The investment aims to help the Addis Ababa-based business scale up its processing capacity and broaden its range of teff-derived goods, supporting the firm’s ambition to create jobs, build local manufacturing strength and boost foreign currency earnings for Ethiopia’s economy, BII said in a statement.

By expanding production infrastructure and deepening value addition, the financing is expected to enhance export opportunities and strengthen rural income streams, the development financier added.

Teff is a tiny, nutrient-dense cereal indigenous to the Ethiopian highlands and is at the heart of the nation’s agriculture and diet, most famously used to make injera.

This grain is cultivated by millions of smallholder farmers and is central to both food security and rural livelihoods across the country.

Lovegrass Ethiopia, founded by entrepreneur Yonas Alemu, sources teff directly from local smallholders and processes it into a variety of products, from flour and cereals to pasta and snacks that meet international quality standards, helping to open up global markets for Ethiopian produce.

BII’s backing of Lovegrass Ethiopia comes amid wider efforts by the UK development financier to support agribusiness and value-added food processing in Africa, as part of its broader agenda to drive inclusive economic growth and build resilient supply chains.

In recent years, BII has increased its commitments across the continent, aiming to mobilize private capital into sectors such as agriculture, manufacturing and climate-aligned industries, generating employment and supporting sustainable development.

Under the new support, Lovegrass Ethiopia is expected to increase production volumes, create skilled roles in processing facilities, and deliver stronger market linkages for the teff farmers it works with, helping to deepen rural economic inclusion while expanding Ethiopia’s footprint in international food markets.