This report [PROLINNOVA–Ethiopia Activity Report for the Year 2012] covers the period Jan–Dec 2012 and includes highlights of activities of Prolinnova–Ethiopia (PE). In 2012, a major policy challenge made it necessary for PE to change the host organisation for the Secretariat. The report describes the new institutional arrangement, the key achievements of the work on Local Innovation Support Funds, and the current status and future directions of the PE network.