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Climate finance and water security

Ethiopia case study

Matthew Savage, Ana Mujica, Federica Chiappe and Ian Ross

Climate Finance and Water Security: Ethiopia Case Study

This assessment is being carried out by Oxford Policy Management . The team leader is Federica Chiappe and the project manager is Ana Mujica. The remaining team members are Ian Ross and Matthew Savage. For further information, please contact Ana Mujica at [email protected].

The contact point for the client is Louise Whiting at [email protected]. The OPM project number is 8416.

Oxford Policy Management Limited 6 St Aldates Courtyard Tel +44 (0) 1865 207 300

38 St Aldates Fax +44 (0) 1865 207 301 Oxford OX1 1BN Email [email protected]

Registered in England: 3122495 United Kingdom Website www.opml.co.uk

© Oxford Policy Management i

Acknowledgements

This study was commissioned by WaterAid. We would like to thank Mr Gossa Wolde, Mr Abera

Endeshaw and colleagues at WaterAid Ethiopia; Mr Yibeltal Fentie, and all key informants for their

support and contributions to this study.

The views expressed do not necessarily reflect WaterAid’s official policies. The authors are solely

responsible for the content of this document.

For more information about OPM, please visit www.opml.co.uk

mailto:[email protected]

mailto:[email protected]

http://www.opml.co.uk/


© Oxford Policy Management ii

Table of contents

Acknowledgements i

List of tables and figures iii

List of abbreviations iv

1 Introduction 1

2 Water security and climate change 2

2.1 Water security 2

2.2 Observed and projected climate trends 3

2.3 The water security and climate change nexus 7

3 Climate finance 8

3.1 Climate policy architecture 8

3.1.1 National development plans 8 3.1.2 Environment and climate policy 8 3.1.3 Climate Resilient Green Economy 8

3.2 Climate finance architecture 9

3.2.1 Climate Resilient Green Economy Facility 9

3.3 Climate finance to date 10

4 Climate finance for water security 13

4.1 WASH and water-related activities 14

4.1.1 Project for Rural Water Supply in Tigray Region (A) 15 4.1.2 Adapting to Climate Change by Improving Water Resources Management (B) 16 4.1.3 Coping with Drought and Climate Change (B) 16

4.2 Future scope for water projects 18

5 Conclusions and policy recommendations 19

5.1 Conclusions 19

5.2 Recommendations 19

References 21

Annex A List of CFU projects and categorisation 23

Annex B List of stakeholders consulted 24

Annex C Summary of key stakeholder interviews 25

Annex D Summary of follow-up interviews 41


© Oxford Policy Management iii

List of tables and figures

Table 1 Agro-climatic zones of Ethiopia ......................................................................................... 4 Table 2 Summary of impact / vulnerability assessment for selected sectors ................................ 6 Table 3 Distribution of climate finance by funder ......................................................................... 12 Table 4 Distribution of climate finance by project categories ....................................................... 14 Table 5 Proposed adaptation options to cope with climate change impacts ............................... 15

Figure 1 Trends in water coverage by area (1990, 2000 and 2012) ............................................... 2 Figure 2 Trends in sanitation coverage by area (1990, 2000 and 2012) ........................................ 3 Figure 3 Historic and projected temperature ................................................................................... 5 Figure 4 Historic and projected rainfall ............................................................................................ 5 Figure 5 Drought probability in Ethiopia........................................................................................... 6 Figure 6 Distribution of climate finance by focus ........................................................................... 11 Figure 7 Distribution of climate finance by type of instrument....................................................... 12


© Oxford Policy Management iv

List of abbreviations

ADB Asian Development Bank

CFU Climate Funds Update

CRGE Climate Resilient Green Economy

EE Executing Entity

EEA Ethiopian Economic Association

ENSO El Niño Southern Oscillation

EPRI Economic Policy Research Institute

FAO Food and Agriculture Organisation of the United Nations

FCPF-RF Forest Carbon Partnership Facility – Readiness Fund

FSF Fast Start Finance

GCCA Global Climate Change Alliance

GDP Gross Domestic Product

GEF Global Environment Facility

GGGI Global Green Growth Institute

GHG Greenhouse Gas

GTP Growth and Transformation Plan

IE Implementing Entity

IKI International Climate Initiative

ITCZ Inter-Tropical Convergence Zone

IWRM Integrated Water Resources Management

JICA Japan International Cooperation Agency

JMP WHO / UNICEF Joint Monitoring Programme

LDCF Least Developed Country Fund

MDG Millennium Development Goal

MoEF Ministry of Environment and Forests

MoFED Ministry of Finance and Economic Development

MoWE Ministry of Water and Energy

NAPA National Adaptation Programme of Action


© Oxford Policy Management v

NDA National Designated Authority

NMA National Meteorological Agency

OECD CRS Organisation for Economic Development and Cooperation – Creditor Reporting System

OECD DAC Organisation for Economic Development and Cooperation – Development Assistance Committee

ODA Official Development Assistance

ODI Overseas Development Institute

OPM Oxford Policy Management

PASDEP Plan for Accelerated and Sustained Development to End Poverty

PSNP Productive Safety Net Programme

REDD+ Reducing Emissions from Deforestation and Degradation

SCCF Special Climate Change Fund

SCIP Strategic Climate Institutions Programme

SDPRP Sustainable Development and Poverty Reduction Programme

SLMP Sustainable Land Management Programme

SRAP Sector Reduction Action Plan

SREP Scaling-Up Renewable Energy Program

SRM Sector Reduction Mechanism

TRAP Thematic Reduction Action Plan

UAP Universal Access Plan

UK United Kingdom

UNFCCC United Nations Framework Convention on Climate Change

UNICEF United Nations Children’s Fund

UN-REDD United Nations Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation

US United States

WASH Water Supply, Sanitation and Hygiene

WHO World Health Organisation


© Oxford Policy Management 1

1 Introduction

This Ethiopia case study has been developed for the project ‘Research on climate finance and

water security’, funded by Water Aid. The project aims to identify the type and scale of national and

sub-national programmes, and projects that have been funded by climate finance and how they

relate to local water security.

The methodology and definitions used are fully explained in the Inception Report and so are not

repeated in this assessment, but are referenced where appropriate. This report is based on:

1. A review of secondary literature;

2. Key informant interviews with water and climate change stakeholders in Ethiopia; and

3. Project-level data from the Climate Finance Update (CFU) and the OECD Creditor Reporting

System (CRS).

This case study is structured as follows:

Section 2 reviews the evidence base on water security and climate change for Ethiopia, and

explores the nexus between the two thematic areas;

Section 3 reviews the policy and institutional frameworks for climate finance in Ethiopia, and

sets out an analysis of the reported climate finance funds flowing from international donors

(as reported in the Climate Finance Update database);

Section 4 sets out an analysis of the identified climate finance flows categorised in terms of

their relevance to a hierarchy of water security issues; and

Section 5 presents the conclusions and recommendations.

The Annexes contain the complete list of climate finance projects for Ethiopia, together with a list of

the stakeholders interviewed. A total of 17 key stakeholders, including donors, government parties

and national climate change agencies, were interviewed. Summary notes for these KIIs can also be

found in the Annexes. Fieldwork was undertaken by Federica Chiappe of OPM and Yibeltal Fentie

in January 2015.



2 Water security and climate change

2.1 Water security

Although Ethiopia has abundant water resources, with a mean total surface water flow of 122 billion

m3 per year, they are unevenly distributed across the country. Indeed, while around 85% of surface

is found in the Western basins, only 40% of the population lives in these areas (Calow, Ludi & Tucker,

2013). Ethiopia also experiences frequent droughts and high rainfall variability, which have a direct

effect on water availability at different points in time.

Ethiopia has 12 major river basins (the majority of which are transboundary) that form four key

drainage systems: (1) the Nile Basin, covering 33% of the country; (2) the Rift Valley, which covers

28%; (3) the Shebelli-Juba basin, also covering 33%; and (4) the North-East Coast, which covers

the remaining 6% (Frenken, 2005). Groundwater more widely available and provides around 90% of

the drinking water supply. However, in some areas groundwater may only be found at great depths

(e.g. Somali Region) or may be chemically polluted (Calow et al, 2013).

Ethiopia relies heavily on rain fed agriculture, but still 94% of total water withdrawal is used for

irrigation, with the remaining 6% used for domestic purposes (Frenken, 2005). Joint Monitoring

Programme (JMP) indicators suggests that improved water coverage has increased substantially in

the past decades, especially in urban areas. While in 1990 only 10% of the urban population had

access to piped water on premises, 51% had access in 2012. Overall, around 97% of the urban

population had access to an improved water source by 2012. In contrast, despite significant progress

since 1990, only 42% of the rural population had access to an improved water source by 2012, with

31% of rural households relying on surface water for drinking (Figure 1). Given the frequency of

drought in the country, a high dependency on surface water for drinking poses serious risks to the

livelihoods of the poor – and even more so in the context of rainfall uncertainty and climate change.

Figure 1 Trends in water coverage by area (1990, 2000 and 2012)

Source: WHO / UNICEF JMP (2015).

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 2000 2012

Urban

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 2000 2012

Rural

Other unimprovedSurface waterOther improvedPiped on premises

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 2000 2012

Total



Figure 2 shows the progress in sanitation coverage between 1990 and 2012. Although coverage of

improved and shared sanitation has increased in rural areas from 0% to 30%, 43% of the population

still practiced open defecation in 2012. On the contrary, open defecation was common in only 8% of

urban households in 2012, with the majority using either shared (42%) or improved (27%) facilities.

Overall, national coverage follows rural trends, with a high proportion of the population still practising

open defecation or relying on unimproved facilities. The high level of open defecation in rural areas

is of great concern in the context of a high dependence on surface water for drinking, as it increases

the likelihood of water pollution and the transmission of water-borne diseases.

Figure 2 Trends in sanitation coverage by area (1990, 2000 and 2012)

Source: WHO / UNICEF JMP (2015).

Ethiopia’s investments in mitigating the impacts of hydrological variability as well as developing its

water resources have been limited. The government has recently launched the Growth and

Transformation Plan (GTP), through which significant investments in hydropower, irrigation and flood

control have been planned. In particular, the GTP recognises the importance of guaranteeing access

to water, as well as promoting watershed management and conservation to cope with climate

change. The Ministry of Water and Energy (MoWE) also launched an updated Universal Access

Plan (UAP) in 2010 to achieve the MDGs related to water and sanitation, while Ethiopia’s National

Adaptation Programme of Action (NAPA) highlights the role water development and management in

building future climate resilience (Calow et al, 2013).

2.2 Observed and projected climate trends

Observed climate trends

Ethiopia encompasses five agro-climatic zones that have different topographic and climatic

conditions, as shown in Table 1. Temperature ranges from about 10°C in the highlands in the

Northwest, Central and Southeast to 35°C in the North-eastern lowlands. Rainfall ranges from

2,000mm over some areas in the Southwest to less than 250mm over the Afar and Ogaden lowlands

(EEA & EPRI, 2010).

