom’s develop-ment footprint in Ethiopia and its growing use of investment-led partnerships to support the government’s reform and growth agenda. The discussion comes as BII makes a five-million-dollar debt commitment to an electric mobility company, Dodai, as part of a 13-million-dollar "Series A" round backing cleaner, more affordable urban transport.

Fortune: Given the United Kingdom's long history with Ethiopia, is there a change of view about its role in East Africa’s economic and climate future?

McLoughlin: We are recalibrating our approach in recognition of Ethiopia’s increased importance, particularly on climate and economic transformation. The shift is towards investment and partnership, with a stronger focus on human capital, systems strengthening, economic transformation and modernising humanitarian response, working closely with government and local institutions.

We are now at an inflexion point, reflecting Ethiopia’s growing role as an emerging power and as a key actor on climate and economic issues in Africa and beyond, demonstrated by its chairing and hosting of COP32. As a result, we are rethinking how we engage, moving from a traditional aid-and-donor-to-recipient relationship towards a more equal partnership focused on shared global priorities. This includes collaboration inside Ethiopia and internationally.

Q: What is the single biggest risk to Ethiopia’s development that your institutions are preparing to address?

McLoughlin: A major priority is climate risk. Ethiopia is one of the countries most exposed to frequent shocks, including droughts and floods, with recurring cycles that drive displacement as people move towards water sources or away from flood-affected areas. This poses a serious and growing threat to development. COP32 is an important opportunity to draw global attention to these challenges, not only in Ethiopia but also in all least-developed countries facing the acute impacts of climate change.

Another major concern is the crisis in the Middle East and the wider Gulf region, which is having a disproportionate impact on Ethiopia. This is being felt through fuel shortages, fertiliser supply constraints, and disruptions to supply chains, including key routes such as the Strait of Hormuz and Djibouti. Our focus is on supporting Ethiopia in managing these shocks and protecting the poorest and most vulnerable from their effects.

Q: Why are landslides in Ethiopia occurring outside the rainy season with limited reporting? What measures can prevent them from escalating to the scale seen recently?

McLoughlin: Building local resilience to climate-related impacts is very important, and this is not something that starts today. It has been underway for several years. We need to continue supporting local communities in managing watersheds in ways that help mitigate or prevent flooding. One example is the government-run rural safety net programme. The UK is a major partner in the programme, alongside the World Bank and Canada. We want to continue investing in it as an instrument that helps local communities, through livelihood work, to manage irrigation and watersheds in ways that protect against the adverse impacts of climate change.

Q: What role should Ethiopia’s meteorology sector and other government bodies play beyond daily weather forecasting in improving water management, irrigation planning and disaster preparedness? What gaps limit their effectiveness?

McLoughlin: Plans are often very strong in terms of how to address these issues. The diagnostics are clear, and the problems are well known. The question is how we work collectively to address them. COP is not the only answer. But COP32 is a great opportunity to bring global attention to these issues and showcase Ethiopia’s leadership, because excellent work has been done in many of these areas. COP32 offers a platform to say, "look at what has been done here," but also look at how strong and devastating the impacts are for people in Ethiopia and across Africa. It is an opportunity, but it is not the only answer.

Q: How do you balance risk when investing in fragile or conflict-affected areas?

Maasdorp: I will start with the broader context. The UK government has outlined a new approach to development, shifting from aid to investment and from a donor-recipient model to a partnership model. This aligns directly with how we have already operated over the past seven to eight years. When we invest in what we call frontier markets, where institutions, policy frameworks and regulatory systems are still developing, we have a clear strategy. BII now allocates around 25pc of its capital to these markets. In these environments, financial systems are often nascent, and policy frameworks are uneven. Our role is to act as a catalyst for market development.

We do not only invest in companies such as Dodai. We help support the broader ecosystem around them. Dodai, for example, is contributing to the development of the e-mobility sector, including battery-swapping infrastructure, and has already created close to 100 jobs. Our model is to invest in the private sector to help companies grow and become sustainable. These businesses then pay taxes, which governments can use to fund social infrastructure such as roads, schools and clinics. We see this as central to building green industrial value chains in Ethiopia. Companies such as Dodai may be small today, but they have the potential to scale over time.

