AfDB and Ethiopia Partnering for Inclusive Growth

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PuBlisheD By external relations and communication unit african Development Bank Group Temporary relocation agency (Tra) B. P. 323 - 1002 Tunis-Belvedere, Tunisia T. (216) 7110 2876 F. (216) 7110 3779 [email protected] www.afdb.org copyright © 2013 african Development Bank Group ???????? AfDB and Ethiopia???????? Partnering for Inclusive Growth

External Relations and Communication Unit F AND THIOPIA ii A DB E PARTNERING FOR INCLUSIVE GROWTH Obelix at Axum. Message from Dr. Donald Kaberuka President of the African Development Bank Group

seize this opportunity to commend the Government and peo- ple of Ethiopia for the socio-economic progress that has I been achieved over the past decade. Ethiopia’s impressive economic growth, especially for a non-oil producing economy, is a reflection of the committed leadership, its pro-poor stance and transformational policies.

At an annual average rate of 11 percent over the past nine years, Donald Kaberuka Ethiopia is one of the fastest growing economies in the world. It ROWTH has also emerged as the largest in Eastern Africa. This remarka- G ble progress has put the country among the few that are on track NCLUSIVE to achieve many of the targets set for the Millennium Develop- I THIOPIA ment Goal. E

geared to further strengthen our country presence, thereby sus- AND DB F ARTNERING FOR The African Development Bank is proud of the strong partnership taining the recent gains in portfolio management, as well as en- A P that it has forged with the Government of Ethiopia. We have al- hance policy dialogue and aid coordination activities. iii ways attached great importance to our relations, which is marked by frank dialogue, strategic selectivity and a strong focus on re- Beyond this, the Bank Group will continue to position itself to fur- sults. Ethiopia has also distinguished itself as always being at the ther assist RMCs tackle their emerging development financing forefront among our Regional Member Countries (RMCs) in sup- challenges. In this regard, the Bank’s new Ten-Year Strategy porting key Bank initiatives. (2013-22) provides a robust framework to enhance our engage- ment with RMCs to achieve transformation through inclusive eco- We have been active in Ethiopia since 1975 and our cumulative nomic growth and effective transitioning into green economies. commitments have reached UA 2.50 billion (US$ 3.75 billion). For almost four decades, I am pleased to say that the Bank has been We remain highly convinced that Ethiopia’s development pros- instrumental in supporting the Government’s development pro- pects are strong and look forward to sustaining the robust part- grams and regional integration initiatives. Under the Bank’s de- nership in order to realize Ethiopia’s ambition to reach middle centralization strategy, we are already implementing measures income country status by 2025. iv AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH Blue Nile waterfalls. Message from H. E. Sufian Ahmed Minister of Finance and Economic Development Federal Democratic Republic of Ethiopia

welcome, with great pleasure, the African Development Bank’s initiative to devote a special report to its partnership I with Ethiopia. It is my conviction that this publication will en- able the public to appreciate the joint efforts made by the Ethio- pian Government and the African Development Bank to improve the living conditions of the people of Ethiopia. Hon Ato Sufian Ahmed Since several years now, Ethiopia has embarked on a series of reforms to accelerate growth, improve the delivery of basic ser- ROWTH vices, and achieve the targets set in the Millennium Develop- G ment Goals (MDGs). The transformation is not yet complete and ADF XII. These resources have been deployed to support de- NCLUSIVE the Government continues to search for ways of scaling up in- velopment priorities in the country, including rehabilitation and I THIOPIA vestment to ensure that the growth rate remains at double digit development of trunk roads and regional road transport corri- E up to 2015 and beyond, in order to make a huge dent on po- dors; expansion of the electricity supply system; and program- AND DB F ARTNERING FOR verty and move to a sustainable development path. During matic support for decentralized basic services delivery, which A P these periods, the support of development partners has conti- are critical for broad-based, equitable growth and achievement v nued to be crucial. of the MDGs.

Over the years, the African Development Bank has emerged as I would like to take this opportunity to commend the Bank for the Ethiopian Government's partner of choice. The Bank has fi- its responsiveness, which has been made possible by its en- nanced development projects and programs across various sec- hanced presence on the ground. The Ethiopia Country Office tors of the economy, including strategic regional operations that of the AfDB has greatly contributed to the improved portfolio seek to enhance economic integration with our neighbors. The quality by providing support to projects and helped strengthen Bank’s resources have also supported priority projects in infra- policy dialogue with Government and other stakeholders, in ad- structure and enabled the Government of Ethiopia to pursue its dition to improving coordination with the other development decentralization agenda. Through this support, the provision of partners operating in the country. basic services across the country has expanded, particularly in the agriculture, education and health sectors, as well as in the This Country Brochure clearly shows the high level and quality provision of rural roads, water supply and sanitation. of cooperation between the AfDB and Ethiopia. In this regard, I wish to confirm that my country will continue to give all the sup- Ethiopia appreciates the increase in ADF allocation to the coun- port required by the Bank to enable it fully play its role as the try, from UA 284 million under ADF XI to UA 404.7 million under premier development finance institution on the continent.

A Framework for Inclusive Growth and Transformation 5 Thirty-Eight Years of AfDB Presence in Ethiopia 4 Ethiopia’s Quest for Economic and Social Transformation 3 Ethiopia: Economic and Social Highlights 2 1Promoting Regional Public Good 11 Improving Governance and Basic Services Delivery at Local Level 10 Agricultural Sector Support Project (ASSP) Koga Irrigation and Watershed Management Project 9.2 Harnessing Water Resources for Improved Livelihoods and Food Security 9.1 9 Harar Water Supply and Sanitation Project Rural Water Supply and Sanitation Program 8.2 Improving Access to Water and Sanitation 8.1 8 Paving the way for better Life in Rural Areas 7 Mombasa-Nairobi-Addis Ababa Road Corridor (Phase III) – Kenya & Ethiopia Ethiopia-Kenya Electricity Highway Project 6.3 Ethiopia-Djibouti Electric Power Interconnection Project 6.2 Building Infrastructure for Regional Integration 6.1 6 Bank Group Support Pillars Country Strategy Guiding Principles 5.3 Country Strategy Paper 2011-2015 5.2 5.1 An Overview of the African Development Bank Group 1 Photo gallery Annex Statement from AfDB Resident Representative in Ethiopia, Mr. Lamin Barrow Table ofContent 49 23 45 47 27 41 33 31 28 27 21 19 17 14 13 13 37 13 31 17 11 3 7 1

vii AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH viii AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH Onion Farm: transforming into cash economy. Fund (NTF), established in 1976. The Bank Group is funded by funded is Group Bank The 1976. in established (NTF), Fund AnOverview ofthe African Development 1 T velopment Fund (ADF), established in 1972 and the Nigeria Trust De- African the namely, Bank windows concessional two Development and (ADB) African the comprises Group Bank The time. the at d’Ivoire Côte in situation curity Tunisia,to se- and political temporarily the to due headquarters Bank’s the relocate to decided Governors of Board titution’s from in Côte d’Ivoire. In Abidjan, its 2003, the headquarters ins- 1967 in operations began officially It countries. African of gress rmt te cnmc eeomn ad oil pro- social and development economic the promote teral founded finance in development institution 1964 to he African Development he Bank African Development Group (AfDB) is a multila- 63.66 billion (US$ 96 billion). 96 (US$ billion 63.66 Group approved 3,796 operations (loans and grants) totaling UA logy, and vocational training. Between 1967 and 2012, the Bank techno- and science education, higher to support and reforms; governance economic development; sector private integration; areas strategic such and as development regional infrastructure key on focused have operations Group’s Bank the 2006, Since efforts. velopment de- support to assistance technical and advice policy providing as well as investment, for resources allocating and mobilizing by RMCs its supports AfDB The Countries. Member Regional Non- 24 and (RMCs) Countries Member Regional African 53 its AfDB’s Headquarters in Abidjan, Côte d’Ivoire. Bank Group

AFDB AND ETHIOPIA 1 PARTNERING FOR INCLUSIVE GROWTH 2 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH Addis Ababa. collection efforts and improved enforcement. Ethiopia: Economicand SocialHighlights 2 E performance has improved significantly due to tax reforms,spending,accounting FY2011/12. in69%for vigorous Revenue collection in 2010/11 and 1.3% in 2011/12. Pro-poor expenditures dominate deficit,including grants, stood at 1.7% of GDP in 2009/10, 1.6 % 2004/05–2011/12overFY11%the period. Soundfiscal policies exports. Real Gross Domestic Product (GDP) growth rate averaged have led to a fiscal balance within acceptable thresholds. The fiscal commercializationagricultureof expansionandnon-traditional of years,driven primarily byhuge public investment ininfrastructure, consecutive eight for growthrobust enjoyed has economy The one of the top ten fastest growing economies in the world. exportingdecade,oilpasttheandeconomyAfrica in in thiopia’s economy has evolved to become the largest non- rwh ae fo zr got i F21/1 o 4 in 34% to FY2010/11 in growth zero (from rate growth 2011/12) while there was an unusually large increase in in the 14% importto 2010/11 in 30% (from decelerating is growth Export indicators has been on the rise. ofdebt distress in2012 although the vulnerability ofdebt burden from a peak of 40.6% in August 2011. Ethiopia remains at2013, March lowend at risk as 7.7% to dropped rate inflation headline ceased.havegetTheseefforts bearing thebe fruitappearas to of Ethiopia (central bank) direct advances to the Government bud- the implementation of base money nominal anchor. National Bank licy in FY2011/12 has been geared towards lowering inflation with inflation, is the foremost macroeconomic challenge. Monetary po- However, maintaining macroeconomic stability, especially curbing Harar, World Heritage City.

