NAIROBI, April 21 (Reuters) - The European Union has

restarted budgetary support for Ethiopia following a five year

hiatus its commissioner for international partnerships said,

with a funding package of more than 140 million euro ($164.6

million).

The bloc suspended financing for Africa's second most

populous country at the start of 2021 due to fighting in the

northern Tigray region between the federal government and a

regional force, and the resulting humanitarian crisis.

Fighting stopped towards the end of the following year after

the signing of a peace deal, but tension have ratcheted up in

recent weeks due to disputes over its implementation.

* Resumption of budget support was announced as during a

joint business forum in the Ethiopian capital Addis Ababa on

Monday.

* An extra 150 million euro digital economy package will

focus on high speed internet expansion, youth skills development

and governance reforms designed to spur tech innovation.

* A broader package also includes 130 million euros of

European Investment Bank funding to boost Ethiopia's

agricultural sector and rural finance.

* "The resumption of budget support is a testament to our

confidence in Ethiopia's reform agenda and our long-term

commitment to this partnership," said Jozef Sikela, EU

commissioner for international partnerships.

* Ethiopia launched far-reaching economic reforms in

mid-2024, including the liberalisation of its birr currency, to

secure an International Monetary Fund loan programme and put its

debt overhaul back on track.

* It has secured a restructuring deal with bilateral

creditors, but a deal with bondholders to rework its sole $1

billion international bond has been delayed by objections from

official creditors over the terms.

($1 = 0.8503 euros)