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 2000 2012

Urban

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 2000 2012

Rural

Open defecationOther unimprovedSharedImproved

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 2000 2012

Total



Table 1 Agro-climatic zones of Ethiopia

Zone Altitude Mean annual temperature Mean annual rainfall

Berha < 500m > 25°C < 600mm

Kolla 500 to 1,500m 20 to 28°C 600 to 900mm

Weyna Dega 1,500 to 2,300m 16 to 20°C > 900mm

Dega 2,300 to 3,200m 6 to 16°C > 900mm

Wurch > 3,200m < 6°C > 1,400mm

Source: Calow et al (2013).

Nonetheless, the country generally shares three common seasons, which are largely determined by

the Inter-Tropical Convergence Zone (ITCZ):

Kiremt, the main rainy season (June – September);

Bega, the dry season (October - January); and

Belg, the short rainy season (February – May)

The intensity of rainfall is also determined by the El Niño Southern Oscillation (ENSO), which tends

to reduce rainfall in the main rainy season and increase rainfall in the Belg season (Calow et al,

2013).

Estimations suggest that between 1960 and 2006 mean annual temperature increased by 1.3°C,

with an increase in the number of hot days and nights by 20% and 38% respectively (McSweeney,

New & Lizcano, 2010). Additional estimations also show that in the past 60 years, the country has

experienced several dry and wet years, as well as an increase in the number of warm and cool years.

Rainfall trends have remained relatively constant across the whole country, although there is some

indication that annual rainfall is decreasing in the South (EEA & EPRI, 2010; McSweeney et al,

2010).

Projected climate trends

Mean annual temperature is expected to increase by 1.1 - 3.1°C by the 2060s and 1.5 - 5.1°C by the

2090s. Estimations also point to a further increase in the number of hot days and nights, as well as

an increase in the number of cold days and nights. Rainfall projections suggest an increase in annual

rainfall, especially during ‘heavy’ rain events (McSweeney et al, 2010). Further estimations from the

World Bank (2010) indicate that in a ‘dry scenario’, mean annual rainfall will decrease by 10-25% in

the Central highlands, by 0-10% in the South, and by more than 25% in the Northern areas of the

country. On the contrary, in a ‘wet scenario’ mean annual rainfall would increase by 10-25% in the

South and Central highlands and by more than 25% in the rest of the country.

The National Meteorological Agency (NMA) had previously reported a central projection of

approximately 1°C increase by 2020, 2°C by 2050 and 3°C by 2080 relative to the baseline of 1961-

90. However, there is a large range around these projections, as shown in Figure 3. Previous NMA

attempts to model future changes in rainfall also reported a large range (between -20% and +35%)

by 2050 relative to the baseline (Figure 4). This is similar to current levels of variability which make

rainfall difficult to project.



Figure 3 Historic and projected temperature

Figure 4 Historic and projected rainfall

The overwhelming message is one of uncertainty, with a large envelope of potential change.

Furthermore, Calow et al (2013) note that climate forecasts in Ethiopia are generally based on

inaccurate and unreliable information as there are several gaps in the observations recorded. The

high variability in climate and topographic conditions also limit the accuracy of climate change

projections.

Climate change impacts

Ethiopia is particularly vulnerable to climate change due to its location, topography and low adaptive

capacity. Changes in temperature and rainfall patterns and variability are likely to increase the

frequency of severe droughts and floods, which will subsequently have a negative impact on human

and livestock health, food security, and land degradation. Figure 5 shows the estimated probabilities

of drought across the country. As observed, many of the lowland areas in eastern Ethiopia have a



high drought probability, while the West and central North highlands have a low drought probability

(EEA & EPRI, 2010).

Figure 5 Drought probability in Ethiopia

Source: NMA (2007).

The National Adaptation Programme of Action (NMA, 2007) further identified the most vulnerable

sectors to climate change – both small-holder rain fed farmers and pastoralists were found to be the

most vulnerable populations, while the arid, semi-arid and dry sub-humid areas of the country were

identified as the most likely to be affected by drought. Table 2 summarises the different impacts and

vulnerable sectors identified by the NAPA.

Table 2 Summary of impact / vulnerability assessment for selected sectors

Sector Potential impacts

Agriculture Shortening of the maturity period and decrease in the crop yield.

Grasslands and livestock

Change in livestock feed availability.

Effects of climate change on animal health, growth and

reproduction.

Impacts on forage crops quality and quantity.

Change in the distribution of diseases.

Change in the decomposition rate.

Change in income and prices.

Contracting pastoral zones in many parts of the country.

Forests

Expansion of tropical dry forests and the disappearance of lower

montane wet forests.

Expansion of desertification.

Water resources

Decrease in river run-off.

Decrease in energy production.

Flood and drought impacts.

Human health Expansion of malaria to highland areas.



Wildlife

Shift in physiological responses of individual organisms.

Shift in species distribution from one to the next.

Shift in biomes over decades / centuries.

Shifts in genetic makeup of the population.

Loss of key wetland stopover and breeding sites for threatened bird

species and in general endemic and threatened species of flora and

fauna are frontline victims.

Source: NMA (2007).

To evaluate the effects of climate change on water security, the World Bank (2010) used a water

planning model to assess the potential interactions in the use of water across different sectors (i.e.

municipal and industrial, irrigation, and hydropower). Results indicate that, under a ‘dry scenario’

with priority allocated to agriculture, there is a significant loss of hydropower capacity. On the

contrary, if priority is given to hydropower, up to 1 billion m3 of water may be taken away from

agriculture, causing a 30-40% drop in crop yield.

2.3 The water security and climate change nexus

Projections from the IPCC 5th Assessment indicate that climate change (both natural and

anthropogenic) will likely amplify water stress in Africa. Droughts are expected to intensify in

Southern and Eastern Africa due to reduced rainfall or increased evapo-transpiration. Freshwater

ecosystems are particularly at risk from changes in land use, over-abstraction of groundwater,

diversions of rivers and lakes, and increased pollution and sedimentation. Groundwater resources

may also be affected, especially in areas receiving less than 500mm of annual rainfall, as is the case

of the Horn of Africa (Niang et al, 2014).

The World Bank has also identified four key mechanisms through which climate change may have

an effect on both economic growth and development: (1) productivity changes in dry-land agriculture;

(2) water availability; (3) road infrastructure maintenance and upkeep; and (4) extreme events (World

Bank, 2010). Drought frequently occurs and is considered an extreme climate event. Drought-related

disasters have occurred several times over the past twenty years across many parts of the country,

and have been particularly prevalent across the central and northern highlands. Furthermore, more

than 70% of the country is dryland, with annual rainfall in these areas being low and seasonal, and

having a high inter-annual variability.

The overall impacts of climate change on groundwater availability and quality are uncertain, and

much depends on the timing, frequency, and distribution of rainfall (Calow et al, 2013; World Bank,

2010). Some of the expected impacts of climate change on the sustainability of water services are

the following (Ibid, 2013):

1. Increased vulnerability of unimproved and shallow water sources;

2. Increased risk of saltwater intrusion and salinization of groundwater in coastal areas; and

3. Increased water stress due to the over-abstraction of groundwater resources.



3 Climate finance

3.1 Climate policy architecture

3.1.1 National development plans

Ethiopia has set out its development objectives in a series of national development plans, and these

documents shape programming at both federal and regional level. Development plans have

traditionally focussed on poverty eradication and economic growth, starting with the Sustainable

Development and Poverty Reduction Programme (SDPRP) from 2002 to 2005, and the Plan for

Accelerated and Sustained Development to End Poverty (PASDEP) from 2005 to 2010. More

recently, the Government is implementing development through the Growth and Transformation Plan

(GTP). The GTP aims to support Ethiopia in achieving middle-income country status by 2025 and

the MDGs by 2015. The GTP differs from previous plans by including climate change as a cross-

cutting issue within the strategic priority of ‘environment and climate change’ and seeks to create a

‘climate resilient green economy’ (CRGE). The CRGE approach is presented as a means of reducing

development losses caused by climate change impacts, securing economic interests (particularly

energy security) and moving towards sustainable production models. CRGE is also being integrated

into the next development plan – GTP II.

3.1.2 Environment and climate policy

The government ratified the United Nations Framework Convention on Climate Change (UNFCCC)

in 1994. The National Environmental Policy (2002) provides the overarching policy framework for

climate change considerations, and includes provisions on monitoring climate impacts, controlling

GHG emissions and promoting renewable energy. The Environmental Protection Agency was

responsible for the institutional response before this mandate was taken up by the Ministry of

Environment and Forests (MoEF). Work began on specific climate change strategies and

programmes in 2007, with the development of the National Adaptation Programme of Action (NAPA).

Further programmes include Nationally Appropriate Mitigation Actions (2010), the Ethiopian Program

of Adaptation to Climate Change (2010), the CRGE Vision and Strategy (2011), and the New Energy

Proclamation (2013). Broadly, these policy documents together articulate the country’s objectives

around climate resilience and a green economy.

3.1.3 Climate Resilient Green Economy

Ethiopia is one of the few countries that has brought together climate resilience and green economy

objectives under a single policy framework. Policy frameworks continue to evolve around the CRGE

process, but the indication is that climate change will be addressed as part of wider economic

development planning, rather than as an independent environmental issue. The government is

currently drawing upon existing laws and policies to inform its implementation.

Institutional arrangements for coordinating and implementing public policy responses for CRGE are

being developed and have been designed to achieve both federal and regional buy-in. The

responsibility of coordinating CRGE planning lies with the MoEF, which is complemented by financial

management on behalf of the Ministry of Finance and Economic Development (MoFED). The CRGE

Inter-Ministerial Committee, under the Council of Ministers, provides oversight of the CRGE process.

This Committee is the highest-level body within the CRGE institutional arrangements – it is

responsible for providing overall direction to the CRGE process and for approving financial decisions

of the CRGE Facility. The Committee comprises of State Ministers and senior officials from

participating institutions. The roles for line ministries and regional structures are still being defined,



but are likely to become implementing entities responsible for sector specific investment plans. The

government is seeking to embed institutional responsibility within existing federal and regional

institutions, with a view to building capacity. The government is also developing additional policy

documents, like the Sector Reduction Mechanism (SRM) to guide the integration and implementation

of CRGE investments within federal and regional plans. For example, the Government is integrating

CRGE initiatives into flagship development programmes like the Sustainable Land Management

Programme (SLMP) II and the Productive Safety Net Programme (PSNP).

3.2 Climate finance architecture

3.2.1 Climate Resilient Green Economy Facility

The Government of Ethiopia has established a funding mechanism to mobilise and disburse finance

for the CRGE strategy. This structure is known as the CRGE Facility (RoE, 2013). The government

aims to mobilise an estimated US $200 billion from national and international public and private

sources to implement the CRGE over the next 20 years.

Management arrangements for the CRGE Facility have been designed to support strong country

ownership. The Facility is guided by the strategic directions set by the Environmental Council and

the CRGE Ministerial Steering Committee. The Ministry of Finance and Economic Development is

responsible for the overall management of the Facility, with the Ethiopian Environmental Protection

Authority responsible for technical coordination.

