The World Bank agreed to provide $715 worth of aid to Ethiopia, the government said on Friday.
The aid includes "$600 million ($200 million in form of grant and $400 million in form of credit), for the implementation of Food Systems Resilience programme," according to the Ethiopian Ministry of Finance.
These funds "will be used to finance the improvement of the resilience of food systems and food insecurity preparedness", the ministry said.
The agreement is then set to provide grant funding of $115 million for a Horn of Africa pastoral economies project.
This will "enable the region to adapt to the impacts of climate change, commercialize livestock production in pastoralist communities, and ensure inclusion of the marginalized and vulnerable groups such as women in the sector," the ministry added.
Some observers noted a link between the funding and the Ethiopian government's recent announcement of a "humanitarian truce", which had been called for by Washington.
Ethiopian Prime Minister Abiy Ahmed announced on June 19 that a committee was studying possible peace negotiations with the Tigray People's Liberation Front.
In April, the World Bank gave Ethiopia a $300 million grant to help communities affected by the conflict.