3 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 4 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 77 to 59. Primary59.schoolenrolmentto 77 increasedrates from68.5% 123 (per 1000 live births) to 88 while infant mortality dropped from from 28% during this period. Under-5 mortality rate declined from to 29% in 2010/11 and coverage of antenatal visits reached 34%, and 7). Contraceptive prevalence increased from 15% in 2004/05 MDGs (1, 2, 4, 6 and 8) and likely to meet the other 3 MDGs (3, 5 kingthefastest progress towards theMDGs,track onmeetto 5 Ethiopiaachievedhas significant povertygainsinreduction, ma- ducts and consumer goods accounted for the bulk of imports. the second highest, next to coffee. Capital goods, petroleum pro- while imports reached US$11.1 billion. Gold exports have become billion US$3.2 to increasedexports FY2011/12, In FY2011/12). Energy Infrastructure for Regional Integration. cial sectors foster inclusive growth. focus is to ensure that investments in infrastructure and in the so- for the growing population. With per capita GDP at US$ 513, the lightingfocusexpandingneedthetoon economic opportunities high-2013,DevelopmentHumanfor Index the countriesin 186 Thisprogress notwithstanding, Ethiopia stillis ranked 173outof declined from 26.2% in 2007/08 to 17.5% in 2011/12. unemploymentunemploymentrevealedsurveythehasthatrate and employment Urban 2015. by 22.2% to rates poverty duce 38.7%in 2004/05 to 29.6% in 2010/11. The GTP fromtarget is to significantly,re- declined headcount poverty The 46.8%. to to85.4%. Literacy rates have also risen since 2004, from 37.9% ASSP - Watershed management.

5 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 6 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH Harar old city resident. 3 Ethiopia’s Quest for Economic and Social Transformation ROWTH G NCLUSIVE I THIOPIA E AND DB F ARTNERING FOR A P

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Road construction in progress.

he Government of Ethiopia’s key development objective Ethiopia’s development efforts under the GTP are being pursued is to achieve inclusive, accelerated and sustained eco- through seven strategic pillars: (i) Sustaining rapid and equitable T nomic growth and to eradicate poverty. To this end, the economic growth; (ii) Preserving agriculture as a major source of Growth and Transformation Plan (GTP) – a five-year development economic growth; (iii) Creating favorable conditions for the indus- plan – was launched in late 2010 as the vehicle for sustained trial sector to play a key role in the economy; (iv) Developing in- growth, poverty eradication and to lay the foundations for struc- frastructure; (v) Providing and expanding quality social services; tural transformation. (vi) Building public institutional capacities and promoting good governance; and (vii) Empowering women and the youth and The GTP’s specific objectives include: (i) maintaining at least 11% broadening social inclusion. average annual growth rate; (ii) expanding and ensuring quality of education and health services and achieving the MDGs; (iii) es- The GTP recognizes that Ethiopia is in a critical phase on its tablishing suitable conditions for sustainable nation-building development path and will need to consolidate the results through creation of a stable democratic and developmental state achieved thus far to achieve the Millennium Development Goals and; (iv) ensuring growth sustainability by fostering a stable (MDGs) while focusing on broad-based growth and transfor- macro-economic framework. mation. 8 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH pansion of federal and regional road networks that link all districtsex- the prioritized also has Government GTP, the the Through employment opportunities for the growing urban population. of creation the as well as competition and innovation driving for ticularly small and medium enterprises that are largely responsible The GTP also accords a high priority to the industrial sector, par- formation. trans-socio-economic of goal the achieving to central as tices prac- best agriculturaltechnologiesand diffusionthe modern of sees Government productivity.Ethiopia’s land and frastructure in- social and economic on strain the minimize to as so change climate to adapt and mitigate and resources natural conserve to efforts by complemented be will interventions These ming. far-commercial of promotion and markets; and roads weather scale irrigation; development of rural infrastructure, including all- medium and small of expansion practices; model farmer up smallholder scaling through productivity enhancing on placed economy.the is in Emphasis role key a plays sector Agriculture Food and agriculture. lity. The Government is continuing its efforts to promote good go- education and health services with emphasis on equity and qua- to access expand to is agenda development social GTP’s The km. of new power distribution lines. countries. In addition, the Government plans to construct 82,500 neighbouring its to export to domestic surplus a have meet also and demand will which MW, 10,000 to capacity neration ge-total the raisewillinvestments 2015.These by linesmission trans- power of km. 4,800 rehabilitate and capacity generation new of Megawatts 8,000 install to is target Government’s The being developed and the power sector infrastructure expanded. are resources energy renewable shortfall, energy the Tomeet motive engines and railway signaling systems. loco- supply to opportunities with line, railway Ethiopia-Djibouti the of upgrading and rehabilitation the including network, rail gauge standard long km 1,500 a build to plans also vernment to have increased by 10,000 km throughout the country. The Go- (Woreda)with all-weather roads -theroad network isestimated households that are chronically food-insecure from recurrent food ductive Safety Net Program - aimed at lifting the most vulnerable one of the largest social protection programs in Africa – The Pro- With the support of the donors, the Government has put in place traditional practices. participation in decision-making as well as discouraging harmful preneurial development, provision of credit, and greater women’s werment. The policies to promote gender equality include entre- empo- youth and equality gender to related issues to attention vernance and strengthen institutional capacity while paying more country.the in development infrastructure up scale and accelerate to order in investments,infrastructure for support lending direct to has proposed to support public private partnerships, in addition gnizing the substantial investments required under GTP, the Bank Reco- budget. national the from directly funded be will amount this of 54.8% that estimated is It billion). 77 (US$ trillion 1.26 approximatelyETB is GTP the requiredfor investment total The of social protection. form cash-based largely and predictable secure, more a to aid Water infrastructure for development.

9 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 10 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH Water for life. 4 Thirty-Eight Years of AfDB Presence in Ethiopia