The intended approach of the Facility is one of flexibility, able to access and pool both national and

international funds, including public, private and carbon finance. The Facility will be able to deploy a

range of instruments (grants, loans, guarantees, results based payments, etc.) depending on the

profile of the investment. The Facility has a focus on investments in renewable energy, and mitigation

and adaptation investments in the agriculture and forest sectors, through which water security

concerns are mainly addressed (e.g. water for irrigation) (R. Takele and G. Mamo, personal

communication, 22 January 2015).

The Facility is broadly expected to support two kinds of work:

1. Strategic work to support line ministries and regional governments in the implementation of

programmes and projects. Potentially, 75% of the Facility’s funds will be disbursed in this

way as pooled and non-earmarked funding, and donors will contribute to a fund to support

government priorities; and

2. Demand-driven activities identified by non-state actors, such as NGOs and researchers, in

collaboration with federal and regional entities. This funding could potentially be earmarked

by donors.

The Government of Ethiopia is currently designing institutional arrangements for accessing finance.

Participants will be divided into two groups. The first group, known as Implementing Entities (IEs),

include federal ministries or regional governments. They will have CRGE units embedded within their

structures and will be responsible for developing and implementing CRGE Sector Reduction Action

Plans (SRAPs). The MoEF will prepare Thematic Reduction Action Plans (TRAPs) for cross-cutting

investments. The second group, known as Executing Entities (EE), includes private sector and non-

state institutions (e.g. academic, financial, community). These institutions are responsible for

implementing concrete interventions, in collaboration with the implementing entity (RoE, 2013).

There is ongoing work to get the CRGE Facility accredited by the Adaptation Fund under the Kyoto

Protocol, with the aim of getting direct access to the Green Climate Fund.



The CRGE strategy is being supported in parallel by a number of multilateral and bilateral funds (e.g.

Strategic Climate Institutions Programme – SCIP – and Scaling-Up Renewable Energy Program –

SREP), trust funds, such as the Bio-Carbon Fund and SLMP II, and credit lines. Many of these have

been designed to support private sector development through the use of risk sharing and

concessional loans (e.g. Climate Innovation Centre, Rural Electrification Fund). Current activities are

being carried out under a temporary fast track scheme, and around US $45 million of funding have

already been secured (D. Yeo and W. Battye, personal communications, January 2015)

3.3 Climate finance to date

Official Development Assistance

Ethiopia receives considerable Official Development Assistance (ODA) and other financial flows,

estimated at over US $3.5 billion in 2011 (Eshetu et al, 2014). MoFED’s aid management system

holds data on donor funding for ongoing projects, pipeline projects and pledges made to various

sectors in Ethiopia.

Within all ODA, the value of ongoing projects related to climate change is US $393 million, with US

$19 million in the pipeline (i.e. agreed but not commenced) and an additional US $20 million pledged

in forthcoming projects (Ibid, 2014). Donor funding represents a significant amount of funding for

climate-related activities, and could go some way to reducing the gap between the expectations of

the CRGE strategy’s funding ambitions and available financing.

Government budgets

Despite an improved financial management system in the country, with average execution rates of

90%, budget credibility in the area of climate change is currently weak (with execution rates between

25% and 35%) and budgeted amounts having only a partial relationship with actual outturns (Eshetu

et al, 2014).

Climate change-relevant spending has also fluctuated considerably between 2008 and 2012, and

the estimated average annual percentage share of such expenditure was 15% of total government

expenditure, or 1.8% of GDP. Climate change-relevant programmes are generally of medium

relevance, and climate change is mostly a secondary objective (Ibid, 2014).

Local action

Financial resources at the local (woreda) level come mainly from federal transfers through the

regions and there is little or no flexibility to include additional activities beyond the framework plan

determined at federal and regional levels. Also, line ministry representation at the sub-national levels

is weak, with limited human and financial resources generally available.

CFU project-level data

According to the Climate Funds Update database, a total of US $123 million of climate finance have

been approved in Ethiopia since 20031. This is based on CFU’s definition of ‘climate finance’ (see

Inception Report, Section 2.4 for definitions) and is only representative of multilaterally-governed

funds. Some of these funds may have been considered as ODA by Eshetu et al (2014) as (1) there

is no clear distinction between ODA and climate finance in national accounts; (2) there is evidence

1 The CFU database is cumulative since 2003, and tracks all multilateral-governed funds focussed on climate finance. Data also contains information about major bilateral initiatives and some national climate change funds, but coverage is not universal. For more information, please refer to http://www.climatefundsupdate.org/about/data-figures-notes.

http://www.climatefundsupdate.org/about/data-figures-notes



of rebranding of development projects; and (3) there are no adequate monitoring systems (B. Simane

and W. Battye, personal communications, January 2015).

The majority of climate finance to date has been directed towards adaptation activities (41%),

followed by mitigation (32%) and reducing emissions from deforestation and degradation (REDD).

The remaining 13% of funds have been allocated to multiple foci activities (Figure 6). This distribution

seems to be consistent with identified climate change impacts across different sectors (i.e.

agriculture, forests, water resources and energy, and wildlife) (see Table 2).

Figure 6 Distribution of climate finance by focus

Source: CFU (2014).

Table 3 shows the distribution of total climate funds by funder. The Scaling-Up Renewable Energy

Program (SREP) has approved the largest amount of finance (25%), funding projects for the

development of geothermal and wind energy. The SREP is followed by Japan’s Fast Start Finance

(FSF), which has approved 21% of total funds to the country, and the UK’s International Climate

Fund (19%). However, there are significant disparities between the funds approved and disbursed,

with only 16% of funds or US $20 million disbursed to date2. This difference may be related to data

quality issues, e.g. frequency of updates to the CFU database and systematic tracking of projects3,

but may also be explained by the lack of reliable monitoring and reporting systems in Ethiopia (B.

Simane, personal communication, 20 January 2015). Key stakeholders also mentioned that low

disbursements could be related to limited capacity for funds management, and lack of coordination

and project prioritisation (W. Battye, personal communication, 8 June 2015).

2 The CFU defines approved funds as those that have been “officially approved and earmarked to a specific project or programme”. Disbursed amount refer to funds that have been officially spent. 3 Indeed, W. Battye of the GGGI was surprised by this figure and did not agree with it, suggesting that a higher proportion of climate finance has been disbursed to date (8 June 2015).

Adaptation, 40.5%

Mitigation, 31.8%

REDD, 15.1%

Multiple foci, 12.6%



Table 3 Distribution of climate finance by funder

Funder

% of

total

funds

Funds

approved (US

million)

Funds

disbursed (US

million)

Funds disbursed

(% of funds

approved)

Forest Carbon Partnership

Facility - Readiness Fund (FCPF-RF)

3% $3.8 $0.6 16%

GEF Trust Fund (GEF 5) 3% $4.1 $- 0%

Germany's International Climate Initiative

5% $6.6 $- 0%

Global Climate Change

Alliance (GCCA) 11% $13.2 $8.7 66%

Japan's Fast Start Finance 21% $25.8 $- 0%

Least Developed Countries Fund (LDCF)

9% $10.4 $5.5 53%

MDG Achievement Fund 3% $4.0 $4.0 100%

UK's International Climate Fund

19% $23.6 $- 0%

Special Climate Change

Fund (SCCF) 1% $1.0 $1.0 100%

Scaling Up Renewable Energy Program (SREP)

25% $30.6 $- 0%

Source: CFU (2014).

Figure 7 shows the distribution of climate finance by type of financial instruments. The majority of

funds are planned to be disbursed as grants (86%), with the remaining 14% of funds to be disbursed

under unknown arrangements. However, the latter relate to the Strategic Climate Institutions

Programme (SCIP), financed by the UK’s International Climate Fund, to which all other reported

funding is planned to be disbursed as a grant. Hence, it is likely that all climate finance provided to

Ethiopia is in the form of grants. Indeed, stakeholders mentioned that most of the funds are currently

disbursed as grants, but this is likely to change in the future, especially if more mitigation and carbon

sequestration activities are supported (B. Mengesha, personal communication, 20 January 2015).

Figure 7 Distribution of climate finance by type of instrument

Source: CFU (2014).

Grant, 85.8%

Unknown, 14.2%



4 Climate finance for water security

Following the methodology presented in the Inception Report, we have categorised CFU project-

level data to estimate the amount of funding directed towards water security or related activities.

Using the OECD Creditor Reporting System (CRS) coding, projects have been distributed in the

following water security categories:

Category A includes projects that are primarily related to Water Supply, Sanitation and

Hygiene (WASH);

Category B includes projects pertaining to ‘natural security resources’ that are inter-related

to water security, such as integrated water resources management (IWRM), agricultural

water resources, and water-related energy security;

Category C encompasses projects that are indirectly related to water security – mainly those

activities that present potential co-benefits or trade-offs from mitigation activities, such as

forestry; and

Category D includes climate finance projects that are not related to water security.

For Ethiopia, there are 20 projects in the CFU database. We looked for each of these projects in the

OECD Creditor Reporting System from 2007 (the date of approval of the earliest CFU project) until

2013 (the most recent year in OECD CRS) to be able to attach a specific CRS code to each of them

and proceed with the categorisation. However, only 11 of these projects were found in the OECD

database, so we had to rely on project-specific documentation to make a subjective judgement and

allocate them to each category accordingly. The full list of projects, along with the CRS codes and

categorisation is reported in Annex A.

Table 4 shows the final distribution of projects by water security categories. Out of 20 projects, only

1 is directly related to WASH (Category A), corresponding to 9% (US $11 m) of total approved funds.

There are 2 projects related to other natural water security resources (Category B), which

encompass 2.6% (US $3.2m) of total approved finance. Likewise, there are 2 projects that present

co-benefits or trade-offs related to afforestation and reforestation (Category C): the ‘Forest

Preservation Programme’ and ‘Promoting Autonomous Adaptation at the Community Level in

Ethiopia’. Overall, the bulk of international climate finance in Ethiopia is allocated to projects that are

not related to water security (Category D) – these account for 72% of the total funds approved. The

majority of these projects correspond to environmental policy and administrative management, with

some activities related to the development of geothermal energy, energy policy and disaster

prevention and preparedness.

Although CFU data is likely to be underestimating total climate finance in Ethiopia4, the distribution

of projects across categories is consistent with findings from the key informant interviews. While

some stakeholders suggested that there are currently no projects directed to address water security

concerns (G. Wolde, personal communication, 20 January 2015), others suggested that there were

some projects dealing with water through agriculture or energy but were not directly associated with

the water sector (B, Mengesha and A. Tesema, personal communications, January 2015). This is

partly explained by the lack of a national framework for water security. Finally, informants also

suggested that there seems to be less interest from donors to invest in the water sector, unless funds

4 Table 4 only includes climate finance from the CFU. Arguably, some other activities could also be included (such as those listed in Eshetu et al, 2014), but these are not included in the CFU database so do not fall under the definition of c limate finance in our methodology.



are directed to large infrastructure and irrigation projects (B. Mosello, personal communication, 24

January 2015).

