(170606) -- MINJAR ARERTI, June 6, 2017 (Xinhua) -- Children are seen beside a water tank in Minjar Arerti, Ethiopia, June 5, 2017. China foundation for poverty alleviation and XCGM Construction Machinery Manufacturing Company in China built 41 water cellars to solve water shortage in Minjar Arerti area, which is located 140 kilometers south east of Ethiopia's capital Addis Ababa. (Xinhua/Michael Tewelde)

INTERNATIONAL - The World Bank has signed a $1.3billion (R17.5bn) loan and grant agreement with Ethiopia to improve governance and fund an anti-poverty package that provides financial relief for people facing food shortages. 

The bank said on Friday that a loan of $700million would be used to “improve equitable access to basic services and strengthen accountability” in education, health, agriculture and other sectors. The remaining $600m was a grant to finance the Horn of Africa country’s “Rural Productive Safety Net” scheme, which is handing out cash or food to 8million people in exchange for participation in public development projects. 

Some 8.5million people in Ethiopia need emergency food. In June, a warning was issued that Ethiopia would run out of relief food for 7.8million people hit by the drought.