Bank's Cummulative Commitment by Sector ROWTH G NCLUSIVE I THIOPIA E AND

Irrigation infrastructure. DB F ARTNERING FOR A P

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thiopia officially joined the AfDB on 10 September 1964. impacts, in line with the Country Strategy Paper (CSP) principle As at March 2013, the Bank had approved 119 loans of strategic selectivity. The average project size currently stands E and grants for a total commitment of UA 2.50 billion at US$ 79.35 million (UA 52.38 million), which is more than three- (US$ 3.75 billion), with concessional loans and grants accounting fold the Bank’s average of US$ 31.21 million (UA 20.6 million). for 85.3%. Bank Group approvals were distributed across its three windows. The non-concessional ADB window accounted The performance and quality of Bank portfolio in Ethiopia has wit- for 11.2%, the concessional ADF window accounted for 88.6% nessed a steady improvement. Consequently, the portfolio per- and the Nigeria Trust fund (NTF) for the remaining 0.2%. formance rating has improved from 2.15 points in 2008 to 2.6 in 2012 (on a scale of 0 to 3). Following the 2010 portfolio perfor- Over the years, the Bank has developed a diversified and well- mance review, the Bank and the Government adopted a Country performing portfolio in Ethiopia. Cumulatively, operations financed Portfolio Improvement Plan (CPIP), which included a “Readiness by the Bank cover mainly multi-sector operations; which repre- Filter” to screen new operations for quality-at-entry. This has hel- sented 28% of the portfolio; transport (22%); power supply ped to improve the implementation readiness of projects entering (21.6%); agriculture and rural development (15.1%); social sector the portfolio, and is also contributing to reduced implementation (2.8%); water and sanitation (4.7%), industry and mining (3.4%); delays. while the balance (2.5%) was approved for communications and financial sector. With respect to the aid effectiveness agenda, the Bank has made good progress in Ethiopia. Paris Declaration surveys show that Currently, the Bank is shifting the focus of its support to Ethiopia the Bank has increased its use of country systems and does not towards fewer but larger projects that have higher development use parallel project implementation units. 12 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH Linking communities. mainstreaming capacity building in operations, which is important 5 T Country Strategy Paper 2011-2015 5.1 nitor progress supported by evidence-based analytic work; (iii) work; analytic evidence-based by supported progress nitor mo- and track to effectivetools and data baseline with mework fra- resultsrobust a (ii) intervention; of sectors within and pillars CSP also identified the need for (i) strategic selectivity both acrossThe delays. implementation project reduce to need the others, project design and lending instruments to Ethiopia’s changing Ethiopia’s to instruments lending and design project Bank’s the adapting (iv) and performance; implementation for e iiitvs ie a tcln vros eeomn chal- development various tackling at aimed initiatives new support and achievements current the consolidate to country the assisting is Bank the momentum, the Tomaintain jectory. tra- development its in progress significant made has Ethiopia rapid decentralization. of context the in particularly landscape, institutional and policy esn fo peiu eprecs icuig among including experiences, previous from lessons (CSP) for Ethiopia takes into consideration the numerous he Bank Group’s 2011-2015 Country Strategy Paper Strategy Country 2011-2015 Group’s Bank he A Framework for Inclusive Growth - Division of labor among development partners; compara- Bank’s the on based selectivity and focus - Strategic - Alignment with the GTP; pia was guided by the following principles: The preparation of the Bank’s Country Strategy paper for Ethio- Country Strategy Guiding Principles 5.2 basic services, and improving the country’s business climate. quality to access and accountability enhancing (ii) and; roads and energy especially services,infrastructure to access proving im- (i) are: support this for pillars The transformation. economic and growth broad-based for environment enabling an creating Under the current CSP, the Bank Group’s assistance is aimed at tation. implemen- GTP for resources of mobilization including lenges, tive advantage; and Transformation Integrating people.

13 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 14 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH corridors, particularly trunk roads linking areas with high agricul- road major of development the supports Bank Specifically, the vices, especially in the transport and energy sectors. ser-infrastructure of quality improved and access of expansion among and markets others. Cognizant foreign of this, the competitiveness Bank and has committed to support domestic the erodes to access business, constrains doing of cost the raises It Ethiopia. in reduction poverty and growth to constraint major a is infrastructure inadequate that recognizes Bank The Better Access to Infrastructure 5.3.1 Bank Group Support Pillars 5.3 - Lessons from the Bank’s country strategies. - the East African Regional Integration Strategy; and - Greater private sector engagement in ADF countries; - Managing for Results Agenda; and governance infrastructure,regionalintegration,- Prioritizing Ethio-Djibouti power transmission station. private sector development; operations, particularly in the area of infrastructure development country with complementarity greater developing at aims and operations regional for framework strategic a as serves which (2011-2015), Africa East for (RISP) Paper Strategy Integration Regional a implementing is Group Bank the level, regional a At network under the Universal Electricity Access Programme. city transmission system, and expansion of the power distribution tems of Ethiopia and Djibouti, strengthening of Ethiopia’s electri- sys- power of interconnection the financed Bank the example, For expansion. grid and generation power in investments for to harness its vast renewable energy resources through support the country, the Bank has committed to support Ethiopia’s efforts To address the inadequate and unreliable power supply faced by transit management systems. and procedures customs of harmonization including cilitation, fa- trade and transport enhance to services advisory and tance assis- technical with activities lending its complements Group help diversify the country’s access routes to seaports. The Bank transport corridors. The objective is to improve connectivity and regional including trade, promote and markets to potential tural sources are provided through federal block grants, and more and grants, block federal through provided are sources regionalre-of budgetary cent per 80 Almost citizens. the to ser accountability in service delivery by bringing decision-making clo- enhance to seeks which strategy, decentralization vernment’s (districts) to deliver basic services. This is consistent with the Go- Ethiopia’s federal constitution mandates the regions and Woreda Decentralization and Economic Governance 5.3.2 connected, economically prosperous and peaceful region. negotiations. Among other benefits, this will lead to a more well- trade international and multilateral for strategies and positions region; and promoting cooperation in preparing common regional the across persons and services goods, of movement free ting suppor-implementation; and financingprograms,infrastructure and capacity building. The RISP focuses on development of joint also need to be reinforced. mechanisms accountability local and services, basic of quality are still insufficient to finance sub-national entities to improve the resources However,budgetary Program. PBS the to tributable to agriculture extension and health workers’ services is partly at- access and coverage enrolment,immunization net school mary pri- progressinstrong madeThe services. basic deliver toreda Wo-of capacity budgetary the enhanced has this and transfers grant block of increase the to led has Program, (PBS) Services Basic of Protection) (formerly Promotion the through support, services, as well as improve transparency and accountability. This basic decentralized provide to efforts Government’s the ported Since 2006, the Bank and other development partners have sup- water supply and sanitation. the five key sectors of education, health, agriculture, rural roads, than two-thirds of this amount is earmarked for basic services in

15 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH © Addis Tribune

16 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH power transmission line on 5 october 2011. Late Prime Minister Meles Zenawi of Ethiopia and President Ismael Omar Guelleh of Djibouti at the inauguration of Ethio-Djibouti Ethiopia and Djibouti. in towns border (12) twelve of electrification the entailed also I Status AfDB Financing in (US$) Sector (supplementary financing) Approval Date Ethiopia-Djibouti Electric Power 6.1 Building Infrastructure for Regional Integration 6 and Adigala in Ethiopia, and PK-12 and Ali Sabieh in Djibouti. It Djibouti. in Sabieh Ali and PK-12 and Ethiopia, in Adigala and countries; construction of associated Sub-stations at Dire Dawa two the between line transmission high-voltage 230kV km. 283 ject. The major components included the construction of a of construction the included components major The ject. Pro- Interconnection Power Ethiopia-Djibouti the finance to n 2004, the Bank GroupBank 2004,the n approved 89.05millionUS$loan a Completed Infrastructure Interconnection Project 2004 and october 2008 89.05 million development of regional infrastructure projects, which is a key dri- for Africa’s Development (NEPAD), which attached importance to PartnershipNew the ofobjectives the with line in isproject The each other during power shortfalls and periods of high demand. support to systems two the enables also interconnection The in cost savings and the reduction of greenhouse gas emissions. resulting generation, thermal costly on reliance reduce to helps In Djibouti, the importation of low cost hydropower from Ethiopia to support the government’s universal electrification program. generateforeignelectricityordertoexchangefrom exportsofin bordertheproject towns,theincreased has country’stheability the energy constraints in Djibouti. For Ethiopia, besides electrifying Ethiopia and Djibouti. It is also the least cost option for addressing of its kind in Eastern Africa and is of strategic importance to both The Ethiopia-Djibouti Power Interconnection Project was the first Opening up hinterlands.

