Dec 04, 2024
Washington, DC - Today the governing board of the Climate Investment Funds (CIF) gave the green light to a $37 million investment plan to protect rural communities in Ethiopia from climate-related shocks such as floods and droughts and the food insecurity these can generate, while also restoring and safeguarding the country’s carbon-rich forests and natural ecosystems. Ethiopia expects the plan to mobilize $492 million in co-financing, with $253 million from the African Development Bank and the World Bank Group.
The investment plan addresses climate change and land degradation, which undermine the livelihoods of millions of smallholder farmers and pastoralists in Ethiopia. CIF funding will focus on forests, including famed wild Arabica coffee forests, farmlands, and rangelands in four regions – Amhara, Oromia, South Ethiopia, and Somali. With CIF resources, about 322,276 hectares of degraded landscapes and ecosystems will be restored and an online national forest registry will be created. In partnership with local communities, investments will focus on degraded lands recovery through accelerated afforestation and reforestation, assisted natural regeneration practices for soil and water conservation, and more sustainable means of harvesting and farming. The plan also aims to reduce pressure on forests - today a major source of fuel and timber - through new income opportunities, including carbon credits that reward communities for forest conservation and support farmers of non-timber forest products such as gum, resin, honey, bamboo, fruits, spices, and coffee.
Women farmers, who play a crucial role in Ethiopia’s food production, will benefit from a dedicated strand of the investment plan and enabled to claim a stronger voice in local decision-making bodies, switch to higher-value activities such as honey production and ecotourism, adopt climate-smart farming techniques, and establish women-led agricultural cooperatives.
CIF’s Dedicated Grant Mechanism will additionally channel a total of $4 million in funding directly to Ethiopia’s vulnerable local communities in the four target regions, enabling them to support and scale community-led actions to diversify livelihoods and safeguard biodiversity.
One of the largest and most densely populated countries on the African continent, Ethiopia depends heavily on its land to sustain its economy. Over 70% of Ethiopians live in rural areas, where agricultural products are the dominant source of income. Approximately 45% of Ethiopia’s coffee – the country’s main export commodity - comes from natural forests, which also store an estimated 10.1 billion tCO2eq. This valuable forest cover is being rapidly depleted: more than half of the country’s landmass is experiencing some level of degradation and an estimated 11 million hectares are in danger of desertification. Additionally, weather shocks are threatening the livelihoods, livestock and crops of millions of farmers and pastoralists.
Ethiopia’s investment plan will be funded under CIF's $370 million Nature, People, and Climate investment program (NPC), supporting the development of nature-based solutions in low- and middle-income countries. NPC funds initiatives that recognize the interdependence of land use, climate-change mitigation and adaptation, and the improvement of livelihoods for rural communities and Indigenous Peoples.
Tariye Gbadegesin - CEO, Climate Investment Funds
"Nature-based solutions offer a double win, both for the climate and for communities who depend on agriculture and forestry. By investing in sustainable livelihoods and farming practices, Ethiopia can not only reduce harmful emissions and protect natural carbon sinks, but also boost economic opportunities and bolster rural communities against climate-related shocks.”
H.E. Dr Girma Amente - Minister of Agriculture, Ethiopia
“I express my sincere gratitude to the Climate Investment Funds and involved countries for approving Ethiopia’s Nature People and Climate Investment program. This endorsement underscores the recognition of Ethiopia's vulnerability to climate change and its unwavering commitment to build resilience through implementing innovative and transformative Nature-based Solutions. Our Nature, People, and Climate investment plan demonstrates inclusive engagement of local communities, government administrations, Multilateral Development Banks, the private sector, and other partners to drive transformative change. The investment plan aims to achieve biodiversity conservation, sustainable forest management, ecosystem restoration, enhanced agricultural productivity, livelihoods and food security. Your support will establish a foundation for scaling up best Nature-based Solutions practices to build community and ecosystem resilience and adaptive capacity in Ethiopia, while significantly contributing to climate change adaptation and mitigation.”
Anthony Nyong - Director of Climate Change and Green Growth, African Development Bank
“The African Development Bank welcomes the endorsement of Ethiopia’s Nature, People, and Climate investment plan, recognizing the pressing challenges the country faces as climate change worsens food insecurity, disrupts livelihoods, and depletes ecosystem services. Through this plan, the Bank reaffirms its commitment to supporting Ethiopia by strengthening partnerships with relevant actors to enhance sustainable landscape management, promoting the adoption of climate-smart agriculture, fostering resilient agribusinesses, and strengthening climate change adaptation and livelihood development. This investment plan represents a critical step towards ensuring food security, improving community well-being, and restoring essential ecosystem services across the country.”
Mary Porter Peshka - Regional Director for Eastern Africa, IFC
“IFC is excited to support Ethiopia’s participation in the CIF Nature, People and Climate Investment Program. This initiative builds on our strong partnership with the Government of Ethiopia through CIF and underscores our commitment to advancing nature-based solutions that tackle climate change, conserve biodiversity, and strengthen community resilience. By engaging the private sector as a key driver of sustainable development, we aim to mobilize investment and innovation to unlock economic opportunities, protect Ethiopia’s natural resources, and drive inclusive and climate-smart growth.”
Maryam Salim - Country Director for Ethiopia, Sudan, South Sudan and Eritrea, World Bank
“Ethiopia is spearheading one of Africa's most ambitious landscape restoration programs with robust support from IDA, Trust Funds, and results-based payments. The CIF NPC support will ensure continued financing and prioritize the protection of forests, biodiversity, and wetlands."
Learn more:
CIF Nature, People and Climate investment program
Ethiopia’s Investment Plan in brief – in full