Table 4 Distribution of climate finance by project categories

Project categories % of total

funds

Funds

approved (US

million)

Funds

disbursed (US

million)

No. of

projects

Water supply and

sanitation activities (A) 9% $11.0 $- 1

Other water-related activities (B)

3% $3.2 $1.0 2

Indirectly related to water (C)

16% $20.1 $5.3 2

Not related to water (D) 72% $88.8 $13.5 15

Source: CFU (2014).

The projects listed in the CFU database encompass both national and sub-national level activities.

National projects or programmes, such as the NAPA, the Strategic Climate Institutions Programme

(SCIP) or ‘Strengthening Climate Information and Early Warning Systems to Support Climate

Resilient Development’, are generally related to environmental policy and administrative

management. Sub-national activities are concentrated on renewable energy investments (i.e.

geothermal and wind farm development), and specific adaptation activities, such as IWRM and

coping with drought.

To have a better understanding of the types of activities funded by climate finance, we have

summarised the main project features for all projects categorised as either A or B in the following

sections.

4.1 WASH and water-related activities

Table 5 shows some of the proposed adaptation activities to cope with climate change as described

in the 1st National Communication to the UNFCCC and the NAPA, focussing on WASH and water-

related activities. Based on this list, it is possible to assert that all the projects categorised as A or B

seem to be adequately targeting the potential climate change impacts identified in Table 2. For

instance, the ‘Project for Rural Water Supply in the Tigray Region’ aims to increase access to a safe

drinking water source and reduce the incidence of water-related diseases, both of which are

encompassed below. Likewise, the project ‘Coping with Drought and Climate Change’ encompasses

some of the activities outlined below for agriculture and water resources.



Table 5 Proposed adaptation options to cope with climate change impacts

Sector Options

Agriculture

Enhancing erosion control.

Proper use of climate information for land use planning and early warning

systems.

Selection of crops and cropping systems that maximise biomass

production and therefore, CO2 and N2 fixation (highlands).

Promotion of irrigation for agricultural development (lowlands).

De-stocking of livestock on a regular basis (lowlands).

Capacity building and institutional strengthening of the local community.

Water resources development.

Water resources

Allocation of water supply through market-based systems.

Conservation of water and use of river basin planning and coordination.

Construction of reservoirs for hydropower, irrigation, water supply, flood

control mechanisms and drought monitoring systems.

Introduction of water quality monitoring systems.

Integrate and implement climate adaptation options in river basin master

plan studies.

Introduction of wise use and management of wetlands to improve

recharging capacity of groundwater.

Introduction of drip irrigation systems.

Introduction of integrated watershed management.

Regulation and prevention of inadequate discharge of domestic and

industrial wastes as well as toxic chemical pollutants that cause hazards

from entering into water bodies.

Human health

Promote integrated vector control approach.

Strengthening research in the health sector.

Encouraging utilisation of climate and meteorological information in the

planning of malaria control.

Establish climate and health awareness, training and research programs.

Source: NMSA (2001); NMA (2007).

4.1.1 Project for Rural Water Supply in Tigray Region (A)

This project aims to provide access to improved drinking water sources to 60,000 people in the

Tigray region, one of the most vulnerable to climate change. The project is funded by Japan’s FSF

through the Japan International Cooperation Agency, and is due to end this year. A total of US $11

million were approved through a grant scheme.

Project characteristics

Funders Japan International Cooperation Agency (JICA)

Focus Adaptation

Financial instrument Grant

Project cost US $10.99 (JICA contribution)

Approval / closing year 2006 / 2015

OECD CRS coding 14020 / 14030 / 14031

Source: CFU (2014) and OECD DAC database.



Context

In 2006, only 33% of the population in the Tigray region had access to clean drinking water – most

of the people relied on unprotected streams and other surface water sources. Women and girls were

the main water carriers, sometimes losing a significant amount of time collecting water for their

households, which also prevented them from going to work or school. The area also experienced a

high incidence of water-related diseases, which could be easily prevented via increased access to

improved water sources.

Project objectives

The project aims to increase safe water access from 420,000 to 480,000 people by 2015 (equivalent

to a 5% increase in access to safe water from 33% in 2006 to 38% by 2015). Through increased

access to improved water source, the project expects to reduce both health hazards and the amount

of time spent by women and girls collecting water.

The grant finances water supply in 10 woredas, including the construction and repair of water supply

facilities and key machinery to repair wells.

4.1.2 Adapting to Climate Change by Improving Water Resources Management (B)


Funders Germany’s International Climate Initiative

Focus Adaptation


Project cost US $2.15 (Germany’s ICI contribution)


OECD CRS coding 41010

Source: CFU (2014) and IKI (2013).

Project objectives

This project aimed to improve the ability of Ethiopian farmers to adapt to climate change by promoting

sustainable water resources management, improving irrigation productivity, and using treated waste

water (IKI, 2013).

4.1.3 Coping with Drought and Climate Change (B)

This project aimed to reduce the vulnerability of small-holder farmers and pastoralists in Kalu

Woreda, a drought-prone area of Ethiopia. This population group was found to be at high risk from

climate variability and change due to its high dependence on rain fed agriculture, low socioeconomic

status and limited adaptive capacity (GEF, n. d.).




Funders Special Climate Change Fund (SCCF)

Focus Adaptation


Project cost US $2.9 million


OECD CRS coding Not found in the CRS.

Source: CFU (2014) and UNDP (2012).

Context

Ethiopia has historically experienced recurrent droughts, which are projected to become more severe

as temperature increases and rainfall declines, especially in northern areas of the country.

The project was piloted in 6 villages in Kalu Woreda, which is a drought-prone and food insecure

region. There were approximately 39,000 people in the woreda at the time the project was approved;

20% of households were female-headed; and the dominant crops grown were sorghum, haricot

bean, chickpea and maize (UNDP, 2012).

Similar projects were also piloted in Mozambique, Kenya and Zimbabwe.

Project objectives

This project aimed to enable rural communities in the region to adapt to water scarcity and drought

by improving their livelihood strategies and resilience, enhancing the use of early warning information

systems, and integrating drought preparedness and mitigation activities across different sectors. The

project was expected to directly benefit around 41,000 people, with indirect benefits through the

replication of best practices to 186,000 people (UNDP, 2012).

In particular, the project aimed to achieve the following targets:

1. Reduce the vulnerability to climate change by 20% for men, women and children in pilot sites;

2. Ensure 25% of households adopt alternative livelihood strategies introduced by the project;

3. Ensure 25% of targeted villages adopt sustainable land management practices introduced

by the project;

4. Disseminate weather and drought information across 90% of pilot sites;

5. Ensure 50% of households use weather forecast information; and

6. Ensure 20% of farmers outside the pilot area replicate or adopt best practices.

Achievements

The project provided access to safe water to almost 4,000 people through the development of 6

water points. The installation of bee hives and bee colonies allowed 300 households to have an

additional source of income, while 1,652 households benefited from the use of improved seeds and

techniques (including small scale irrigation). Overall, improvements in soil and crop productivity and

food security were observed in targeted villages. Farmers also collected rainfall and temperature

data on a recurrent basis to develop risk assessments and disseminate them across nearby

communities (UNDP, 2012).



4.2 Future scope for water projects

Both climate finance policy and architecture are still very much under development in Ethiopia, which

gives some scope for mainstreaming of water projects in the climate change agenda and priority

sectors in the CRGE facility. Although the linkages between climate change and water security have

been outlined in both national and international frameworks, there is generally limited interest from

donors to invest in the sector, unless investments are related to renewable energy development or

agriculture and food security.

Stronger linkages between water and other sectors and more awareness is required to secure

climate finance for water security in the future (G. Wolde and A. Endeshaw, personal communication,

20 January 2015). More broadly, local capacity needs to be further developed to enhance

transparency and accountability and develop suitable monitoring systems (B. Simane, personal

communication, 20 January 2015). Capacity gaps have also been identified with regards to water

resource management and hydrology knowledge due mainly to high staff turnover (B. Mosello,

personal communication, 24 January 2015). Clear guidelines for project selection also need to be

agreed by all stakeholders – although project selection criteria have been proposed in the NAPA5,

these were not mentioned by any interviewee. There is generally some idea of where the main

vulnerabilities are, but there seems to be no consensus as to how these should be prioritised.

There are several projects and proposals currently under development. The Environment and Forest

Research Institute is developing proposals focusing on (W. Merete, personal communication, 21

January 2015):

Advocacy and policy;

Environmental pollution, waste management and technologies;

Carbon sequestration and renewable energy;

Integrated waste management;

Aquatic ecology and wetland management;

Biodiversity and natural resources management;

Soil fertility; and

Land use and land cover change evaluation.

Water is also a priority for the Oromia Rural Land and Environmental Protection Bureau, and they

have many initiatives directed towards water conservation and protection, reforestation and

sustainable livelihoods, and renewable energy (M. Mussa, personal communication, 23 January

2015).

5 Criteria includes: (1) impact on economic growth and poverty reduction; (2) complementarities with national and sectoral plans; (3) climate change hazards; (4) synergies with multilateral environmental agreements; and (5) cost-effectiveness (NMA, 2007, p. 46).



5 Conclusions and policy recommendations

5.1 Conclusions

1. Ethiopia is highly susceptible to climate impacts, with a historic trend of increasing

temperatures. Precipitation patterns, however, are highly variable, and the country has

experienced regular periods of both drought and floods over recent years. While

temperatures are predicted to increase steadily, the picture with regards to rainfall is more

complex, with projections indicating a high level of variability at the national level and even

greater levels at the sub-national level. As such, it is not currently possible to say whether

climate change will result in a wetter or drier climate across large parts of Ethiopia.

2. Water resources are significant, but unevenly distributed within the country. Climate change

impacts are likely to lead to greater frequency of flood and drought events. Sector impacts

are likely to be greatest in the agriculture and energy sectors (due to hydropower). Potential

climate impacts in relation to water access include the drying of shallow water sources, saline

intrusion in coastal areas, and increased water stress due to over-abstraction of groundwater

sources. The impact of climate change on groundwater availability and quality is uncertain,

and much depends on the timing, frequency, and distribution of rainfall.

3. Since 2010, Ethiopia has been developing a Climate Resilient Green Economy (CRGE)

policy which seeks to bring together a range of sector initiatives under a unified framework.

This is accompanied by a financing facility that will provide direct funding to federal and

regional governments, and allow access to non-state actors. The focus of the facility is

primarily on mitigation (renewable energy, forestry), but there is some scope for adaptation

activities (with a particular focus on agriculture). WASH and water security more generally

are not currently priority themes within the CRGE.

4. The CFU identifies more than US $120 million in flows from dedicated climate funds since

2003, although the total sum spent on climate change (in terms of climate relevant ODA and

national budget contributions) is significantly higher. The majority of these funds have been

oriented towards adaptation, with less going to mitigation – contrary to the CRGE Facility

focus described above. Most of the funds have been distributed as grant finance. Only one

project is directly related to WASH, with two more related to drought and water resource

management.

5.2 Recommendations

1. WaterAid should work closely with partners, especially the Ministry of Water, Irrigation and

Energy, the Ministry of Environment and Forests, the Ministry of Finance and Economic

Development, and with NGOs, like Farm Africa, to advocate for climate change vis à vis water

security, and establish a ‘consortium’ for ensuring that WASH and wider water-related issues

are adequately reflected in policy frameworks. The Second Growth and Transformation Plan,

and CRGE process provide entry points for discussion.

