Agriculture remains the backbone of Ethiopia’s economy, providing livelihoods for millions of people and generating a significant share of the country’s export earnings.
Yet much of the value from agricultural production is often captured outside the country, limiting opportunities for local businesses, farmers and communities. Teff, Ethiopia’s indigenous grain that is rich in nutrients, including protein, fibre and iron, is a clear example. Cultivated by more than 6.6 million smallholder farmers, it is central to the country’s food system and rural economy.
To help strengthen local value addition and connect Ethiopian producers to international markets, we are providing $5 million in flexible debt financing to Lovegrass, an Ethiopian agri-processing business that produces teff-based breakfast cereals, flours, snacks and powdered beverages for domestic and export markets.
Lovegrass sources teff from hundreds of smallholder farmers and reaches a further 1,000 indirectly through intermediaries. Alongside purchasing grain, the company supports farmers through training, improved agronomic practices and initiatives to reduce post-harvest losses. As the business grows, it plans to expand sourcing to an additional 2,000 farmers over the next five years, creating more economic opportunities across rural communities.
The company processes, packages and stores its products in Ethiopia, helping retain more value within the country while creating skilled jobs and strengthening domestic manufacturing capabilities.
Through exports to health-food markets in the UK and Europe, Lovegrass is also helping generate foreign exchange earnings and demonstrate the potential of Ethiopian-made products in global markets.
Darren Welch, His Majesty’s Ambassador to Ethiopia said: “I am delighted that UK support is helping Lovegrass to export the power of teff to global markets and generate jobs and opportunities for young Ethiopians. This investment shows how targeted assistance through our Manufacturing Africa programme, backed by strong diplomatic and trade and investment partnerships, can unlock impactful private investment.”
Chris Chijiutomi, Managing Director and Head of Africa at BII, said: “Countries like Ethiopia often face the steepest barriers to investment, but that’s precisely where catalytic capital can have the greatest impact. By backing businesses like Lovegrass, we’re helping Ethiopian smallholder farmers with improved economic opportunities from locally value-added exports. This demonstrates how our investment in Ethiopian-owned and led businesses can unlock resilient, inclusive growth in places that are hardest to reach.”
Yonas Alemu, Founder of Lovegrass, said: “This investment from BII is a profound vote of confidence in our team, our resilience, and our mission. It acknowledges that Lovegrass has moved beyond a proof-of-concept to become a high-performing Ethiopian manufacturing hub capable of meeting international standards. We are deeply grateful for BII’s trust, which provides the fuel for us to reclaim the value chain, empower our rural farming communities through scaled demand, and prove that world-class health food innovation can and should be ‘Made in Ethiopia’.”
This investment was supported by the Africa Resilience Investment Accelerator (ARIA), a collaborative initiative launched by BII alongside FMO and Proparco to help unlock investment in frontier markets across Africa. ARIA played a key role in advancing the investment, demonstrating how development finance partnerships can help channel capital to high-impact businesses in some of the continent’s most underserved markets.
It also highlights the strength of the UK’s Manufacturing Africa programme, which provided targeted support to help Lovegrass secure the financing needed to scale its operations and deepen its impact.
About British International Investment
British International Investment is the UK’s development finance institution and impact investor. The organisation invests in businesses in developing countries to improve people’s lives and help protect the planet. BII’s work targets the underlying causes of poverty and the climate crisis, helping countries break free from aid dependency for good.
Between 2026-2031, at least 40 per cent of BII’s total new commitments by value will be in climate finance. BII is also a founding member of the 2X Challenge which raised over $33 billion between 2018-2023 to empower women’s economic development. The company has investments in nearly 1,700 businesses and total net assets of £9.88 billion. For more information, visit: www.bii.co.uk | watch here. Follow British International Investment on LinkedIn, Bluesky and X.