17 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 18 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH • Twelve (12) border towns were electrified to give access for the to due (EdD), Djibouti de Electricité taker,off the for • Savings • Foreign exchange revenue for Ethiopian Electric Power Corpo- October 2011. Among the project’s key achievements include: energized and power trade between the two countries started in triestheofEastAfrica Power Pool. Theinterconnection linewas systems, and ultimately, increased electricity trade with the coun- is expected to play a key role in establishing interconnected power andmaintenance by personnel of the two countries. The Project operation system electrical of experience the and systems sion abled the two countries to utilize modern technology in transmis- regionalforver integration tradeandcompetitiveness. en-hasIt Power infrastructure for Regional integration. remotely located rural population; and to due impacts environmental displacement of fossil fuel thermal generation. positive and price; dable mers; increase in the population’s access to electricity at affor- thermal generation; more reliable supply of electricity to consu- fuel fossil expensive from day per energy 0.72GWH avoiding –20 million per annum. is nings in foreign currency are estimated in the range of US$ 12 which day, per equivalent energy to 180-300 GWH energy per year. The revenue ear- 0.72GWH approximately ting ration (EEPCo), the power supplier: Currently EEPCo is expor- • Opportunities for Opportunities • the transfer of know-how to sub-contractors from in 49.5% increased 2003 in Djibouti to electricity Access • cation. spent in previously collecting fuel time wood to productivethe activities of such as edu- re-allocation the example, for through, is contributing countries to enhanced two quality the of social services in and livelihoods situation supply power improved The farm project by reducing the project cost. wind the of viability the to contribute will it Ethiopia, of regions remote in energy clean of development the promoting Besides to connect wind power to the grid at substantially reduced cost. farm for power generation. The project will thus make it possible wind MW 120 a develop to plans Ethiopia of Government the The transmission line in Ethiopia passes near Ayesha town where system communication a integrated line transmission The • to 55% in 2010, with a target of 60% access by 2015. by access 60% of target a with 2010, in 55% to operators. operators. sector telecommunications the to capacity surplus the lease to intend EdD and EEPCo Interconnector. the of operation the for required that than higher much capacity a with Wire Ground Optical an of installation the by supported is which Ethiopia. and Djibouti in bute to climate change. have positive impacts on greenhouse gas emissions that contri- will which capacities, generation fuel fossil its displacing also is business and improve the investment climate in country. Djibouti and commercial sector category to help reduce the cost of doing reductionsFurther30%. by band are industrialthe expectedfor ment of Djibouti has reduced the tariff for the lowest consumption and more reliable power supply to Djibouti. Already, the Govern- providinginterconnectorEthiopia–Djibouticheaper,is The clean lenges in both countries.” cooperation to utilize their resources to overcome structural chal- not an option but a must. The two nations are strengthening their king together by giving due attention to regional economic ties is President Ismael Omar Guelleh of Djibouti emphasized that “wor- aspects" he added. countries to further promote their bilateral cooperation in various two the between connections microwave and fiber extend to plannedhave weyears, for had havecountries two the link way utilize its potential in the sector. "In addition to the traditional rail- to energy renewable in investments massive undertaking been has country the that and region, the in countries other of those and Djibouti of needs energy the meet to potential had country his that said Zenawi Meles Ethiopia, of Minister Prime late The and beyond. structure can serve as a model of win-win solutions in the region infra- power regional this building in collaboration their how on bouti, the leaders of the two countries provided vivid testimonies During the inauguration of this project on 5 October 2011 in Dji- energy include the attainment of self-sufficiency through the de- regardto with lines policy Specific development. economic and Miheret Debebe Testimony Miheret Debebe, EEPCo Chief Executive Chief EEPCo Debebe, Miheret Officer, on Ethiopia’s Energy Policy Ethiopia's national energy policy empha- policy energy national Ethiopia's sizes the need for equitable development equitable for need the sizes of the energy sector in parallel with social with parallel in sector energy the of pected key outcomes are: MW. Upon project completion, which is targeted in 2,000 2016, the to ex- up of capacity transfer and power a with (Ethiopia) (Kenya), Suswa Wolayta-Sodo at stations converter sociated erectionas- and countriesof two the between line transmission bipolar DC kV 500 High-Voltage km. 1,045 a of construction include components major The countries. Nile Eastern the in region by developing the enormous potential for electricity trade the withinproject trade powerthe enable objectiveof tomain is The 2012. September in Project Highway Electricity pia-Kenya The Bank’s Board of Directors approved financing for the Ethio- Status AfDB Financing in (US$) Sector Approval Date Ethiopia-Kenya Electricity Highway Project 6.2 provides a good symbol of Regional Cooperation. also it Djibouti, and Ethiopia of countries sisterly two the of ties economic existingstrengthen the it will only Not countries. both for kind its of Interconnectionfirst Ethiopia-DjiboutiPowerthe is well as sound power exchange agreements. as facilities interconnection and generation power their of ment Eastern African Countries in general through integrated develop- of benefits mutual the for countries neighboring with operation The Government of Ethiopia continues to work on expanding co- residential consumptions, education and health sectors. industrial and commercial sectors, rural water supply installations, jective of meeting the growing energy demand of the agricultural, ob- the with Program Access Electricity Universal the launched The Government of the Federal Democratic Republic of Ethiopia techno-economic viability, social and environmental acceptability. their on resourcesbased energy solar and wind coal, gas, tural The policy envisages the development of hydro, geothermal, na- vironmental impact and fair distribution of electricity in all regions. velopment of indigenous resources while ensuring minimum en- On going Infrastructure September 2012 224.88 million

19 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 20 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH • Customized in house and external training will ensure that the ensurethat will training external and house in • Customized deve- the in role important an play will highway electricity • The • In addition, the Ethiopia-Kenya interconnector will implement a • In Ethiopia: the increased power trade with Kenya (400 MW of will grid national the into injected power additional Kenya: • In Infrastructure for regional integration. thern and southern regions and southern of Africa. thern nor- between connection power for link a as serve ultimately major gap on the high voltage grid within the EAPP since it will a close will it as Africa, in exchange power electric of lopment Africa Power Pool (SAPP). thern Sou- and (EAPP) Pool Power Africa Eastern the in countries other to term, medium the in Ethiopia, from exports energy tries and has major economic benefits in the broader sense of coun- both for system transmission HVDC of technology new lion per annum from 2016 onwards. foreign exchange revenue estimated earnings at US$ 555 mil- Agreement and increasing up to 2,000 MW by 2028) will secure PurchasePower the under 2016 in fromEthiopia imports firm GWh by 2022 and avoiding of CO2 emissions. 5,100 increasingto 2018, by energy additional of GWh 3,100 areas). Businesses and industries will also benefit, with around rural the in located be will 18% which (of 2022 by households seholds by 2018, and a cumulative total of 1.4 million additional hou- 870,000 additional an to electricity of supply the enable • The project incorporates installation of Optical-fibre Ground Wire • Replacing thermal generation in a coal power plant with hydro the nomadic communities of northern Kenya. which has further potential benefits such as on-line studying for communications,cheaperresulting in hence line ICT the cess communities traversed by the T-Line, there is a potential to ac- cost to operators and users across the line route. Moreover, for videsopportunityan connectingfor minimum OPGWtheatto along the project influence area. Therefore, the technology pro- schoolspopulationandcenters televisiondigitalto and works net- telephone mobile hubs, telecommunication broadband (OPGW) in all new lines. OPGW will therefore be able to supply (CO2) emissions reduction by applying for carbon credits. carbon the monetize to opportunity creates it more, Further- cents/kWh. US 1.15 to equal is emissions avoided ded ton of CO2 is valued at US$ 10, the monetary value of the generation saves 1,150 tons CO2 per GWh. When every avoi- reliability. sation (SCADA) system will ensure high system availability and Accu- Data Control& Supervisory with flows line tie controlof and monitoring on operators for provided training the more, Further-interconnectedsystem. the in cases fault and rations appropriate decisions and measures, both during normal ope- operators at the respective power utilities are capable of taking of 198 km bituminous standard road from Hawassa to Agare- to Hawassa from road standard bituminous km 198 of rehabilitation comprises Ethiopia in component works civil The Mombasa. of port sea the through Ethiopia to outlet ridor. The project will also avail an economically viable alternative cor- the along to living people the for services access social and markets increasing by countries both in reduction poverty to contribute will project the integration, regional strengthening and trade enhancing to addition In region. both the of and benefit countries the for Ethiopia and Kenya between cations communi- transport improve to is project the of objective The Status AfDB Financing in (US$) Sector Approval Date Mombasa-Nairobi-Addis Ababa Road 6.3 • Boost to ICT Connectivity: Ethiopia’s Growth and Transformation into school curriculum in line with the country’s MDGs. supply local schools with ICT terminals as ICT is being and populationsintegratedlocal the benefit to gearedare that networks milarly, under Vision 2030, Kenya is developing rural-based ICT servicecoverage within aradius of 5km from 49% to 90%. Si- 0.2 million in 2010 to 7.17 million users by 2015; and telephone rural areas. The targets are to increase internet subscribers from and urban includingboth communicationProgrambyAccess Plan intends to expand the on-going all inclusive Universal Tele- Ongoing Infrastructure Corridor (Phase III) – Kenya & Ethiopia November 2011 180 million • Promote regional economic integration by enhancing the de- the enhancing by integration economic regional Promote • outcomes: following the foster will corridor the tion, comple- Upon NEPAD. and (IGAD), Development on Authority Inter-Governmental the (EAC), Community African East the of programs the in priority a is which process, integration gional The road is to to upgrading expected corridor the contribute re- Sololo. of town the to km 8 of road link a includes also It measures. mitigation social and environmental and amenities side road structures, drainage of execution bridges, of construction including dard, stan- bituminous to road km) (122 Turbi-Moyale of upgrading involves component the Kenya, For measures. mitigation cial nage structures, road side amenities and environmental and drai- so- of execution bridges, of construction including mariam, • Reduce transport costs, and significantly improve the offer of offer the improve significantly and costs, transport Reduce • • Improve accessibility Improve • and accessibility mobility to markets and other socio- region (ASAL) Lands Semi-Arid and Arid Kenya’s Integrate • • Spur economic activity between Kenya and Ethiopia and fa- and Ethiopia and Kenya between activity economic Spur • • Improve security along the corridor. the along security Improve • other COMESA countries; COMESA other the and Kenya Ethiopia, between trade of regional velopment and social context; social and economic administrative, the in country, the of rest the with sub-region; the in ties coun- other and Kenya Ethiopia, between services transport gion of Kenya and southern region of Ethiopia; of region southern and Kenya of gion economic infrastructure for the population in re- north-eastern cilitate development of SMEs and trade; and trade; and SMEs of development cilitate

