WB approves $600mln financing for better urban governance, infrastructure in cities across Ethiopia

Addis Ababa, March 17, 2018 (FBC) -The World Bank on Thursday approved $600 million of IDA financing to help strengthen the capacity and performance of local urban governments, expand sustainable urban infrastructure and services, as well as promote local economic development in cities across Ethiopia.

Ethiopia is one of the fastest urbanizing countries in Sub-Saharan Africa, with the urban population growing at 3.8 percent a year. Rapid urbanization poses challenges as cities struggle to provide infrastructure, services, and jobs.

Since the early 2000s, the World Bank has been helping Ethiopia to address these challenges and foster smart urbanization including through the Urban Local Government Development Program (ULGDP).

The program which has played a key role in improving the institutional performance of local governments is also the foundation upon which the new Urban Institutional and Infrastructure Development Program (UIIDP) is built.

“While the new investment builds upon the successes of ULGDP, it also incorporates important lessons learned and introduces a new approach. This new approach will help Ethiopia to develop a strategy for sustainably financing urban development,” said Carolyn Turk, World Bank Country Director for Ethiopia.

UIIDP will scale up activities initiated under ULGDP to support 73 new cities-for a total of 117-across nine regional states and benefit more than 6.6 million Ethiopians. It envisions that all cities will in the long term generate increasing levels of own-source revenues, with which to finance investments in infrastructure and deliver services.

“To successfully manage urbanization and deliver on their evolving mandates, cities are likely to require fiscal transfers for the foreseeable future. This program will help cities to realize their revenue potential,” said Abebaw Alemayehu, World Bank Task Team Leader for the Project.

The UIIDP is aligned with the government’s second Growth and Transformation Program (GTP), and with the strategies of policies of the Ministry of Urban Development and Housing’s, the Ethiopian Cities Sustainable Prosperity Goals for 2015/2016–2024/2025: Building Green, Resilient and Well Governed Cities, and the National Urban Development Spatial Plan.