Location: Ethiopia

Client: EU Urban Development Technical Facility (Executed as part of Citilinks)

Year: 2025-2026

Services: Urban Diagnostic and Strategic Advisory, Programme Design and Investment Planning, Stakeholder Engagement and Transition Management 

Partners: Citilinks

Areas of Impact: Climate Resilience & Low-Carbon Development, Sustainable Mobility & Infrastructure, Economic Development & Local Value Creation, Governance, Capacity & Smart Cities

Overview

The EU Urban Development Technical Facility commissioned a strategic scoping exercise to assess how EU engagement in Ethiopia's urban sector could support the implementation of the Global Gateway Strategy. The assignment examined why, what, and how future EU investments in sustainable urban mobility, logistics, infrastructure, urban services, and climate-resilient city development could strengthen private sector investment while supporting Ethiopia's urban development agenda, economic growth, and regional trade integration with other East African countries. 

Jens Aerts served as Team Lead, working together with the Citilinks team, the EU Urban Development Technical Facility, and the EU Delegation to Ethiopia. The assignment was delivered through three missions to six cities, two stakeholder workshops with the EU Delegation, and interviews and consultations with national and subnational authorities, urban stakeholders, and Member States.

Context and Challenge

Ethiopia is entering a decisive decade of economic reform, market diversification, private sector liberalisation, and urban transformation. Major investments in infrastructure, economic zones, and logistics are concentrated within three urban clusters—Addis Ababa–Adama, Dire Dawa–Jigjiga, and Hawassa—which together accommodate more than half of the country's urban population. At the same time, Ethiopia continues to urbanise at the fastest rate in East Africa, creating an unprecedented demand for housing, infrastructure, jobs, and urban services to support a population expected to triple over the next 35 years.

While investment opportunities are significant, they are accompanied by a challenging business environment that affects investment sustainability and implementation. Responding to these challenges requires stronger planning and financing for corridor infrastructure and urban development, alongside improved policies, institutional capacity, and coordinated investment strategies.

Project Implementation Approach 

The project was carried out between July 2025 and March 2026 under the mandate of the EU Urban Development Technical Facility. Through three field missions, the project team engaged with the EU Delegation, relevant international financial institutions, EU Member States, national and local authorities, stakeholders, private sector umbrella organisations, and key decision-makers. Field visits across Addis Ababa, Adama, Bishoftu, Dire Dawa, Jigjiga, Hawassa, and Modjo enabled the team to document ongoing and planned projects in the capital and other regions, particularly along the Global Gateway-supported corridor, while gaining first-hand insight into local development priorities and investment opportunities.

The work focused on two complementary objectives: conducting a comprehensive assessment of Ethiopia's urban development sector and identifying strategic opportunities and risks for the EU Delegation to support urban development. Six priority investment areas for the private sector were identified based on the work streams: Sustainable Urban & E-Mobility; Urban Economic Infrastructure, Logistics and Industrial Zones; Urban Water and Waste Management; Housing, Livelihoods and Construction; Climate Resilient Cities; Urban Governance, Management & Digitalisation.

A geographical mapping exercise established a strategic framework across multiple scales, linking regional corridors, city-to-city connections, and urban clusters. Building on a multi-criteria analysis, the team identified 10 priority investment opportunities in these six sectors, for the preparation of new urban development investments, including pilots and strategic partnerships, led by the EU, its Member States, and the private sector. The team also formulated recommendations to inform future actions and supported the preparation of the next Multi-Annual Programme (2028–2035).

Impact 

The scoping assignment established a strategic framework for future EU urban development investments in Ethiopia. Through analytical reporting, geographical mapping, and stakeholder engagement, it provided the EU Delegation with a clear geographical and thematic focus to guide future programming under the Global Gateway Strategy. 

• 3 field missions completed across 7 Ethiopian cities.

• 6 priority investment sectors identified for future EU engagement.

• 10 priority urban investment opportunities identified through a multi-criteria assessment.

• Strategic recommendations developed to inform the EU Multi-Annual Programme (2028–2035).