21 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 22 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH Koga: water for agriculture production. the rains, and very difficult to travel even in the best of times. 26,500 km of very dilapidated roads, prone to washout during washout to prone roads, dilapidated very of km 26,500 at stood network road Ethiopia’s 1997, In movements. senger nant mode and accounts for more than 95% of freight and pas- T Status AfDB Financing in (US$) Sector Approval Date Wacha-Maji Road Upgrading Project Paving the way for better Life inRural Areas 7 national development plans. Road transport is the domi- lopment of Ethiopia and this has been recognized in the he transport sector is critical to socio-economic deve- socio-economic to critical is sector transport he Completed Infrastructure May 2003 34.05 million Maji is a 175 km new road reaching areas never before served before never areas reaching road new km 175 a is Maji 2012.Wacha-in completed and 2003 in approved project road Maji Wacha– is roads rural of example good inter-cityA roads. and rural key in sector,investing transport Ethiopia’s in partner ment of the RSDP and is currently the third largest development The Bank has supported the Government since the commence- country’s development. over the RSDP, the road network is still limited and hampers the tremendously expanded has it Although 63,000km. at stands now network The roads. of 37,000km about of construction for – Government the from 75% and donors from 25% - 2012) USD 8.3 billion has been spent over a period of 15 years (1997- about (RSDP) Program Development Sector Road the Under Water for agriculture.

23 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 24 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH • The farm gate price of maize has increased fivefold, while prices • Trucks used to charge ETB 2000 (about US$100) on one jour- in town Maji reached transport bus public a time, first the • For impacts following documented: were the and changed has this all completion, At planet! another in living been have well 300,000 as could its inhabitants and zone Maji journeys. these during died animals) have (and patients of number A season. rainy the during move to unable be would animals the even so that was treacherous terrain of nature mountainous the elders, by told As or mules. horses by foot, either was of transportation form only the road, the of construction Before road. engineered an with Irrigation canal. az ws T 1410g n ti icesd o ETB to sed coffee increased from ETB 5/kg in to ETB 15/kg. increased this and 400/100kg in 2011. Likewise, the farm 114/100kg gate price of unproces- ETB was of maize price gate farm the 2007, In costs. transport and action duce increased in a similar fashion largely due to reduced trans- of coffee rose threefold and those of fruits and other farm pro- costs less than ETB 100. it Now Tum. reach to route round-about rather a using ney route, a big achievement. the plied minibuses 40 including vehicles 100 2013, bruary January 2011, even before the road was completed. On 2 Fe- • Access has brought in federal and regional administration ser- • Increased access has created wealth. Social life has improved at trading scale small increased has markets large to • Access and tremendouslyimproved has inputs agricultural to • Access • Because of the increased accessibility after completion of pro- part of the larger community. feel and served better now are people and area the to vices to the Mizan hospitals. mothers have smooth access (albeit a 5 hour journey) on a bus pregnant and sick because saved been have lives many and centers. lifestyles, and also lessened migration of youths to major urban village level. This has created gainful employment with improved ned to traffic in Bachuma. creased threefold to 370 tons in 2011 after the road was ope- in- this and road) no was there (when 2007 in tons 138 was sold coffeeunprocessed of amount the example, typical a As these farmers, thereby helping increase agricultural productivity. woreda agricultural extension workers are now able to access Furthermore, markets. input fertilizer access now can farmers lities have also started operating. facility.telecommunications a to connected faci- health Public is Maji time first the for and built were towers telephone bile electrificationprojectsimplemented;mo-rural ject, been have • The huge untapped agricultural potential of the area has now • Farm gate price of maize rose from ETB 70 to 250 per quintal. been opened to investors and reports indicate increased large- scale agricultural activities have started to happen. The family has built a new house with corrugated iron sheets roof and added petty trading to their business. They can access health services and even visit nearby towns for business trans- Testimonies actions. Three of their children now go to school. Ato Haile sum- med up the family’s new situation in these words: Ato Adelo Haile and his wife, Kasech Dembo, aged 35 and 30 years, respectively live on a 4-hectare farmland at Backbess ke- “This road is an infinite blessing. It has solved most of our pro- bele with their five children and aged parents to support. They blems. The horses and mules can now have some rest. Pregnant took advantage of a boom in agricultural products following the women no longer die on our roads on their way to maternity cli- completion of Wacha-Maji road to increase cultivation of maize, nics for lack of transport.” sorghum, teff and coffee on the farm. They also raise cattle and use fertilizer. To meet demands and better their lives, they have An older compatriot, Ato Badege Tesfaye from Bachuma recalled ROWTH increased the cultivated area from one to three hectares. the hard times: G NCLUSIVE • Sales jumped from 1-2 quintals to 8-10 quintals per season (1 ” I used to travel Maji on foot carrying cereals on my head and I THIOPIA quintal = 100 kg) also over a distance of 100 km which took 5 days from Ba- E

• Farm gate price of red teff rose from ETB 170 per quintal to chuma. I also used to go to Chena/Wacha which is about 60 km AND DB F ARTNERING FOR ETB 1000 per quintal; and from Bachuma carrying goods on my head.” A P

25 26 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH Women, Key Actors in rural economy. Improving Access to Water and Sanitation 8 T in December 2013 Status AfDB Financing in (US $) Sector Approval Date Rural Water Supply and Sanitation 8.1 equipment. of form the in communities for and institutions level vernment tenance; and (iii) Program support at the federal and regional go- main- and operation management, sanitation and supply water nent for community sensitization, awareness raising, training in training raising, awareness sensitization, community for nent monstration latrines for association; (ii) Capacity building compo- centers, communal latrines in crowded settlement areas and de- facilities; provision of latrine facilities to schools, health schools, to facilities latrine of provision facilities; supply water existing of rehabilitation and new of vision he RWSS Program is comprised of 3 components (i) Pro- Substantially completed and closing Water and Sanitation Program December 2005 65.4 Million • Increased awareness of the importance of hygiene and sanita- activities sanitation and hygiene supply, water integrated • an Federal the of staff unit coordination the for provided • training • capacity building at all levels with active involvement of private the burden of• fetching water in the rural communities is reduced; • an estimated 1.6 million people have access to safe water sup- • 4,203 water supply schemes constructed; livered the following outputs: So far, the Bank supported components of the Program has de- tion services in the targeted communities. (WaSH) strategic plan developed for 125 Woredas; and dug well construction; for operation and maintenance, spring development and hand and holders; stake other and water, health of Bureaus gional MinistryWaterof Energy,and MinistryRe-Health9 ofthe and Community Facilitation Teams and Technical Service Providers; sector through the newly established Woreda Support Groups, ply and sanitation facilities; Fetching water.

27 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 28 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH and sanitation for improved health, poverty alleviation and eco- and alleviation poverty health, improved for sanitation and ply and sanitation services through water production, distribution The objective of the project was to improve access to water sup- drying up of Lake Alemaya. solution to the life-threatening water supply situation following the durable a for quest government’s Ethiopian the to response in Harar.in development intervened Bank the 2002, September In economic of stagnation a and health in deterioration diseases, supply and poor water quality led to an increase in water-related inadequate The Site. Heritage World UNESCO a is and system Harar was the first town in Ethiopia to have a piped water supply Status AfDB Financing in (US$) Sector Approval Date Harar Water Supply and Sanitation Project 8.2 Harnessing water for agriculture.Harnessing Completed Water and Sanitation June 2003 30.46 million and reduction of Unaccounted for Water from 40% to 15%. ling; and improved (90%) revenue collection; regular water supply management; improved customer data base; regular monthly bil- utility for building capacity institutional included outcomes The ged water points provided under the project. closely involved in the management of the 47 community mana- water, hygienic sanitation practices and good health. Women are between linkages the and HIV/AIDS on campaigns awareness University. The design also included a sanitation study and public Haromaya including 250,000, of population beneficiary timated es- an with towns adjacent and Harar of city the to water quate ade- providing operational, fully and completed is project The capacity building for Harar Town Water & Sewerage Authority. and works electro-mechanical of installation and supply work, net- distribution line, transmission production, water included components project The Dengego. and Aweday, Adele maya), nomic growth in Harar, and the nearby towns of Haromaya (Ale- Testimonies projects intended to solve the problem proved too expensive and were rejected. Regular contributions from the communities Teshome Ayele in cash and kind will make the project sustainable. Manager, Ras Hotel Aliya Hali The availability of water has led to an up- a middle-aged woman surge in the number of tourists visiting in the Walled old City Teshome Ayele Manager, Harar. Water has been the most difficult as Hotel challenge to manage in serving our Previously, we managed to get water clients. Trying to get water from boreholes was not very helpful Aliya Hali once in a month. When that happened we a middle-aged because it was very expensive and the water was not always woman went to the market to buy water for 30 suitable. We got water once a week or once every three days, cents for a 20-litre jerry-can, and one birr and had to ration it mostly for our clients to bathe in the mor- to the person who brought the water home. The source of the nings. We could only use water from the wells to clean the water was Alemaya (Lake). Then it dried up and created a lot of ROWTH rooms but our clients complained about it. We always managed problems. Now things are much better. We get water twice a G to serve few desperate guests but the hospitality industry was week with the opportunity to collect more and store for use when NCLUSIVE in a real mess in the city. These problems have been solved the taps do not run. I THIOPIA thanks to our government and the support from development E