2. WaterAid should engage in advocacy activities for climate finance to be mobilised for a

broader range of water security issues. It should work to promote climate and water security

as a broader encompassing area than simply a hydropower or agriculture issue within the

CRGE facility, and seek to ensure that WASH concerns form part of the Sector Investment

Plans under development.



3. In relation to the above, WaterAid may extend its technical support / advisory service to other

stakeholders who may be seeking to access funds for WASH-related activities in terms of

designing or formulating proposals from a climate finance perspective.



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Annex A List of CFU projects and categorisation

ODA OOF CRS Code Climate

tag

OPM

category Project Focus

Y 41010 Y B Adapting to Climate Change by Improving Water Resources Management Adaptation

Y 23066 / 43010

N D Aluto Langano Geothermal Project Mitigation

D Assela Wind Farm Project Mitigation

D Clean Energy SME Capacity Building & Investment Facility Mitigation

Y 41082 Y D Climate Change Mitigation and Primary Forest Conservation A Best-Practice Management Scheme for Wild Coffee Forests in Ethiopia

Mitigation

Y 41010 Y D Climate High-Level Investment Programme Adaptation

B Coping with Drought and Climate Change Adaptation

Y 41010 Y D Enabling pastoral communities to adapt to climate change and restoring rangeland

environments Adaptation

Y 31210 Y C Forest Preservation Programme REDD

D Geothermal Sector Development Project Mitigation

D Geothermal Sector Strategy Mitigation

D Indirect centralized management to AFD and GTZ Adaptation

D Lighting Ethiopia Mitigation

D National Adaptation Programme of Action (NAPA) Adaptation

Y 14020 / 14030 / 14031

Y A Project for Rural Water Supply in Tigray Region Adaptation

Y 74010 N C Promoting Autonomous Adaptation at the community level in Ethiopia Adaptation

Y 23010 Y D Promoting Sustainable Rural Energy Technologies (RETs) for Household and Productive Uses

Mitigation

D Readiness preparation grant - Ethiopia REDD

Y 41010 Y D Strategic Climate Institutions Programme (SCIP) Multiple foci

Y 41010 Y D Strengthening Climate Information and Early Warning Systems in Ethiopia to Support Climate Resilient Development

Adaptation



Annex B List of stakeholders consulted

The following stakeholders were interviewed as part of the country case study.

# Name and position Organisation Date

1 Mr. Gossa Wolde, Design & Quality

Assurance Coordinator WaterAid 20 Jan 2015

2 Mr. Abera Endeshaw , Senior Policy and Influencing Officer

WaterAid 20 Jan 2015

3 Dr Belay Simane, Climate Science Centre Coordinator

Addis Ababa University 20 Jan 2015

4 Dr Berhanu Mengesha , GCCA Ethiopia

Project Coordinator GIZ 20 Jan 2015

5 Mr. Weldemedhin Merete , Researcher Environment and Forest Research Institute 21 Jan 2015

6 Dr Solomon Zewdie, National REDD+ Coordinator

Ministry of Environment and Forest, REDD+ Secretariat

21 Jan 2015

7 Dr Alganesh Tesema , Director of Protected Forests and Degraded Lands

Ministry of Environment and Forest, Protected Forests and Degraded Lands

21 Jan 2015

8

Dr Mulugeta Lemenih, Head of

Forestry Mr Kinfe Terefe, Climate Smart Value Chain Advisor

Mr. Lulu Likassa, REDD+ Coordinator

Farm Africa 21 Jan 2015

9 Mrs. Belaynesh Biru, Environmental and Social Impact Assessment Acting Director

Ministry of Water, Irrigation, and Energy 22 Jan 2015

10 Mr. Robel Takele, Junior Researcher

Dr Girma Mamo, Researcher Ethiopian Agriculture Research Institute 22 Jan 2015

11 Dr Tesfaye Haile, Climate Change Expert

Ministry of Agriculture 22 Jan 2015

12 Daniel Kim Chai Yeo, Water and Energy Advisor

GGGI / Ministry of Water, Irrigation, and Energy

22 Jan 2015

13

Mohammad Ibrahim Mussa, Deputy

Bureau Head and Environmental Protection Core Process Owner

Oromia Rural Land and Environmental Protection Bureau

23 Jan 2015

14 Dr Yigremachew Seyoum, Director of Forest Policy, Strategy and Regulations

Ministry of Environment and Forest 23 Jan 2015

15 William Battye GGGI / Advisor to Ministry of Finance and

Economic Development 24 Jan 2015

16 Beatrice Mosello, Research Officer ODI / Water Policy 24 Jan 2015

Follow-up interviews

17 William Battye GGGI / Advisor to Ministry of Finance and Economic Development

8 June 2015

18 Adugna Nemera, Monitoring and Evaluation Specialist

CRGE Facility, Ministry of Finance and Economic Development

20 June 2015



Annex C Summary of key stakeholder interviews

Stakeholder ID

Water Security

Definition (What do you understand as water security? Is there a specific framework you refer to define water securi ty? (UEA web, ODI, WaterAid etc.) Is there a consensus in your institution / organisation about this definition?)

1

Different definitions for different organisations. Interrelated with different environmental and social issues. Water security framework is to ensure desired quality and quantity for user. Doing a lot of things to meet that. Not specifically a project related to it, when thinking ab out water security thinking of different issues. Different projects; water security policy that each implementer should comply with. Water policy design for rural and urban. 50 l/day rural and 20 for urban. Pilot work on multiple uses of water; waste water should become more productive. Communities should benefit from it. Still pilot. Also equity issue, when building water supply projects, community consultation is important. Also promoting community management to ensure sustainability of water supply projects and prevent over exploitation of resources. WA also known for social inclusion , so services should be accessed by everyone. WA works in small catchment areas so encourage partners to protect sources through protection and small conservation works. Also need to show that projects do not cause environmental damage. WA is known for testing approaches and technologies. Main problem is that WASH is a standalone intervention. Should be linked with natural resources, agriculture, and environment on a wider scale so impact will be higher to ensure water in the future .

The framework used is the WA framework and there is generally consensus, but if the implemented project is donor led it could interrelate with other interests.

4

Water security is difficult to assess. Security means catchments need to be protected, there needs to be smoothening of water flow throughout the year and avoidance of floods. Ecosystem protection is the first necessary step, then construction of dams , etc. to facilitate water availability and water storage. Social and economic aspects are also important for water security.

In the long run, there will be the interrelation of SLM and water security.

5 No definition. Different bodies use different definition.

8

Farm Africa works on natural resource management for livelihood improvement, not per se, in tegrating farmers with markets. Climate smart initiatives are more donor led, directly related to natural resources so benefit the water sector (otherwise no specific definition of water security). Water is also about land management, if not managed, land gets infiltration. Also REDD+, in unique ecosystems. Conservation of ecosystem is fundamental to sustain flow of rivers and streams.

12 Term isn’t used. Different interpretations. How government thinks of water is about social and economic objectives.



14 Forest is also about water, by providing different ecosystem services, including function on regulation of catchment hydrology. Availability of water is highly

dependent on water resources. So close to water security.

15 No one definition.

Evidence (What are the main threats to water security in the country?)

1 Natural resource degradation is very serious. Forests used to be there and now plain. Also , climate change and environmental degradation by itself poses

threats. In Oromia for example the biggest rainy season is in July. Observed changes since 40 years, of vanishing catchment areas and lakes.

12 Water concerns are developing hydropower to grow industrial activity, irrigation for agriculture productivity, and increasing access to water. Overriding

narrative is that Ethiopia doesn’t use much water, so need to ensure it has access. Predominantly it focuses on access to wash.

Initiatives (What are the main policies / research undertaken related to water security?)

5

The Environment and Forest Research Institute was established 2 years ago from the former Environmental Protection Agency and then Ministry of Environment and Forest.

Main work on water security and climate change is now in the proposal stage.

o Advocacy and policy o Environment-related issues o Environmental pollution, waste management and technologies o Climate change carbon sequestration and renewable energy o Environmental health, toxicology, and risk assessment o Integrated waste management o Land use and land cover change evaluation o Aquatic ecology and wetland management o Biodiversity and NR management o Environmental law and policy o Soil fertility management

On water security, the country is constructing dams for hydro and irrigation. Affected by siltation. Watershed management projects ongoing through collaboration with different organisations to ensure water security.



Institutions (What governmental bodies or people have mandate over water security?)

2

Min of Environment and Forest is key. Before it was the Environmental Protection Authority (so it now has upgraded to a Minis try). The Environmental Policy talks also about water security. Water Policy has three components: irrigation, hydropower and water sanitation policy. All relate to water security. MEF oversees all ministries and coordination, making sure that policies have no direct negative effects on the environment. There are also proclamations in regulations on water resource management.

The country is moving towards a climate-friendly thinking of development programmes. Other ministries include Ministry of Water, Energy and Irrigation, Min of Agriculture, Ministry of Health, Ministry of Urban Development and Housing and Construction, although not very active in the WASH sector.

9 There are different departments working on water security. Irrigation, damns for hydro, for water supply, watershed management.

12 There is not a formal allocation policy for water. There is a Water Sector Development Programme that identifies projects and needs based on studies done. It

looks at appropriateness of plans to water. It discusses the institutional set up based on river basin councils that cut across different regions and ministries.

14

This is one of the seven directorates operative in the forest sector. It is responsible for making sure that there is an enab ling environment for forest related issues, for formalising policies and strategies, overseeing regulations, including ones on forest protection. Developing framework to protect from fires and insects to ensure sustained ecosystem functions-controlling floods, siltation etc. Now trying to improve forest laws of the country, amending again for sustainable management of forest resources in the country, also forest inventory for sustainable utilisation of forest by com munities.

Climate change and water

Evidence (What are the main threats to water security from climate change? Over what timescale do you expect these threats to take place? Is there any awareness of the impacts of climate change on water security? Have costs to address these impacts been identified (from other non-climate change related events)?)

1 There is some level of awareness in villages based on observation, and the topic of environment protection is high in the aca demic agenda.

5

Impact of climate change on water security is something they will research. Based on literature no t known. Mainly, the threats are floods, droughts, and variability of rainfall, leading to expansion of epidemic and respiratory diseases. But not based on findings but from observation.

No polluter pay papers around. There is an act to industries to treat waste by conducting oxidation pools and other treatment mechanisms.



8

Additional costs are still being researched by the Centre for Climate Science of Addis Uni.

Vulnerability is assessed looking at all different dimensions, not disaggregating different elements. NR degradation, demography, poor productivity are all considered together.

Mainstreaming of climate change is carried out from planning to evaluation. There are 8 climate smart criteria used. Qualitat ive measurements of activity itself on whether it contributes or not to food security.

