Ethiopia Sets Sight on Access to Climate Financing

Feb 21, 2014

Representatives from the Ethiopian Government, Development Partners and non-governmental actors met in Addis Ababa to share experiences around climate financing from Eastern and Southern Africa.

The roundtable discussion, held on 21 February 2014, was organised by UNDP to foster dialogue among Ethiopia’s key stakeholders and identify the country’s needs, priorities and progress made so far with a view to improve its readiness to access climate financing.

The event drew high level participation from the Ministry of Finance and Economic Development (MoFED), the Ministry of Environment and Forest, the Development Bank of Ethiopia, the World Bank, Department for International Development (DFID) and the Climate and Development Knowledge Network.

The roundtable discussion is part of a broader UNDP-supported strategic initiative on Readiness for Climate Finance which was successfully launched at 19th Conference of Parties (COP 19) in Warsaw in November 2013. The initiative involves in-depth analysis and stakeholder discussions in Ethiopia, Kenya, Lesotho, Mozambique Tanzania and Zambia, coupled with benchmarking against related initiatives and progress in other developing countries.

Findings from the other five countries and the initial findings from Ethiopia’s country case study were presented and widely discussed. Participants noted that Governments in developing countries often have to overcome three major challenges when implementing low carbon and climate resilient development strategies:

·        Accessing new and innovative climate finance sources;

·        Creating linkages between climate change strategies and national development objectives; and

·        Identifying how to use limited public finance resources to attract private capital.

Presenting findings on Ethiopia, the consultants highlighted that the country had already tackled many of these challenges successfully. There was also said to be a high level of the readiness and understanding of climate finance in Ethiopia, strong institutional arrangements set up and political commitment to support Ethiopia’s aspiration to gain accreditation to the global Adaptation Fund and consequently, the newly established Green Climate Fund.

Ethiopia's Climate Strategy


Ethiopia launched its Climate Resilient Green Economy (CRGE) Strategy in 2011 setting out the country’s vision and strategy to transform its development planning, investments and outcomes and thereby achieves a middle-income carbon neutral economy status by 2025.

The strategy provides Ethiopia an opportunity to leapfrog to modern energy-efficient course of development that improves resilience, ensures carbon abatement, enhances avoidance of future emissions, as well as fosters both economic development and less carbon dependent growth.

Over the past two years, Ethiopia has witnessed a flurry of activity around the design of policy and financial instruments, institutional arrangements and projects aimed at implementing the CRGE strategy.

One of strategic steps taken by Ethiopia has been the establishment of the Climate Resilient Green Economy Facility.  

Since its establishment in September 2012, various measures have been taken to make the Facility operational, including, signing the memorandum of agreement with the UNDP Multi Partner Trust Fund Office and MoFED; establishing the CRGE Facility Secretariat at the MoFED and developing an operational manual for the facility.

The roundtable participants commended the progress that Ethiopia has made during the past few years and commended the government for its strong leadership and commitment to implement the CRGE strategy; The governance structure has been set up, new staff have been recruited for the technical and financial team, and cooperation between the MoFED and the Ministry of Environment and Forest (MoEF) has been strengthened.

So far Austria has channelled 630,000 euros and UK is committed to channel 15 million pounds through the CRGE Facility. Ethiopia is said to still need substantial financing from international, domestic, public and private sources to transfer technologies and support actions to boost green and inclusive growth path of development.

Building Ethiopia’s green economy requires an estimated total expenditure of around USD 150 billion over the next 20 years – an average of USD 7.5 billion per year with a strong role anticipated for a dynamic private sector to mobilise some of the much needed resources.

UNDP in Ethiopia


UNDP strongly supports Ethiopia’s efforts to pursue a Climate Resilient Green Economy and is associated with the initiative right from the start. UNDP’s work on Readiness for Climate Finance helps catalyses and contributes to the Government’s strategic efforts to increase access and absorptive capacity of climate finance to enhance Ethiopia’s efforts to combat the impacts of climate change.

By expanding the capacity of national institutions, UNDP seeks to help Ethiopia to access funds from both the Green Climate Fund and other funding sources. The acquired funds can assist the government to create larger, bankable projects and programmes and promote stronger low emission and climate-resilient development.

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