partners, especially the African Develop- Asha Ibrahim Leshi AND DB F ARTNERING FOR ment Bank. We are indeed grateful for another Matriarch in the old city A P their support. 29 In the past, there used to be trees and Aisha Ahmad, Chairperson springs. Now there are too many people Aisha Ahmad Asha Ibrahim Water Supply Water Supply Committee, Haseliso Leshi, another and the trees have disappeared. The land Committee Matriarch refuses to give water because it does not This situation is now better thanks to the water supply project. find trees. We are now replanting trees and this will help replenish The Harar water problem started around 20 years ago. Various the water table. 30 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH Water canal. Harnessing Water Resources for Improved 9 A Status AfDB Financing in (US$) Sector Approval Date Koga Irrigation and Watershed 9.1 dowed with immense irrigation potential, estimated at 3.73 million hectares. However, only 186,500 hectares or 4.3% is developed, Completed Agriculture and Rural Development Management Project 90% of export earnings. In addition, the country is en- is country the addition, In earnings. export of 90% counting for 46% of GDP, 85% of total employment and griculture is the backbone of Ethiopia’s economy,ac- Ethiopia’s of backbone the is griculture February 2001 50.85 million Livelihoods and Food Security ua Ognsto (A) Wtr eore Development Resources Water (FAO), Organisation tural Agricul- and Food the from emerged project This Project. ment Manage- Watershed and Irrigation Koga the supported Group Bank the reduction, poverty towards contribute ultimately and production, agriculture improve as well as shortages, food and To assist the country address the challenges of frequent droughts food security. plies the need to increase prime irrigable land in order to enhance im- this growingincreasingmillion,- 85an 2.6% - at population with Coupled famine. and drought of cycles repeated from fers tares under medium and large-scale irrigation. Ethiopia also suf- comprises This 86,500 hectares production. of small-scale irrigation food and about 100,000 total hec- of 3% for accounting Koga Water basin.

31 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 32 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH gation of 7,000 hectares has contributed an additional produc- an additional contributed has hectares of 7,000 gation irri- the for reservoir water m3 million 77 a of construction The from the scheme, which covers a 19.7 km canal. the irrigated area. Many of the households are already benefitting from 2.6 hectares in the upper part of the area to 2.1 hectares in pend on farming for their livelihood. The average farm size varies (wards) with about 12,000 households, the majority of Kebeles whom de- 19 of comprised Woreda, Mecha covers project The area. catchment hectares 22,000 a within sanitation and water conservation, soil forestry,livestock, agriculture, rain-fed prove im- as well as farmland of hectares 7,000 irrigate to resources waterriverKoga the woreda.MechagionalState’s harnesses It Re- Amhara the in Basin Koga the within located is project The highlands in order to increase food production. central country’s the in systems farming sustainable improved Authority and AfDB studies, which identified the need to establish Increased cattle population as T&T suppression progresses. is being reinforced to develop irrigation agronomy. Soil conser-agronomy.irrigationSoil develop to reinforced being is vely promote the use of appropriate technologies. Research work Agricultural extension services are being strengthened to effecti- training. short-termreceivedhave others 33 while levelDegree Master’s to up trained been have members staff 15 activities, building capacity from benefitted have farmers 8,500 over addition, In been reduced by 50%. risen from ETB 2,800 to ETB 5,400. In addition, soil losses have have earnings household average annual the result, a As area. catchment the in implemented been have farming conservation rain-fed effective and efficient watershed, the of Management wheat. of tons metric 5,400 and onions; of tons metric 18,000 tatoes; po- of tons metric 24,000 maize; of tons metric 15,000 of tion irrigation system. I now grow onions, wheat, cabbages, potatoes more crops and make good harvests since we started using this carried on without this irrigation scheme. and potatoes during the dry season farming. Testimonies teamwork at the local, regional and federal levels. on focuses component development capacity The awareness. HIV/AIDS and diseases water-borne with associated sanitation and care health in activities for funds provided also project The of the farmers themselves. conditions health the withaddressed, alongbeing also is vation and tomatoes. Genene: Farmer Female Farmer Kudemi kebele Kassa Muchje Koga Farmer Maya Ayele Getenet Kassa Muchje, Getenet Genene Koga Farmer Farmer Kudemi Kebele I live in the neighborhood of the Kudmi Ke- I now cultivate millet, wheat and potato. and wheat millet, cultivate now I ex- cover and farming the Yes,do bele. I The results are encouraging since this irri- penses for fertilizer and seed. We used to am uig h dy esn W grow We season. dry the during farm gation started. I do not think I would have grow only millet in the past. Now, with the irrigation scheme, we have added wheat added have we scheme, irrigation pendent on the rain butnow Iam able to children.Wewith werede- work mostly I Female Farmer Maya Ayele • 665 micro watershed and 3,060 water ponds have been construc- • Landless youth and women in the surrounding areas have been pro- been have areas management watershed 40 than • More been have Schemes Irrigation Scale Small (69%) 75 of out • 52 • 3,060 water ponds constructed for human and livestock water ma- watershed Community-led through protected ha • 15,152 • Cumulative 77,940 tons of various crops produced; of development including Development, Irrigation Scale • Small To date, the project has delivered the following outputs: Capacity Building and Institutional Development. (v) and Management; Watershed Integrated (iv) Marketing; and velopment (SSI); (ii) Rain Water Harvesting; (iii) Crop Development De- Irrigation Scale Small (i) components: main five has project The management. ecosystem integrated and techniques ting water-harves-irrigation, small-scale promotionthroughof curity The ASSP project seeks to improve rural livelihoods and food se- in June 2013 Status AfDB Financing in (U$) Sector Approval Date Agricultural Sector Support Project (ASSP) 9.2 consumption, and backyard vegetable gardening; and ted under the water harvesting component for human and livestock and selling and improved fuel stove production; production seedling keeping, bee production, ruminant small supported with alternative income generating activities such as measures biological through community mobilization; and physical with treated and tected benefit and hectares 32,000 food insecure households; 10,254 about irrigate can The 2013. schemes June in up winds project the before completed be to expected are schemes remaining the and completed consumption, and for backyard vegetable garden production; nagement; per annum; 5,000 ETB of income incremental estimated an with directly; 7,509 hectares on 59 sites benefiting over 28,000 households Substantially completed and closing Agriculture and Rural Development November 2003 31.84 million

33 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 34 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH located in Harar region. scheme SSI in farmers, the of insight innovative the to testifies Finally, artisanal bee-keeping in dug-out tree trunks hung on trees farms gives a sense the of ownership into and determination flow to succeed. water channeling and canals building in farmers women and men of groups of involvement The behold. to sight a was farmlands irrigated on khat including vegetables green and papaya banana, as such crops healthy of presence The Testimony • 6,000 government staff and 64,000 farmers have been trained Fetching water in Harar. and capacity of public institutions strengthened. that we had cut trees that protected the lake. But the water the But lake. the protected that trees cut had we that fact the to due mainly was drought the that told been We have Bank. Development African the and government Ethiopian the from support the to thanks supply, Female Farmer Fikya Ibrahim Fikya Ibrahim Female Farmer I am a farmer in this irrigation area. area. irrigation this in farmer a am I We are privileged to get access to water to access get to privileged We are the future. future. the in pepper grow to plan a have I cereals. of variety a and maize millet, from income generate also I khat. ETB growing from to 10,000 close earn to started have I irrigation, this with Now, life. new a of beginning the is it us, of some For farming. our increase to hoping are we and remarkably, increased now has volume make our lives better. our in eat we even will construction road what the that hoping grow are We backyards. can We lot! a changed have We irrigation system gave me a good opportunity. family.Actually,my the by owned farmland the using by farmer in farming and becoming successful, and then I decided to be a I was a trader. Then, I started to observe some women engaged

