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Ethiopia CRGE Facility Main Documents
Ethiopia’s Climate Resilient Green Economy (CRGE) Initiative, developed by the Government of the Federal Democratic Republic of Ethiopia, outlines the vision, strategy, financing strategy, and institutional arrangements Ethiopia will need to pursue to attain the triple goals of economic growth, net-zero emission, and building resilience. The CRGE Initiative positions Ethiopia at the forefront of the low carbon revolution promised by the climate agenda. Ethiopia has huge low carbon potential – it is rich in forests and has ample renewable resources of hydro, solar, wind and geothermal energy. To make the most of this potential, Ethiopia needs to ensure that its long-term planning is compatible with a low carbon future, and to make itself as attractive as possible to carbon investors.
The CRGE Initiative, including the Green Economy Strategy, was launched in December 2011 in Durban (South Africa) by the late Prime Minister of Ethiopia during the 17th Session of the Conference of the Parties of the United Nations Framework Convention on Climate Change (UNFCCC).
To support the implementation of the priorities set out in the CRGE Strategy and Investment Plans the Government set up a national financial mechanism called the Ethiopia CRGE Facility. The CRGE Facility is the Government’s primary financial vehicle to mobilize, access and combine domestic and international, public and private sources of finance to support the institutional building and implementation of Ethiopia’s CRGE Strategy.
Building climate resilience is an urgent challenge for Ethiopia, as its weather is likely to become more unpredictable in the coming years, with increased flooding and drought. This will impact on all aspects of economy, including the health, transport, agriculture, natural resources, energy and industry sectors. To respond to this challenge, the government has developed Ethiopia’s Programme of Adaptation to Climate Change (EPACC).
While building its resilience, Ethiopia will also take steps to ensure that its economy is green and sustainable. Through initiatives like the Nationally Appropriate Mitigation Actions (NAMAs), some immediate priorities have been already identified.
The CRGE Initiative consists of the CRGE Strategy, an integrated planning process called ‘iPlan’ under which CRGE sector investment plans will be developed, CRGE institutions (CRGE Units in line ministries and in Regional States), a national Monitoring, Reporting and Verification (MRV) system and a CRGE Facility as a financial mechanism to support its implementation.
The Green Economy component has been completed for seven sectors that offer the highest greenhouse gas abatement potential: Power Supply; Buildings and Green Cities; Forestry (REDD+); Agricultural/Soil-based Emissions; Livestock; Transport; and Industry. Over 60 Green Economy initiatives have been identified for their potential to ensure that Ethiopia’s 2030 greenhouse gas (GHG) emission levels do not exceed the current 150 megaton CO2 equivalent. This avoids about 250 megaton CO2 equivalent that would be emitted if a conventional development path were followed to meet economic growth goals.
The Ethiopia CRGE Facility is governed by the CRGE Ministerial Steering Committee, chaired by the Prime Minister’s Office, which will determine the CRGE Facility priorities.
The CRGE Management Committee chaired by MOFED and includes representatives of the Environmental Protection Authority (EPA) and line ministries will prioritize the investment plans and make fund allocation decisions. The Facility Secretariat is a unit seated in MOFED that will support the Management Committee in close coordination with EPA and the CRGE Technical Committee. It will provide administrative and substantive support to the CRGE Technical and Management Committees.
The CRGE Technical Committee chaired by the EPA and includes MOFED and experts from line ministries and others will assess and approve investment plans submitted by line ministries and regional governments.
The Facility Advisory Group, chaired by one of the development partners and includes representatives of multilateral organizations, international NGOs, civil society, private sector and academia, will review investment plans and provide suggestions to the Technical and Management Committees.
The Facility-funded programmes will be implemented by the National Implementing Entities (federal and regional entities) in partnership with CSOs, private sector and academia. The MOFED is responsible and accountable for the effective development, implementation and monitoring and evaluation of the Facility’s portfolio implemented by the National Implementing Entities.
Participating UN Organizations and Multilateral Development Banks may be requested by the Government to provide capacity development and selected implementation services
The UNDP Multi-Partner Trust Fund Office (MPTF Office) serves as the provisional Trustee, providing fund administration services for funding that is channelled through the CRGE Facility’s International Account.
CRGE Facility Structure and Decision Making
The CRGE Facility will have Two Windows - Strategic Window and Responsive Window.
Strategic Window will exclusively finance the implementation of activities (investment plans) and associated institution-building requirements generated through the Government’s strategic ‘iPlan’ process. Investment plans would be submitted by line ministries and regional governments, jointly or in parallel to the standard government budget process. Funds will be allocated by the Management Committee against the investment plans, on an annual basis.
Sectoral investment proposals will feature both climate activities undertaken through mainstreaming into existing programmes and through additional programmes. Regional investment proposals are those submitted by regions (alongside ministries), aggregating Woreda proposals generated through the Mechanism to Motivate, Support and Reward Results (mMSRr). Over time, these plans should look to shift from grant to a reward or results-based mechanism for distributing funding. As with the sector investment plans, the regional plans should be generated through the iPlan process and be submitted on a yearly basis.
Public funds disbursed through the Strategic Window should be used to leverage additional investment. Investment proposals identified under each sector investment plan should specify their financing needs - broken down by source (public, private) and type (grant, guarantee, loan etc.). All mechanisms that are eligible for climate financing including Clean Development Mechanism (CDM) potential should also be identified accordingly in the investment plan.
Responsive Window that will fund demand-driven implementation and institution-building activities. It will be open to proposals developed outside the iPlan process on a demand-driven basis from a range of stakeholders. This window will be primarily accessed by Government institutions at federal, regional, local level and by communities. Academic institutions, civil society and private sector organizations will work in partnership with government institutions at federal, regional, local and community levels. They will all be encouraged to put proposals forward and proposals will need to demonstrate that they are aligned with CRGE goals as outlined in the CRGE Strategy and in particular with published investment plans.
Participating Organizations are required to submit final year-end expenditures by April 30 in the following year; Interim expenditure figures are submitted on a voluntary basis and therefore current year figures are not final until the year-end expenditures have been submitted.
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Fund Administration Issues: International Account