Ethiopia's Finance Minister Urges for operationalizing Innovative Financing Mechanisms to Sustain Dev’t

Addis Ababa December 19/2024 (ENA)—Ethiopian Finance Minister Ahmed Shide stressed the need for collaborating in exploring and operationalizing innovative financing mechanisms to advance sustainable development and climate resilience.

FSD Ethiopia hosted its inaugural Climate Finance Summit in Addis Ababa today, bringing together stakeholders to address climate change challenges and accelerate Ethiopia's green transition.

The objectives of the summit are to explore innovative financing solutions and accelerate Ethiopia's transition to a climate-resilient green economy.

Speaking at the summit, Finance Minister Ahmed Shide emphasized Ethiopia's unwavering commitment to combating climate change and building a sustainable future.

“A shining example of our commitment is the Green Legacy Initiative (GLI), by rallying millions of Ethiopians, we have planted over 36 billion trees, reversing deforestation and conserving biodiversity,” he recalled.

To sustain these gains, the minister added, for upcoming rounds of green legacy and degraded landscape restoration, a special fund will ensure robust governance and long term impact, strengthening resilience.

Moreover, the Ministry of Finance has recently upgraded its Green Climate Fund (GCF) accreditation from small to medium status, he said.

“This milestone enhances our ability to mobilize resources for transformative projects that align with our Nationally Determined Contributions (NDC) target supporting our journey towards the climate resilient economy,” he noted.

Ethiopia's vulnerability to climate change by erratic rainfall, prolonged drought and environmental degradation jeopardize the food security, livelihood and the economy, the minister stated.

To this end, “We remain steadfast in our resilience and determination. Our efforts, grounded in the Climate Resilient Green Economy (CRGD) strategy launched in 2011 has positioned Ethiopia as a leader in mainstreaming climate resilience and sustainability into a national development program,” he said.

Over the past decade, "we have made remarkable progress. Ethiopia’s submission of ambitious, NDCs, the development of long-term low-emission development strategy and the integration of climate priorities into our 10 Year Development Plan are just a few examples.”  

With the establishment of the CRGD facility within the Ministry of Finance, we have been able to mobilize climate finance at scale supported by innovations like climate budget tracking, he added.

Ethiopia will continue advocating for equitable, accessible and innovative climate finance mechanisms.  

"As we reflect on the outcome of COP 29, it is clear that the stakes are higher than ever,” he noted. “The adoption of the new Collective Quantified Goal (NCQG) for 300 billion annually in climate finance is a positive step, but much more is needed to address the 1.3 trillion annually that experts estimate is required.”

He stressed that inclusive and equitable climate finance is very essential. "Vulnerable groups, including women, youth and marginalized communities, "must be at the heart of our climate solutions," he said.

According to him, empowering women and fostering gender responsive financing strategies are critical components of Ethiopia's climate resilience initiatives.

Noting that Ethiopia’s journey demonstrates the power of partnerships and the collective public action, he said; initiatives like Green Legacy Initiative and the integration of climate considerations into fiscal systems exemplify our leadership and innovation.

Therefore, he urged all stakeholders to collaborate in exploring and operationalizing innovative financing mechanisms to advance sustainable development and climate resilience.

According to him, “this summit provides a platform to exchange knowledge, forge partnerships and design solutions that propel us toward sustainable and climate resilient Ethiopia.” 

One of the key highlights of the summit is the focus on Ethiopia's climate finance strategy which includes reducing greenhouse gas emissions by 68.8 percent by 2030, as outlined in the country's updated NDCs, it was indicated.

The summit seeks to harness the opportunities presented by COP29, where global leaders committed to scaling up climate finance to help developing nations mitigate and adapt to climate change.

FSD Ethiopia CEO, Hikmet Abdela said Ethiopia has been facing climate change impacts.

"Despite these challenges, Ethiopia remains steadfast in its commitment to becoming a climate-resilient green economy by 2030."

However, addressing significant gaps in the climate finance landscape is crucial to realizing this vision, the CEO noted. 

This summit is an important opportunity for all stakeholders to come together and chart a clear path forward for climate finance in Ethiopia, with a focus on inclusivity and sustainability, she added.

The one-day summit features panel discussions and interactive sessions with industry experts, including government officials, financial leaders, and representatives from international organizations.