35 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 36 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH Growing wheat. 0Improving Governance and Basic Services Delivery 10 T Status AfDB Financing in (US$) Sector Approval Date Promoting Basic Services (PBS) Programme III recurrent costs in 5 key sectors through block grants and Wo- and grants block through sectors key 5 in costs recurrent ded extensive support for the regions and woredas to meet their locallevel. Through PBS,theDevelopment Partners have provi- reda-focused capacity building. The block grants have enabled have grants block The building. capacity reda-focused Ongoing support good governance and basic services delivery at to 2007 in started Program supported multi-donor a is Multisector he Promoting (formerly Protecting) Basic Services (PBS) July 2012 250.49 million education, health, agriculture, rural water supply and sanitation, and supply agriculture,water health, ruraleducation, in deliverydecentralizedbasic improving of and qualitycess the ac- expanding by living of standard population’s the improving reductionpoverty toand contribute Programto The is objective sion-making regarding basic services provision. deci- in engagement citizen enhancedpromoted has It ground. the on results development achieve and management, financial accountability,public and transparency strengthen helped also has Program The officers. sector road and staff, sanitation and school teachers, health and agriculture extension workers, water PBS has supported Woredas to meet recurrent costs for primary contribute to the achievement of many MDG targets. and provision service basic decentralized in improvements the Providing basic services to communities. at Local Level

37 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 38 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH comes: The PBS Program is expected to contribute to the following out- Strengthened local accountability and Transparency systems:(ii) improving and access expanding on focuses Grants: Block (i) with two main components: PBS III, like its predecessors, is a multi-donor supported program accountability and transparency in basic services delivery. local enhance to seeks also Program PBS The roads. rural and Providing people’s basic needs. Fund. level; (c) managing for results; and (d) Results Enhancement sub-national the at engagement Citizens’ (b) (PFM); ment throughsub-components:FinancialPublicfour(a)Manage- level decentralized the at accountability social and systems accountability and transparency financial improved support roads by contributing to block grants and; rural and sanitation and supply water education, agriculture, in health, services basic decentralized of quality the (x) citizens who report that woreda officials have sought the sought have officials woreda that report who citizens (x) citizens informed about woreda budget increased from 19% (ix) procurement performance and compliance audits rolled out (viii) increased external audit coverage at woreda level from 24% (vii) budget and financial reports generated using (vi) IBEX increased to 71.3% from increased supply water potable to access (v) 4.5 from reduced roads all-weather reach to time average (iv) hec- per quintal 15 from increasedproductivity agricultural (iii) mortality ratio down maternal from 470 to 367; (ii) primary school completion rate increase from 49.4% in 2011 (i) by 300; creased to 50% from 48%. in- services basic of quality improving on people of views to 23%, and; in 50% of woredas; to 40%; 92%; hours to 1.6 hours; tare to 20; to 64% by 2015; Going to collect water.

39 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 40 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH Suppressing Tsetse flies and Trypanosomiasis disease. 11 A Status AfDB Financing in (U$) Approval Date and West Africa and Trypanosomiasis Free Areas in East Creation of Sustainable Tsetse mously adopted. Within the mouslyframework adopted.of this Within decision, the Afri- unani- was (PATTEC) Campaign Eradication Trypanosomiasis States to act collectively to embark on a Pan African Tsetse and On going tt ad oenet ed n oé Tg, n July in 2000, Decision AHG/Dec. 156 (XXXVI), urging Togo,Member Lomé, in held Government and State te 6h riay umt f h Arcn ed of Heads African the of Summit Ordinary 36th the t December 2004 85.39 million Promoting Regional Public Good Areas in East and West Africa”. Free Trypanosomiasis Tsetseand Sustainable of “Creation the tries and the PATTEC coordination office under the first phase of coun- affected 6 to support financial providing by initiative TEC the Bank agreed to participate in the implementation of the PAT- Commission, Union African the and countries affected selected Following an agreement between the African Development Bank, is sustained. pedite the eradication of tsetse and trypanosomiasis from Africa support and generally ensuring that the actions necessary to ex- generating commitment, mobilizing awareness, creating ding inclu- decision, this of implementation for coordinatingactivities and guiding of task the assigned was Commission Union can Increased cattle population as T & T suppression progresses.

41 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 42 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH tion of the project. implementa- the monitored and supervised OfficeCoordination AU-PATTECThe Management. and Coordination(iv) and ment; Eradication; (ii) Capacity Building; (iii) Sustainable Land Manage- Tsetse& (i) Suppression components: interrelated following the from benefitted have Ethiopia, including countries, affected The US$ 14.32 million and a grant of US$ 2.525 million. cation of tsetse and trypanosomiasis. Ethiopia received a loan of eradi- training, in involved institutions and farmers are countries projectthe in tock area.project the beneficiariesof theseThe in and thereby enable an increase in production of crops and lives- T&T from areas infested free to aimed project multinational The problem of Tsetse and Trypanosomiasis (T&T). the address to mandated Departments and/or Ministries ment Govern- are countries these in agencies executing The Kenya. and Uganda Ethiopia, Ghana, Mali, Faso, Burkina namely tries, coun- six the to 4.41million) (US$ Grant ADF and million) 66.80 The Bank provided US$ 85.39 million through an ADF loan (US$ Eliminating Tsetse flies through ground spraying. few years ago. years few impossible was animals of presence the where area, an in port trans- and power draught for used are animal healthy and etc. tsetse freed areas are sustainably used for agriculture, livestock, rate from reduced 5.00 to The 0.98. prevalence/infection sease di- the while 0.60 of low to 20 from declined day per trap per density Tsetsefly with impacts significant by yielded have project supported activities suppression intensive the approach, wide area integrated an of application the Through liberated. been has Ethiopia of Valley Rift Southern in area affected T&T important an instance, For many. are Ethiopia in Project tional Multina- the of implementation the from obtained benefits The and/or multinational levels. bilateral at T&T on working institutions and countries affected and donors/lending institutions/the private sector are supporting gional Organizations; research and institutions of higher learning re- and international including stakeholders other and Partners affectedcountries. 15 by invested been has Bank, the by vided To date, about US$ 158 million, including the loan and grant pro- leased in the wild where tsetse flies have been suppressed to suppressed been have flies tsetse where wild the in leased Addis of suburbs Ababa, where tsetse flies will the be reared and the males sterile re- in Kality in facility rearing mass tsetse Under this project, Ethiopia has built the first and most important staff, community leaders, and farmers and agro-pastoralists. government of capacitystrengthenthe to used also loan the of laboratoryequipment,ofconsumables.range furnitureand Part pacity of the Insectary also strengthened through provision of wide have been trained to participate effectively in the project. The ca- createmore T&Tfree areas increasing.is localThecommunities communitiesincometheTheof increased has desiretheand to TechniqueTechnique Insect (SAT) sterile (SIT). and poor-on, ground spraying and aerial spraying (Sequential Aerosol techniques all used to of suppress Tsetseuse the including; as traps and well targets, as project the of benefits the showcase to Office AU-PATTEC Coordination by used been has Ethiopia flies. tsetse dreaded the of diet main the is which blood; the also and flies male sterile to use for irradiator The areas. some in Bank’s loan to flies Ethiopia has been used to purchase an industrial the of eradication the to goal term long the in contribute to female wild the of sterilization quently subse- and mating for compete to them for level acceptable an

