Ethiopian Minister of Finance Sufian Ahmed and Italian Ambassador to Ethiopia Guido La Tella signed the agreement as representatives of their respective governments.

The loan will finance a portion of the costs for civil works and part of the electro-mechanical and hydro-mechanical works of the Gilgel Gibe II, which is an extension of the Gilgel Gibe I hydro power station.

The agreement is part of the commitment the Italian government made when Ethiopian Prime Minister Meles Zenawi visited the European country.