Q: Many people are still accustomed to petrol vehicles. How long could it take for Ethiopia to establish a strong foothold in the electric vehicle (EV) sector and drive a meaningful shift towards electric mobility?

Maasdorp: Policy leadership is critical, and so is policy consistency backed by a clear regulatory framework. The government has signalled a strong commitment to reform, introducing changes across monetary policy, trade, sector liberalisation and the digital space. In this area, it has taken a more radical step by banning the import of traditional internal-combustion-engine vehicles. This reflects a decisive approach to accelerating the adoption of cleaner transport in Ethiopia.

It creates an opportunity for cleaner mobility solutions. The policy direction is clear; the next step is investor participation. We seek to be among the early movers, drawing on more than seven decades of experience investing across Africa, where our participation often helps build confidence for others to follow. Timelines are difficult to predict, as these transitions move at their own pace. But new investors are entering adjacent sectors and shaping the broader ecosystem. In clean transport, we see strong potential for this investment to generate wider multiplier effects across the market.

Q: How do you compare Ethiopia’s current trajectory with other African and developing countries?

Maasdorp: Ethiopia currently has the advantage of a government committed to a broad set of structural reforms to move away from an older, state-led development model that created inefficiencies. Economic development relies heavily on entrepreneurial energy and innovation, and that potential is constrained when the state dominates most sectors. The government has already begun opening key areas. Reforms are visible in sectors such as telecoms and banking, which were previously under a strong state monopoly. These sectors are now gradually liberalising. This represents considerable progress, which is why we are here and looking to increase our exposure.

However, it is also difficult to make direct comparisons with other countries, given differences in context, culture and history. Sierra Leone, for example, with its smaller population and post-conflict trajectory, presents a very different environment. What we are seeing in Ethiopia is a clear reform path being implemented despite external headwinds, which gives us confidence in its future direction. On climate specifically, there is growing recognition in the banking sector of the need for targeted programmes supporting women-led businesses and low-emission companies such as Dodai. We have invested in Dashen Bank, and we are now seeing other banks exploring similar initiatives.

Beyond our own investments, we engage with industry bodies to help shape understanding of these policy frameworks. When there is a clear roadmap, it creates direction and typically attracts more investment.

McLoughlin: You cannot directly compare countries because each context is distinct. But several highly important developments in Ethiopia stand out. These include macroeconomic reforms, with a clear determination to see them through. In the climate space, the Green Legacy Initiative has attracted international attention and is widely recognised as a strong and visible effort.

There are also developments in e-mobility, including initiatives we are looking at today, and growing momentum in carbon markets. Over the coming months, there is potential for one of the largest carbon transactions globally to come together, if all stakeholders align. The groundwork is already in place. What is now needed is engagement from investors and global regulators to finalise and scale the deal.

Maasdorp: What encourages us is the clarity of government policy, which has announced a target of 500,000 EVs by 2030. This provides a clear and ambitious direction, which helps entrepreneurs identify commercial opportunities. Dodai is responding directly to that agenda. On the impact on ordinary people, consider clean air. In many places, emissions from transport and coal-fired power stations near cities affect air quality. A shift to electric vehicles can make a major difference, improving air quality and overall quality of life.

Q: With UK aid budgets reduced, how is the FCDO ensuring Ethiopia still receives adequate support?

McLoughlin: We are often a point of stability in the system, even as aid budgets are reducing globally, not only in the UK. Over the past few years, we have focused on where to prioritise and how best to work in those focus countries. The good news is that Ethiopia has recently been confirmed as a priority country. It remains a major development partner for us in weight and impact, and will be a top priority in the coming years.

However, the way we work will change. With smaller financial envelopes, we will rely less on funding alone and instead bring a wider set of UK government tools to Ethiopia. This includes bilateral programmes, expertise from UK universities and research institutions, and influence over multilateral organisations such as the World Bank, the Global Fund and Gavi, where we are major shareholders. This allows us to influence how resources are used more broadly, rather than focusing only on our own bilateral spending. We are working more strategically across systems, in close collaboration with partners, moving beyond traditional programme delivery models.