9

Additional costs are not calculated, but there are many indicators of what they are. Weather and climate change are evident. It is difficult to get water. Once you could get water 1km, now maybe 10km. This causes reduction in agriculture productivity, as water supply is too far. It exposes families to poverty, creates additional costs. Women cannot participate in social and economic activities due to added costs to fetch water. Without women participation cannot expect development. There is higher school drop out to fetch firewood (look at evaluation of PSNP to see whether the additional effe ct of climate change is considered).

10 Additional costs are difficult to disaggregate. There are some studies on crop options for loss due to climate change, not water security.

12

In Ethiopia context, it is difficult to consider climate change, it is more about climate variability.

There is a climate resilience strategy for agriculture and forest, and also for water and energy.

Some analysis of how climate variability and cc impact on govt. has been done, but it is still not fully processed by the government. Everyone is well aware of rainfall and development objectives, there is some awareness, but not so sophisticated. It is very difficult to split adaptation and other costs.

It is not about additional costs to achieve growth, environment and resilience objectives, but more about moving money and re sources to more efficient and effective uses.

13

Priorities in the Oromia Region are water-related. 95 percent of investors in Oromia, so it is very polluted.

Initiatives are around: water conservation / protection; reforestation (also for sustainable livelihoods); solar; waste to energy; electric taxi to reduce emissions

Initiatives (Are these impacts addressed in current policy, and if so, where? (NAPAs, National Communications, etc.))

1 Not much knowledge but knows that the PM has been negotiating



3 There is CRGE Strategy. Vision clearly articulates resilience and green development but in reality mitigation is more pronounced. Now working on resilience

with agriculture and water resilience.

Climate finance

Definition (Is there a shared definition of climate finance?)

Evidence (How do you consider the general knowledge around climate finance?)

1 Awareness on climate finance is needed. Then WA can decide what to do in terms of capacity and resource mobilisation.

12 No common awareness.

Architecture (Is there a climate finance architecture for this country? Who are the major donors? Who are the main beneficiaries? Are there National Designed Entities for the Green Climate Fund?)

1

According to the Civil Society Regulation (http://ethiopiaobservatory.com/2014/03/10/ethiopias-charities-civil-societies-agency-refuses-to-renew-ethiopian-economic-association-eea-license/)

Implementation cannot be done through partners anymore and will be effective in next six months to 12 years. WA will therefore become direct implementer of projects. This is not seen as a challenge because WA started like that and has been in Ethiopia since 1981. This is a challen ge for the survival of local NGOs. There will be the need to establish offices, but it will need to be strategic.

4

CRGE is the main policy umbrella. All interventions will need to relate to it, and it will be also easier to upscale from pi lot initiatives to other areas.

CRGE facility not yet very used yet. Now some funding flows through CRGE and other through multilateral, but the facility is expecte d to be very important.

5 Climate finance flows to Ministries of water and environment and the Ministry of Finance coordinates the finance flows/cl change projects.

6 REDD+ projects are embedded in the CRGE. It is recognised that the business as usual way of doing agriculture and forestry is not efficient, it is costly and

not in line with the needs of a rising population.

http://ethiopiaobservatory.com/2014/03/10/ethiopias-charities-civil-societies-agency-refuses-to-renew-ethiopian-economic-association-eea-license/

http://ethiopiaobservatory.com/2014/03/10/ethiopias-charities-civil-societies-agency-refuses-to-renew-ethiopian-economic-association-eea-license/



REDD+ receives funding from the FCPF and UNREDD and also approx. 10 million from donors with the WB as trustee. The total is close to 40 million. It is carrying out forest inventory, drivers of deforestation. The RPP (Readiness Preparation Proposal) contains an ind ication of co-benefits, but will not be compensated as there is no market. There are some projects on PES.

The benefit sharing scheme is in draft. Funding will probably be channelled not to individual households, but to cooperatives and unions for community level investment.

Some donors will want to put funds in the CRGE Facility, but is currently through MoFED and some in the Facility. It is still in the learning phase, so they will understand how efficient it is. The idea is to have a small window for REDD+.

7 The focal point for the GCF is MEF.

9

The CRGE Facility is already operative, first phase 18 months with 6 million dollars for 5 projects. Highest share is for sol ar power supply and sanitation. In the future, a large amount of money will arrive to other line ministries. The Facility is considered very positively and it feels Ethiopia-owned. All requestors for funds need to prepare a proposal document, organising capacity building workshops, and technical support.

10

Part of technical experts for CRGE. Delegated more than 7 members to prepare document. The CRGE has clear mission and vision. Now climate finance is focus at ministerial level. 23 million dollars from climate finance already given to Min of Finance and Development and alrea dy allocated to different regions of work.

12

CRGE is main focal point. There is also NAMA and NAPA. They are in the process of being superseded by overall CRGE process th rough national planning process.

Architecture is a bit spread out. The idea is that the CRGE faci lity will be the channel to fund programmatic investments at the national level, aligned with strategic plans. As one of sources. Facility is meant to be the NDA for the GCF. There are still bilate ral funds, badged or not as CF.

The CRGE provides and entry point as climate change, but rather focuses on growth, so there is a lot of work with planning too as it is now being integra ted with the planning process. Look at three things: macro objectives and how do plans contribute? Are plans and activities cl re silient? So they distil science into policy. Third is green economy mitigation piece. Abatement potentials in different sectors, looking at whether they are feasi ble and what the target can be.

The Facility has focused on the public cl finance dimension, but also considering others, such as private sector, and identifying ways to attract it, in addition to other sources of finance.

The challenge is that the Facility is not ready yet. For now it’s Fast Track Investments (FTIs), not going to be a modality g oing forward. Fast track through federal government. 22 projects, about 20 million, other 25 promised. Now asking what happens next.

The idea is that the climate finance should be used by the government to deliver general development objectives, achieve prac tical change at the national level, and help to unblock subnational level challenges.



It is important to get the discussions out of the international level and to the country level and understand how climate fin ance interacts with water security in a specific country, and its relative importance to other sources of finance. A lot of projects are not labelled as climate finance.

Conscious of issues for NGOs, however it is up to government to create enabling environment. They can partner with government. How NGOs like WA can access is still to be determined. The problem is not whether they will be able to access later, but whether the process has been inclusive. NGOs have been involved in the process.

NGOs need to stop thinking about access to finance, and think about how to influence key government issues, this can achieve more water security. WA can leverage its impact in this way, rather than thinking about accessing money. Dichotomy between charity, and advocate for chan ge.

There is no donor coordination body, but an informal climate group. The most formal is the CRGE Advisory Board, a strategic body that has only met a couple of times as the facility is new.

Currently MEF is NDE. Facility will become. Facility will create pot for programmes at national level.

13

For Cl Fin there is the CRGE and Ethiopia is the first country in the world to develop such a strategy. Every development sho uld be aligned to it. Aim of carbon emission reductions but with growth. Environmental impact assessment needs to be submitted by each proponent.

At the Federal level, there are different ministers that are members of the facility. MOFED accounts for finance and is chann elled through MOFED. Then finance is allocated to line ministries. The system very good, transparent and accountable. The implementing agencies are different bureau. Implementing agencies, the regulatory agency, and finance and accountability are all in place.

The bureau prepares proposals through their technical experts and submit to MEF. Now fast track, then they will prepare proposals and Oromia will submit to MEF and get money directly.

Aligned with the Oromia Development plan and with the Environment Plan.

14

For the CRGE, MEF is responsible for implementing it as focal point here. There are 7 fast track pro jects to show how they can manage and handle projects in forest sector and also to address limitations. They are implemented in 7 regions. There is one directorate responsible for ac tivities and resource mobilisation directorate. They are now conducting assessment of progress on the fast track projects, closely monitoring how they are implemented, including field level monitoring. The state minister will chair the evaluation. All allocations are administered by MOFED and there are also transfers to the regions. So resource of CRGE should be housed in MOFED.

For Planning there is a newly established Planning Commission. The Commissioner is very well aware of CRGE and he made sure that activities are well aligned with plans. Before, MOFED was doing everything. The Growth and Transformation Plans will be under planning commission.

Great attention to CRGE as different from other countries as it is mainstreamed in plans. To follow a green path is costly. 1 50 billion USD to implement CRGE. Need support from countries. But it is important to make sure that Ethiopia is ready to utilise funds from countries, so is efficiently mainstreamed. The fast track investments are part of their plans and are also aligned with global interests. Commitment to keep same level of emi ssions by 2020 so need to build trust with partners.



15

The CRGE Facility is the response to fragmentation, ill coordination, and low level of resource efficiency. DFID would not gi ve money to the government directly, maybe to WB, GGGI, etc. to diversify the portfolio and reduce risk. Need to find a way to securely deliver. So CRGE Facility monitors, reports etc. following safeguards and procedures. The idea is to shift some of resources more towards government control, more efficient than GGGI and WB as it has 40/50 times lower costs, and it is owned by MOFED.

There has been a lot of progress (before 1 person now bank account etc.).

The institutional architecture is important. 6 key sectors are overseen.

The Facility is now capitalised. 4 major donors all European. Some funds are targeted to specific sectors or spent in a certain way. DFID focuses on grants, Norway on results based payments (and REDD+ preparation, capacity development, technical assistance).

Ethiopia is a country where 30% of GDO derives from development assistance. Climate finance provides something additional (or should). Ethiopia will care to reduce emissions only if attached to finance or technology. If it is in line with the domestic energy security and food secur ity objectives. It does face risks so needs to adapt.

It should focus more on adaptation and agriculture, while for now it focuses on mitigation (there is a market) There are also gaps on alignment with planning (it should not be a parallel process, but is fundamentally the coun try’s development plan). GTP operates on 5 years. They have a long list of indicators. Uncoordinated mess. The green economy strategy came, and needed to decide how to operate. It becomes operational only if it’s implementable (has resources etc.).

There are 45 million USD secured funding.

On the issue of inclusion of NGOs. Doesn’t mean that NGOs or the private sector can’t implement. The CRGE Facility is there to make sure that things are done according to their rules. It is therefore up to the executing agencies to work with different levels. For example, on MRV the government has allowed the private sector to intervene as it was something outside their capacity. The Facility may move towards windows of operation such as for private sector facility etc. The majority of NGOs that operate in Ethiopia are Ethiopian, but there is a role for NGOs like WA.

Identification (Are climate finance flows distinct from ODA? Are there tools or methods to identify climate finance?)

3

Distinguishing climate change from development is difficult. Global thinking is positive, since 1970s hit by drought. Mostly to adaptation not mitigation but adaptation projects have co-benefits. ODI report on cl financing found that except from military expenditure, all sectors have some climate financing of some sort. Big question mark on whether there will be something new rather than rebranding old things.

As for tools, the source of money and amounts in budget are clear. It is difficult with borderline and cross -cutting issues. No country is really ready to be transparent on climate change. EU is still a little better. Science is emerging now.

4 Additionality of climate change effect on water security- problem is monitoring impact and meteorological trends. Mitigation, adaptation, and livelihood

improvement are all interrelated. Develop resilience is key.



To monitor adaptation impacts it is necessary to consider direct and indirect indicators, while for mitigation there are inte rnational standards (REDD+, CDM)

8 All categorises under climate finance or resilience building. (Depends how it’s tagged at the international level). Many projects are categorised as Horn of

Africa resilience building, rather than climate change and finance.