43 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 44 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH Marching on the farm. Statement from AfDB Resident Representative in Ethiopia Mr. Lamin Barrow

n behalf of the Ethiopia Country Office (ETFO) of the African Development Bank, I am pleased to welcome O you to enjoy this publication, which is prepared jointly with the Bank’s External Relations and Communication Unit (ERCU) to showcase the partnership between the Bank and Ethiopia. We hope that the projects and programs highlighted, and testimonies provided by the beneficiaries, demonstrate the tangible impact that these operations are having on the lives of Lamin Barrow people in Ethiopia, and in some instances, the neighboring coun- ROWTH tries. G NCLUSIVE In recent years, we have witnessed new operations showing en- I THIOPIA hanced readiness for implementation by the time of Board ap- E proval. This is helping to speed up implementation progress and dialogue with the Government and other stakeholders that is in- AND DB F ARTNERING FOR timely delivery of the expected outputs and development benefits creasingly informed by knowledge products. It is also reflected A P from these operations. in improved portfolio performance and quality, with the resultant 45 development benefits accruing from the operations supported. The Bank’s interventions are bringing development results to the country. For instance, the Promoting Basic Services Program is Over the years, ETFO has also played a greater role in aid coor- contributing to the Government’s efforts to enhance transpa- dination activities, in line with commitments that the Bank and rency and accountability in delivery of basic services at decen- other partners have made under the Paris Declaration. In its cur- tralized government levels. The projects are also assisting to rent role as co-chair of the Development Assistance Group (DAG) expand access to infrastructure services in the water, roads and Heads of Agency, active participation in Sector and Technical energy sectors as well as building the resilience of communities Working Groups, as well as other donor coordination platforms, to drought and climate change. Moreover, the Bank supported the Bank is strengthening its partnerships with other donors to operations in the infrastructure sector are helping to reduce the enhance harmonization, managing for results, and development cost of doing business, which contributes towards Ethiopia’s en- effectiveness of our individual and joint interventions. hanced competitiveness, as well as economic integration with the neighboring countries, through the strategic and transforma- Clearly, ETFO’s continued effectiveness will be crucial for sustai- tive multinational energy and road corridor projects. ning the development impact of Bank Group operations in Ethio- pia. With the impetus provided by the increased staffing Since it became operational among the first batch of country of- resources and greater delegation of authority under the Enhan- fices re-established by the Bank in 2001, ETFO has strived to ced Decentralization Strategy, we are confident that these will play a catalytic role in strengthening the Bank’s development co- provide the necessary tools and flexibility to enhance the Bank’s operation with Ethiopia. This is reflected in the quality of policy responsiveness to meet the evolving needs of our clients. 46 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH Cumulative Disbursements asat 30 April 2013 Ethiopia - AfDB On-Going Operations 2 >> 1 AGRICULTURE SECTOR No. Ser. 2 1 No. Ser. 11 10 9 8 MULT_SECTOR 7 6 5 PUBLIC UTILITY 4 3 TRANSPORT SECTOR PRIVATE SECTOR (2008-2013) TOTAL Multi National Multi-National Operations Total Ethiopian Air Lines Derba-MIDROC-Cement Factory Project/Study TOTAL GRANT LOAN GRAND TOTAL (National and Multinational) :- Sub total multinational GRANT LOAN wassa-Ageremariam Road Project ( Phase III) Mombassa-Nairobi- Addis Road Corridor-Ha- Ethiopia-Kenya Electric Highway Project mariam -Yabelo Road Project (Phase II) Mombassa-Nairobi-Addis Road Corridor -Agere- COMPONENT sis-Free Areas in East and West Africa: - ETHIOPIA Creation of Sustainable Tse tse and Trypanosomia- COMPONENT sis-Free Areas in East and West Africa: PATTEC-AU Creation of Sustainable Tse tse and Trypanosomia- TOTAL GRANT LOAN Total Country Allocations:- Sub total loan Multi sector PBS III Sub-total Public Utility GRANT LOAN Rural Water Supply and Sanitation Project ject Electricity Transmission Systems Improvement Pro- Electric Transmission Systems Improvement Project Rural Electrification II Project Sub-total Transport GRANT LOAN Bedele-Metu Road Upgrading Jimma-Mizan Road Project Sub-total Agriculture GRANT LOAN sis-free areas in Ethiopia Creation of Sustainable Tse tse and Trypanosomia- Agriculture Sector Support Project Project/Study " " 21000150027844 Loan/Grant No. 2000120001620 2000120001619 2100150025545 2100150020743 2100155003921 2100155003922 2100150027194 2100155006269 2100155019269 2100150023451 2100150013644 2100150025495 2100150013218 2100150009198 2100155002019 2100150007227 Loan/Grant No. GRANT GRANT GRANT GRANT GRANT Source Source LOAN LOAN LOAN LOAN LOAN LOAN LOAN LOAN LOAN LOAN LOAN LOAN 23-mars-11 27-août-12 06-déc-10 20-déc-06 13-déc-06 08-déc-04 08-déc-04 08-déc-04 21-déc-05 06-déc-10 30-nov-11 05-nov-03 05-nov-03 30-nov-11 16-avr-08 Approval 01-juil-09 18-juil-12 Approval Date Date Date Signed Date Signed 16-mars-05 24-août-12 12-janv-07 12-janv-07 15-janv-10 20-déc-10 05-déc-12 20-déc-10 16-mai-05 16-mai-05 02-févr-12 12-févr-04 12-févr-04 02-févr-12 25-févr-06 26-juin-08 21-mars-05 21-mars-05 19-août-11 19-août-11 01-sept-06 23-janv-07 23-janv-07 18-déc-12 02-nov-08 23-juin-08 03-oct-07 14-oct-05 01-avr-12 01-avr-12 06-avr-11 Effective Effective not yet Date Date Initial Closing 31-déc-15 31-déc-13 31-déc-16 31-déc-14 15-déc-13 31-déc-11 31-déc-17 31-déc-15 31-déc-13 31-déc-13 31-déc-15 30-juin-13 30-juin-12 31-oct-17 31-juil-15 30-Jn-13 Closing Date Date 106 060 000 106 060 000 944 911 200 121 111 200 823 800 000 341 740 000 340 000 000 105 000 000 150 000 000 603 171 200 119 371 200 483 800 000 166 000 000 166 000 000 171 793 495 101 610 000 180 950 000 Loan/Grant 93 750 000 87 200 000 41 060 000 65 000 000 48 551 200 17 761 200 30 790 000 17 761 200 21 240 000 40 000 000 55 000 000 85 000 000 43 610 000 58 000 000 9 550 000 1 740 000 1 500 000 Amount 240 000 USD Net - Cumulative Dis- 16 683 918,25 7 063 889,15 bursemenets Amount (30 350 316 626 274 178 736 312 095 316 237 479 771 171 793 495 108 898 160 Cum. Disb. 49 374 865 59 523 294 48 750 112 48 750 112 41 686 223 35 551 709 11 720 210 23 831 499 11 720 210 15 235 633 38 670 764 55 000 000 76 137 890 38 221 311 36 698 966 20 015 047 74 615 545 56 000 000 56 000 000 62 895 335 37 288 618 25 606 717 April 2013 8 595 866 1 522 345 1 371 028 151 317 - - Cumulative Disb. Ratio Cumulative Disb. Ratio Annex 37,07% 62,87% 33,28% 88,82% 87,49% 10,79% 15,89% 23,55% 63,05% 91,40% 42,46% 62,51% 49,09% 33,73% 33,73% 60,80% 61,90% 60,18% 85,50% 44,15% 52,67% 68,26% 45,96% 45,96% 17,20% 64,13% 73,23% 65,99% 77,40% 90,01% 65,99% 71,73% 0,00% 0,00% 100% 97% Undisbursed balance (UA) Undisbursed balance (UA) 594 594 574 549 621 264 303 518 690 303 301 034 150 000 000 291 075 884 246 320 229 110 000 000 110 000 000 110 766 505 44 973 310 88 316 082 64 984 953 44 755 655 38 714 665 72 051 840 32 393 283 44 375 135 27 676 706 57 309 888 57 309 888 33 996 111 23 313 777 12 999 491 1 329 236 6 321 382 6 040 990 6 958 501 6 040 990 6 004 367 217 655 128 972 954 134 88 683 - -

47 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 48 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH ED Muduuli and Senior Adviser Mulu Ketsela site visit to a bank funded road project. TT suppression activities. A Koga Dam beneficiary. inauguration of Ethio-Djibouti power transmission line. and President Ismael Omar Guelleh of Djibouti at the Late Prime Minister Meles Zenawi of Ethiopia ETFO Saff Retreat in 2013. TT suppression activities. Photo gallery

49 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH 50 AFDB AND ETHIOPIA PARTNERING FOR INCLUSIVE GROWTH GTP Annual Progress Review Meeting 2013 Relief food supplies to victims of drought with Minister of Finance and team. ETFO Offices in Addis Ababa. in Somali region of Ethiopia. Bushera Mohamed Dire Dawa power sub-station official. Harar Water Supply and Sanitation Project. Ahmed Mohamed Project Coordinator Water and Sanitation - Tesimony. Contact: Avenue du Ghana Angle des Rues Pierre de Coubertin et Hedi Nouira BP 323 Tunis-Belvedere 1002 Tunisia Tel.: (216) 71 10 29 16 Fax: (216) 71 83 44 79 Email: [email protected] Internet: www.afdb.org © AfDB 2013 - DESIGN ERCU/YAL ERCU/YAL DESIGN - 2013 © AfDB