Maasdorp: Development finance systems are well capitalised, as decided in London. We can maintain investment levels over the next five years, as we have in previous years. But budget pressures are real; governments are facing high costs, and we are adapting our business model to address current challenges. One key shift is a stronger focus on using our capital catalytically. Rather than only deploying investment directly, we are working to mobilise more pension funds, insurance capital and asset managers. The purpose is to reduce risk in specific investments and to make them more attractive for local institutions to participate in.

Our ability to invest in countries such as Ethiopia is increasing because we now have a higher allocation to least-developed countries, where development needs are greater, and our capital can have the most impact. Over the next five years, 25pc of our capital each year will go to least-developed countries. We are taking on more risk relative to some of our peers.

Q: Turning to education, what tangible changes have been achieved through the Transforming Education in Ethiopia programme?

McLoughlin: We have been working with Ethiopia on education for a long time, around two decades of UK investment in the education system. Over this period, there have been clear successes, particularly in expanding access to education and strengthening exam systems. Work is also ongoing with the Ministry on the language of instruction.

Equity remains a key focus, ensuring that marginalised groups can access and benefit from schooling across the country. A major shared challenge is the impact of climate and conflict-related shocks on the education system. It is estimated that more than 10 million children may be out of school due to these factors. That is a serious concern. Some are engaged in home or online learning, but this is not a full substitute for formal education.

We are addressing this closely with the Ministry of Education through several channels. One is a World Bank trust fund, through which substantial financing is channelled and allocated according to government priorities. We maintain close dialogue with the Ministry on how best to use these resources. We are also planning to provide technical assistance aligned with the Ministry’s priorities, and several areas have already been identified for further support.

Further discussions will take place at the Education World Forum in London on May 17, 2026, where an Ethiopian delegation is expected to attend, likely led by Berhanu Nega (Prof.), the minister. These meetings will focus on where the UK can add value, through both technical expertise and financial support.

Q: What changes do you expect over the next five years?

McLoughlin: We have targets in place that we are working towards with the Ministry. These focus on continued progress in access for all, with particular attention to girls, children with disabilities and marginalised groups, especially in hard-to-reach areas. Even more important are improved learning outcomes, because access alone is not enough if the quality of education is poor. The focus is, therefore, on strengthening foundational literacy and numeracy for all children, particularly those from marginalised backgrounds.

As part of the shift from a traditional donor relationship to a more equal partnership, we are placing greater emphasis on long-term system strengthening. This means working with the government on policy reforms that can have a transformational impact for the next generation, informed by evidence from other countries and local experience. We are also entering into new partnerships, including global initiatives such as Gavi, the Global Partnership for Education, and Education Cannot Wait, all of which are supported by UK funding. These stakeholders are already active here, but we want to bring more global attention and partnerships to Ethiopia. We also want to play a convening role, bringing new partnerships and opportunities while continuing to work bilaterally with the Ministry.

Q Beyond limited access and conflict-affected regions, what are the key challenges you have observed within the education system?

McLoughlin: Literacy and numeracy rates can be quite low in different parts of the country, and that is a concern. One particular issue is the medium of instruction. English is the language of instruction in secondary education, but familiarity and fluency in English are not yet strong enough, including among the teacher workforce. The question is how we can support English as a language of instruction among both teachers and students. That is a major focus for us.

Q How many teachers have been trained under the TREE programme so far?

McLoughlin: The TREE programme is still in its early stages of implementation, with key foundations already in place to support full-scale delivery. By 2029, the programme plans to train 35,000 teachers and school leaders, with women comprising 50pc of participants. Its predecessor, the General Education Quality Improvement Programme for Equity, has already made meaningful contributions, strengthening the capacities of more than 21,497 school leaders and teachers. TREE will build on these achievements to further enhance quality and equity in education.

Q: What independent metrics or third-party evaluations do you have to verify the impact of your investments in the country?

Maasdorp: We do not use third-party evaluators in Ethiopia as such, but each investment is reviewed and approved by an investment committee in London. For every investment we make, we assess the development impact, and these assessments are validated and verified at the portfolio level.  Take our recent investment in Dodai. It is a new and growing company that will create jobs. By introducing a clean product that reduces emissions and bringing in battery-swapping innovation, it is helping to develop new business models. It also supports an emerging key economy, aligned with the government’s plan and digital transformation strategy.