10 Climate finance is more for mitigation than adaptation.

12

CRGE vs ODA: CRGE responds to development needs, so things that are still in need of happening. Government is interested in climate financ e because it can fund things that it would have done anyway – not much space for additionality. Projects should have a climate change & a development lens, rather than being specific climate change.

14

ODA and CF difficult to separate and additionality nearly impossible. Eligibility is according to seven sectors. As long as contributing to emission reductions and adaptation they are eligible, and also need to respect safeguards.

15

On water, the people in the water ministry are the best to determine the needs and how much can be funded with a specific amo unt, in line with development priorities. The main approach to additionality now is around developing a ‘positive list’.

Monitoring (Are there tools or methods to monitor climate finance? (e.g. databases, coordination meetings) Is there a donor coordinating body, and if so, how effective is it?)

1 There are formal and informal networks- wash movement on local and international NGOs. Meeting every month to share ideas. World Bank has donor

coordination body. JMP reports, annually on wash in country. WA is very active and well known with min of water resources and m in of health.

2 Climate finance by PM office not by different ministries, and MEF. In water sector, monitoring is not well dealt with. Multi -stakeholder forum also. Only urban

wash subsector where schemes are very high tech so climate change has impact on urban dwellers. Ministries are not coordinated and issues of power.

3 There is donor coordinating body on a rotational basis that meets every month. MEF has this information.

4 There is REDD+ monitoring.

8 FarmAfrica works closely with MEF and also Oromia Enterprise. FarmAfrica is interested in assisting government, to show initiatives and influence policy.

There has been good success in forest policy for example. No national platform on sharing info, but for participatory forest management, the government was



encouraged to create PFM working group with annual meetings etc. to translate forest reform. Consortium of different NGOs, more than formal partnerships or nationally approved. CRD- facilitated NGO networks, but not very functional now. For food security there is a joint review meeting.

9

No monitoring system as money comes in the country not directly to ministries. Min agriculture, water, transport, industry, MEF are implementing CRGE. MEF coordinates.

CRGE is seen as climate finance, as opposed to bilateral. CRGE coordinated by MEF. Meeting is quarterly as too busy. To get info need to contact all different ministries, not MEF.

Intended Nationally Determined Contributions (INDC). http://www.mitigationpartnership.net/international-partnership-mitigation-and-mrv-2014-intended-nationally-determined-contributions. Former prime minister was leader in climate change.

12

Facility identifies and monitors but is being developed, not done properly at the moment. Maybe there will also be tagging at budget level. Facility will track incoming funding, allocation, performance and report back to donors. It would appea r in budget as it’s not treasury. It would happen if the government provides matching funds from the GDP, which it is planning to do.

14

Monitoring happens from application. The Facility Manual is followed strictly, in addition to project templates.

There is one directorate that has a registry system that has been recently developed. Also down to the district level. Newly establ ished.

15

The One WASH Fund gives some idea of funds. But very difficult to identify funds.

CRGE has its own monitoring system. If it will be part of GTP it needs specific indicators, etc. and not very efficient as it is made to balance funds.

Challenges (What are the major challenges related to climate finance? (E.g. access, disbursement, implementation, transparency etc.) If transparency is an issue, what do you think is the most successful way to address it, in particular in the context of water security?)

1

Capacity building in rural water supply. Everyone is keen for a new project rather than maintaining old ones. WA is trying to promote water monitoring software as government monitoring tool. Functionality rate from 35% to 25%, but no evidence. 42% of Ethiopia have access to water. Water resource bill to allocate 25% budget of government (Oromia). This is through a MoU with govt. WA is trying to pull government in wash financing.

3

Recommendation- look at ODI document. No clear allocation of funds for this and that, at least when funds arrive there should be good accounting syste m. But then they don’t say how.

Transparency and accountability lacking from donor and beneficiaries. Need clear adaptation and mitigation projects that can be useful for future accounting.

http://www.mitigationpartnership.net/international-partnership-mitigation-and-mrv-2014-intended-nationally-determined-contributions

http://www.mitigationpartnership.net/international-partnership-mitigation-and-mrv-2014-intended-nationally-determined-contributions



4 Climate finance difficult to access due to capacity constraints and MRV requirements/ The CRGE Facility can hel p to improve some issues. Need guidelines.

Small amount disbursed as capacity of recipient is poor and conditionality of donors is too high.

10

The largest challenge is coordination of funds. Nobody knows what part is and is not supported by climate finance and what not. Mechanisms that come in to coordinate should change to increase transparency.

Regarding proposals, they have been properly advertised by MOFED, but limited time to respond was provided. It was time bound from donor side, so it favours who has more capacity, who can write concept notes quickly well.

Recommendations: coordination for CRGE. Country is OK but coordination needed at community and watershed level. Linking high and low level coordination is needed. There should be bridges to create genuine partnerships. Maybe a new institution should be put in place, but in any case a strong platform is needed.

12 Facility is aiming to be transparent, not done yet. The Ethiopian budget is transparent, so hopefully facility will be simila r.

13 Not much capacity to develop proposals. Have different offices in the towns, but capacity is needed. Manpower, training, logistic s because Oromia is biggest

region in the country. Also climate change knowledge is needed.

14 There is not a burden yet on line Ministries and regional bureaus to produce proposals. There is discussion on whether there should be an independent focal

point to follow the CRGE.

15

Fragmentation, lack of coordination is massive. Donor unwillingness because of limited incentives. Wasting resources.

CRGE facility provides air traffic control function to direct resources in the best way.

There is need for change in mind-set in the government, less buying stuff and resources but more attention to initiatives that foster transformational ch ange.

Moving away from filling offices just for the sake of it and getting funds to do it. CRGE people should be the ones stimulati ng proposals.

16

One WASH program well developed.

Ethiopia is on track for MDGs on WASH – but not the same as WRM. On WRM there are a lot of ‘spot’ investments. For example, the country has prioritised the development of agriculture for food security and for export increase, and for economic growth. It has imposed sugar cane production because of good productivity. But not the right area. Needed to invest in large irrigation without understanding what it means for hydrological resources. And the same has happened to hydropower for irrigation and energy generation. It has created population displacement without compensation, changes in water availability without looking at impacts. Lack of coordination between different entities mandated to different line ministries. On financing, donors don't invest in WRM



because not attractive and too complicated. Only for infrastructure but generally controversial so don't invest. Only Chinese and Indian investors generally. Government put money in dams and irrigation.

Institutional fragmentation, lack of data, lack of accountability for data collection and monitoring etc.

On access to climate funds, main limits are institutional fragmentation. Funds managed by MEF and MEF and MoW don’t coordinate.

NGOs need to influence in the right manner and need to look at right topics. WASH has a lot of entry points for climate finance as it’s well discussed and donor-led (look at paper by ODI on Ethiopia and Malawi). WRM is more linked to political and economic interests. CC will create additional tensions but there are many other issues that need to be dealt with beforehand i .e. data collection, accountability, etc. so to build adaptive capacity is complex.

There are high capacity gaps in terms of water resource management. High staff turnover and lack of skills especially with hydrology capacity. But also lack of admin skills.

Climate finance to water security

Data/initiatives (Is there any climate finance allocated to water security projects, and if so, how much money is allocated to them? How are these water security projects identified, and what has made them eligible? Are you confident that climate finance will adequately address these issues?)

1

No single proposal on water security. Tried to link to food security. Irish aid. Water security is donor driven, sustainability is a key issue in Water Aid. All interventions need to have it inside. Community management, level of exploitation should be determined, water quality issues, technical design etc. conflict resolution needs to be done. Financial sustainability- user supports project by labour. Water interventions are funded via donors, WaterAid, government (like Oromia water bureau where they allocate 25% of the budget and there is an MOU on this), planning to sign a MoU with Amhara region as well.

2

4.5 billion USD available for WASH for the next 7 years and this will be coordinated by Ministry of water, there is the One WASH Fund, a multi-donor consolidated WASH account, mostly for irrigation (DFID, AfDB, and WB). Out of these, government needs to contribute with treasury resource. But generally covers staff salaries.

3 WASH came before climate finance existed. This is why it’s difficult to distinguish.

4

GIZ is implementing a Sustainable Land Management programme in Ethiopia https://www.giz.de/en/worldwide/18912.html

It has different components: Sustainable forest management, farmland management, climate smart agriculture and livestock, unpolluted water supply components. Initiatives include rehabilitation of degraded lands, avoidance floods, soil infiltration, encouragement of natural regeneration and replanting.

The project is implemented in 34 woreda/micro-shed areas of 6 regions.

https://www.giz.de/en/worldwide/18912.html



6

The REDD+ Secretariat enables policy, institutions, technical capacity in place for REDD+ readiness. Co -benefits in terms of afforestation and reforestation, biodiversity, and improvement in livelihoods. Bigger picture with improved forest management, in particular high forest source of water, there will be an improvement in water security. Part of ecosystem services following intervention.

Watershed management in Oromia to increase water availability although not specifically stated. Ready by June 2016.

7

Finalising projects with Danish Embassy. 58 priority protected areas in country. Challenges for protected areas is livelihood s. Looking to resolve these problems. In one month consultative workshop. For ecosystem services are pressurised. Also looking for new projects. Government budget to have idea of problems and challenges. But looking for support from donors for projects. 7 sectors with own plan. If under CRGE there is more probability of being funded. Under carbon fund 6 or 7 projects funded.

8

Project called SHARE to sustain low and highland rivers by sustaining springs and resilience of dryland communit ies and also to climate change. Water security only in SHARE project specifically on water issues. Monitoring of hydrological system as indicator of sustainable n atural resources management. If degrade upper catchment, source of springs, then affect low and dryland communities. Different land management p ractises to see how it influences water system. Not using water security as such or ‘access to water anytime’. Climate smart initiative project with chronically food insecure households. Avail water (developing different water sources like ponds, wells), cluster based. Piloting activities for next food security project, developing different water sources. Done climate vulnerability analysis and problem is erratic rainfall.

For REDD+ project it is now according to the voluntary carbon standard methodology and under validation, but interest to integrate it to national level now. World Bank proposes advance money but not there yet.

9

Projects need to be related to either irrigation or energy. Also focal unit for CRGE. Projects implemented: (1) Biofuel coordination development, (2) cook stove efficient (alternative energy technology), (3) substituting diesel generators by solar and wind, (4) sustainable renewable energy programme, (5) capacity building (these are energy plus programmes supported by Norway). Already 1000 pumps substituted.

Also fast track projects. 5 supported by CRGE facility. Solar power for water supply and sanitation, takes the highest share of the CRGF fund allocated for the ministry of water, (2) accelerating national biogas programme. They have a biogas focal point here. 14000 biogas digesters, (3) improving livelihoods and lifestyle of rural communities of emerging regional estates through dissemination of solar technologies; (4) Strengthening monitoring capacity of petroleum downstream, (5) strategic support upgrading climate and hydrological information systems in Ethiopia for climate resilient development and adaptation to climate change. The 1st and 5th are directly water projects.

In CRGE, the majority of funds are focused on water. Need much more money though.

