The Ethiopian Climate Resilient Green Economy (CRGE) Strategy and the CRGE Facility
4.The CRGE Facility
To secure finance for the implementation, Ethiopia established the CRGE Facility within the Ministry of Finance and Economic Development (MOFED) in 2012. The CRGE Facility aims to mobilize additional resources from domestic, international, public and private sources and to ensure that implementing entities at federal and regional levels have access to sufficient funds. The Facility has a number of financing instruments such as loan, co-financing, result based payment, grantee, grant, etc. The Facility was established with a view to channel all climate and domestic finance into one multi-donor trust fund, operated and hosted by the Ministry Finance and Economic Development (MoFED). The Facility foresees to allocate resources to sectors according to9 prioritized investments as detailed the sectorial implementation plans. Its resources will complement existing investment and funding streams, meaning that ministries could therefore draw on the Facility to access additional funding for CRGE projects. Resources disbursed to sectors from the Facility are channeled through existing delivery mechanisms.
4.1 The CRGE Facility Structure and Governance
The structure of the CRGE Facility is tailored to the unique circumstances and needs of Ethiopia, and its scope of work. With regard to the governance arrangement, an inter-ministerial steering committee, which is comprised of the CRGE implementing sectors and chaired by the Prime Minster Office (PMO), among others sets overall policy direction and provides guidance. Under this umbrella, there is CRGE Facility Management which oversights the operations and functioning of the Facility. The Management Committee is Co-chaired by State Ministers of MOFED and MEF, which is a manifestation of genuine collaboration between the two ministries in coordinating and pushing the agenda of Green Growth and Climate Change Resilience building forward. A secretariat, which is comprised of technical staff in MOFED and MEF, ensures that the Facility provides its functions and coordinates its portfolio. An advisory board comprised of non-state actors and developmentsprovides technical advice and support to the Facility Secretariat.
4.2 Capitalizing the CRGE Facility and Financing the CRGE Initiatives
The government of Ethiopia has been allocating significant amount of domestic public finance annually for implementation of projects and programs that have contribution to both GHG emissions reduction and climate change resilience building. The government is investing in clean energy sources from as hydro, geothermal, wind and solar. It is also allocating finance and mobilizing the wider public on landscape management and restoration.
Furthermore, the government is mobilizing development partners to provide support to the green growth agenda of the country and channel their support through the CRGE Facility. Since late 2013, development partners have started to capitalize the CRGE Facility. Austria provided an initial tranche of development support; DFIF provided further, substantial tranches of support. Other developing partners have also committed to provide support through the Facility. The Facility currently has signed MOU with six federal line ministries to finance over 40 projects and is in the process of disbursing the first tranches of support to the line ministries
The government of Ethiopia which has been working towards the overall economic development and social wellbeing of the society is in a promising socio-economic path that the international organizations and development partners witnessed. According to the recent measurements, it became public knowledge that Ethiopia has been one of the fastest growing countries in the world. Moreover, the Ministry of Finance and Economic Development (MoFED) that has the powers and duties of initiating policies which ensure sustainable and equitable economic development as well as macro-economic stability in the country has been working focusing on the green economy. Therefore, the CRGE Facility is a very crucial mechanism in order to implement the green economy strategy which aims to achieve sustainable development with net-zero emission and building resilience.
As cited in the ‘Green Economy Strategy, September 2011’ developed under Ethiopia’s CRGE. It should be noted that not all of this expenditure is necessarily additional to current investment plans – rather, a large part of this expenditure (for example, for power generation infrastructure or transport infrastructure) would also occur in a conventional growth scenario.