Dodai is actively contributing to the industry's growth, including through the e-mobility association and by engaging in policy discussions with the government. It is not only an investment we are supporting, but the wider ecosystem around it. These are the impact metrics we assess in every investment decision.

Q: How do BII and the FCDO complement each other in investments?

Maasdorp: BII was established by the UK government and is 100pc government-owned. The FCDO is our shareholder. We work not only hand in glove. We are one component of the UK government's overall toolkit. There are other instruments in the development toolkit, including FSD Africa, which, for example, was one of the shareholders involved in the creation of the stock exchange here. Deepening financial markets creates opportunities for us to invest. The FCDO has a range of instruments, and we are one of them. We are not separate in how we work together. The FCDO enables our investments in this market.

McLoughlin: We work in a complementary way, as we both bring different strengths. The FCDO focuses on policy and enabling environments in the countries where we operate, helping to reduce market-access barriers and engaging governments through policy dialogue. Investors such as BII then invest in the private sector. It is a strong partnership, with each side playing a distinct role.

On measurement and progress, the FCDO has always placed strong emphasis on data and evidence, and we want to build on that over the next three years. The aim is to systematically evaluate and measure progress, strengthening the data and evidence base to continuously inform our next steps. This includes embedding annual reviews and strengthening the tools we use, such as evaluations, data monitoring and AI-supported analysis, to track progress through clear, measurable indicators each year. We can then assess whether we need to correct course, adjust how we work or scale up our efforts. This is also what we expect from the UK system more broadly.

Q: Ethiopia’s data structure is fragile. How do you work around limited information?

McLoughlin: It varies across sectors and areas of our work. We are fortunate to have strong relationships with both the ministries of Health and Education, each led by highly capable, technocratic ministers who understand the critical role of data in policymaking. We gain a great deal from these partnerships. Most recently, a household data survey conducted by the Ministry of Health provided a valuable dataset, helping us plan the next cycle of work and focus on priority areas.

Ultimately, it comes down to strong partnerships and ongoing dialogue with individual ministries and their plans. We are also investing in technical assistance and expertise for both ministries, including assessing progress, what is working and what is not. All of this contributes to strengthening how the ministries build their systems.

Q: Ethiopia has not conducted a population census in more than a decade. How does this data gap affect your investment decisions?

McLoughlin: We use different datasets from other sources that are willing to share them with us. We believe we now have a fairly strong outlook on what needs to be done in the coming years, based on the timeframes and partnerships we have in place.

Maasdorp: Many of our markets in Africa are facing powerful headwinds due to a changing macroeconomic environment. We are not short-term investors. We describe ourselves as patient and long-term capital. We recognise that Ethiopia, in particular, will face challenges as an importer from the Middle East, including jet fuel and other derivatives and products. From the meetings I have had with policymakers, I believe the government has a plan to manage this difficult structural transformation. We are confident that we will be able to increase our activities in Ethiopia, following our strategy of driving market-level impact, supporting businesses and helping to create an investable environment for others to follow.

Q: It is election season. How do you think the election outcome will affect your current investments and the policies being implemented?

Maasdorp: I have a high degree of confidence in policy certainty here. The government has a long-term programme with the International Monetary Fund (IMF), which two months ago gave a positive assessment on almost all macroeconomic metrics. The reform process includes many structural components. There is no reluctance to continue, nor any ambivalence about the future. The government, or whichever government is elected in June, will continue to implement these programmes because it has committed the country to a path aimed at long-term economic prosperity.

In this investment, we apply the "2X Challenge," which began around 2018 as an initiative to embed gender-lens investing into mainstream investment processes. This is also being implemented in Dodai, where job opportunities will be created. It is an important factor in how BII assesses its investments.

McLoughlin: It is encouraging to see democracy in action and elections taking place. We have not seen anything that suggests a shift away from the long-term reform agenda, including key efforts in the macroeconomy, education, and health sectors. Continuity is expected. COP32 is also a major focus of our work and will take place next year regardless of developments. This is something we are all working towards to ensure it succeeds. We are putting Ethiopia on the global map. Every single country in the world will descend here. It is an opportunity to showcase all of these successes.

PUBLISHED ON May 03,2026 [ VOL 27 , NO 1357]