10

CRGE 7 components like agriculture, energy including water, transport, industry, health, one agri cultural crop prod and livestock. Perspective of water security from agricultural perspective. In CRGE looked at how best to tap into water resources to put in development, in particular in high areas to lowland areas. Expanding crop production through irrigation. How to bring in new land for crop prod in low-lying areas so other land, forest, can be less encroached and used for carbon trading. CRGE document has been based on a number of existing projects such as the Rockefeller.



11

MoA is one of the implementers of CRGF in 22 pilot districts. Accordingly there are climate smart interventions/projects incl uding awareness raising on the impact of climate change, watershed management, reducing the number of livestock by improvement poultry/sheet and goat produc tivity and forage improvement, introduction of improved seed variety. None of them are related to water security.

12

Cl fin to water security in CRGE, for fast track: to water and energy etc. and hydrology- nobody is looking at the system, so need to tie together pieces of work for coherence. Others related to watershed management.

Not enough, but climate finance will contribute to addressing. Cl finance mechanisms are too separate from core development processes. Water security needs will be addressed, not necessarily by ones that are specific to climate finance.

13

Submitted lots of projects, around 9 (fast tracking initiative). Got green light only for one for now, bamboo plantation project (2.5 year, 8 million USD). This is fast track funding. Of the other submitted, one is also related to water (developing alternative sources) and other projects are indirectly related to water - water polluted, so project to get alternative water sources. Long term planning is to treat the river.

The committee approves project, the regions will get money and implement projects. In the future, the projects will be in the area of water, afforestation, solar energy, urban waste management and electricity. All the project are align with the regional and country level development programmes.

14

MEF is also responsible for implementing 7 fast tracking initiatives funded by the CRGF. The pilot initiatives are focus on afforestation and capacity building (in the future the initiative will be of various types) and they are being implemented in 7 regions. By doing so, MEF is contribu ting the global interest of reducing emission and follow a green pathway.

National/subnational (At what level of government are funds being spent and to what extent are local priorities considered vis. national or even i nternational priorities?)

1

Decisions on WASH are bottom up and top down. Sometimes communities approach, but as WA works with government, the government knows that communities have limited capacity. When government asks to work in area they have to create a team for scoping. If agreed, communities would be involved in project preparation

9 Channelled to regional states. In the future will propose projects to support emerging regional states. Capacity building and awareness needed.

12 Focus national, subnational etc. relation between facility and regions not done yet. Regions can apply directly. Live questi on as government is very focused on

ensuring equity between regions.

Incentivising private sector involvement (Are there any specific climate finance initiatives to incentivise private sector involvement in water security?)



3

Projects to stimulate private sector are being developed. World Bank has big project to stimulate private sector with innovative mitigation and adaptation. Revolving funds are involved. More on mitigation rather than adaptation. High uncertainty and also difficult to measure impac t, while mitigation is easier through greenhouse gas emission reductions. How to measure vulnerability? WHO has contracted to calculate health vulnerability. No nationally agreed upon criteria.

8

Private sector- piloted by Horn of Africa Centre in collaboration with Addis Uni. Now looking at value chain for sustainable products. In Oromia REDD+, incorporate the private sector. Buying credits , etc.

In climate- smart cluster based activities focusing on private sector. Climate smart commodity cluster is being developed, linking commodity cluster to link with private sector, also energy efficiency projects such as cook stoves and linked with forest related projects. Link with region al research institutions to address gaps with extension, farmers, and food insecure communities.

In general, the private sector in Ethiopia is not very developed, only bits and pieces. Develop links, sometimes constrained by finance, linking with financial institutions to create space for private sector to be engaged.

ICT pilots linking information providers to avail food insecure communities to information flows related to climate change, markets etc.

10 Work on weather based forecast insurance design. Designed small product for pilot area. Funded by Rockefeller foundation. Mic ro financing also coupling with

micro insurance. Risk transfer for adaptation. Facilitating scheme in Tigray region, looking at potential to scale up financi ng scheme for different regions.

Policy recommendations (What is the level of progress on the Green Climate Fund, and what are your views on the attention paid to grants vs loans? What are your key recommendations for the Green Climate Fund? What are your key recommendations for the Financing for Development Conference?)

3

Funding system-different institutes trying to get funding. From institutions to govt. to account how much each is getting is very difficult. Now established the facility. Already there, strategy and criteria for acquisition are set. Finance administered by MOFED but technical delivery is with the MEF. Whoever qualifies for criteria can get funding. Importance is to establish common pot. Strengthen transparency and accountability fro m implementers and donors side. UK, Norway and other donors. Then different actors can compete for feasible projects indicated in the CRGE. Green climate fund has some money, but not happy with the lack of progress.

4

Now all grants, but in future there will be a chance to support local communities for carbon market through carbon sequestration. Some pilots in place. Now have upfront payment through adaptation (compensation) but mitigation try to calculate whether they have contributed or not to emission reduction. The IPCC methodology is not applicable to agriculture.

8 NDA – CRGE Facility is where funds will flow through. If NGOs or any other development sector get any climate funds they need to be registered, but can get

fund directly. However all GCF fund will probably flow through the facility. But if it flows through CRGE the NGOs cannot get it, as it will go through MOFED.



Donors generally disaggregate national or NGO, but once the funds go through the government account it's impossible. If the m inistry approves FarmAfrica proposal then it can be funded.

9

All funds go through MEF, so the ministry will do what is recommended by MEF.

It is obvious that there is need for money. Water and power are huge sectors, blood vessel for country, need capacity buildin g for experts and turnover is an issue. Not only financial incentives, but also moral through learning in other countries, so not only theoretical training is needed.

12

Nobody is looking at the transformational change needed at the national level which is needed to make a difference in advocac y by doing it at the national level and pushing back to the international level. WA can amplify national voices and be pragmatic about what needs to change, therefore push to international level. Mainstreaming with national plans is necessary.

14 Ensure more country ownership and less control on the side of the donors in general and also for water security.

15

WaterAid can be part of advisory board. But possible conflict of interest. Can either be involved in advisory or implementation? Bu t a lot of it relies on relationship with government. If government thinks that WA has the added value to implement rather than advice then it will ask it to do that.

Other option compared to CRGE is to apply financial conditions. Norway would apply conditions. For example, it could fund projects only if it had a gender component etc. So there are different levers of influence.

Water is not really bankable in terms of carbon market. It is more important to have clean water than to increase the amount of water globally in a country. It also all needs to be tied with environmental integrity, not only to access and more water.

CRGE helps to consider different issues, more technology, reduce cost of technology, and get additional funding. Most is reba dged from development money. Needs to show how it can deliver examples to water projects. Mos t things will go ahead with or without finance but it can give some examples.

Is the amount of finance going to make a difference? CRGE needs to say a lot more than climate change; it’s also about vision and transformation, and making an impact with small amounts, and show where the best use of the money is.



Annex D Summary of follow-up interviews

William Battye – GGGI / Advisor to the Ministry of Finance and Economic Development

1. To your knowledge, what proportion of overall climate funds have been disbursed (and what proportion

of this is for water security)? What do you consider are the main blockages to climate funds being

disbursed according to project timelines?

“Depends on definition of climate finance. Funds received are mostly disbursed. Blockages are: quality of

investment pipeline and its relationship with broader development planning and programmatic investments ;

capacity of systems and people to manage and compartmentalise climate funds; conditionality of climate funds

in terms of expenditure and reporting, all of which make long-term programmatic investment more difficult.”

“Once funds are pledged, the investment must be prepared. It is difficult to differentiate from traditional

development programming, and the results are often the same. The figures you mention of 16% for

disbursements, I do not recognise or agree with.”

“Fragmentation and lack of coordination are an issue. Different funds can suffer different issues (prioritisation

form the government being particularly important), which will affect disbursement rates. Pooled funds with high

quality programming that have high priority with government (funding levels and relevant to development/polit ical

priorities) will be implemented. Others may not be as they do not meet those conditions.”

2. What are the critical elements needed to secure sufficient climate finance and use it effectively to address

water security issues in your country?

“Capacity is relatively high in Ethiopia and this is demonstrated. There are some limited funds available to develop

institutions and systems. Programming of these funds is difficult and often ineffective. They also build on perverse

incentives.”

“There are flexible funds that can be used for capacity development or to build system components (DFID, GGGI

and Norway and UNDP provide these).”

3. In the future, how do you plan to capture additional climate funding? What information will you use to

determine the type and location of climate projects to put forward?

“Establishment of a national fund to centralise and harmonise cl imate relevant expenditure in Ethiopia. We use

three high level criteria for programme appraisal: relevance to economic development and climate strategies,

impact and cost benefit of the interventions, and ‘deliverability’ of the investments.”

“Currently, there is no real difference in the selection of development vs. climate projects. The focus areas might

be different. We try not to separate climate and development unless targeting mitigation specific funds with limited

wider benefits.”

“There are different vulnerability assessments that are considered – Green Economy Strategy (2012), Economics

of Climate Adaptation (WB), and climate resilience strategies for agriculture, forests, water, irrigation and energy.

These provide analytics and assessments of priority actions. The GTP also embodies all development plans and

targets at the national level.”





“Sound analytics and understanding of the sector and what priorities there should be; high quality planning around

priority interventions and systems for financial management; social and environmental safeguards systems; M&E

systems to track and extract results .”

Adugna Nemera – Monitoring and Evaluation Specialist, CRGE Facility (MoFED)

These answers only pertain to the CRGE Facility and not overall climate finance in the country.

1. To your knowledge, what proportion of overall climate funds have been disbursed (and what proportion

of this is for water security)? What do you consider are the main blockages to climate funds being

disbursed according to project timelines?

“Regarding the proportion of overall climate finance for water security, the Facility has identified key economic

priority sectors where the Ministry of Water, Energy and Irrigation is one. In this regard, the Facility disburses

funds for energy and not yet for the water dimension.”

“Main blockages include expected climate criteria and availability of experience and skills in this area.”



“At this stage, we have a good absorptive capacity, which is being supported by the institutional arrangement,

national ownership and leadership commitment across the CRGE priority sectors. However, this does not mean

that there is no need to work further to improve existing absorptive capacity. Currently, UNDP is supporting the

government (CRGE Facility) on building capacity in different dimensions, and we are also undertaking a national

capacity gap assessment to develop a comprehensive multi-year Capacity Development Programme particularly

to enhance the national capacity to effectively implement and manage the CRGE initiatives. With the National

Capacity Development Programme, we plan to access various climate finance funds for this purpose and

beyond.”

3. In the future, how do you plan to capture additional climate funding? What information will you use to

determine the type and location of climate projects to put forward?

“The country is planning to capture additional climate finance through a programmatic approach (under

development) that responds to both national development needs and global mitigation efforts. These

programmes are important tools to approach various climate sources, including GCF in the next five years.”

“We are assessing local development needs as well as global climate-related sources to determine the type of

projects/programmes that should be undertaken.”



“Access to climate finance information and capacity/skills to develop quality bids; effective institutional

system/arrangement as well as leadership commitment to transform climate proposals into effective actions, and

reporting results to concerned bodies on time.”

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