World Bank provides $600 million loan to Ethiopia

From Left: Managing Director and Chief Operating Officer, Sri Mulyani Indrawati who in Septemebr 2014 visited Ethiopia at a press conference with Guang Z. Chen World Bank's Country Director for Ethiopia - Photo- Andualem Sisay Gessesse

With intention of expanding access to safety net and disaster risk management systems, as well as provide nutrition services and income support to food insecure families living in rural Ethiopia, the World Bank approved $600 million loan to Ethiopia. 

The World Bank’s Board of Executive Directors today (September 30, 2014) approved the fund through International Development Association (IDA) credit to Ethiopia for the Productive Safety Nets Project 4 (PSNP4), according to the press statement from the Bank.

In 2005 the Government of Ethiopia funded with support from other development partners the Productive Safety Nets Program (PSNP). Since it was launched, the program has made notable contributions to reduce household vulnerability and food insecurity, improve resilience to shocks and promote sustainable community development in rural areas of Ethiopia.

It focused on important public works resulting in improvements to rural infrastructure and enhanced access to education and health services. To mitigate the risk of economic and climate related shocks, the PSNP introduced soil and water conservation activities, small scale irrigation, and integrated watershed management

Today’s project (PSNP4) builds on the 10 years of the program’s success and contributes to reducing poverty and promoting shared prosperity by providing a safety net for Ethiopia’s food insecure and most vulnerable people. To face the challenges of improving nutrition, PSNP4 will provide support to the nutritional goals of the country and address long-term income challenges.

It will support Ethiopia in building systems for social protection and disaster risk management. This will include investments in developing a national registry for social protection interventions and clients, improved management information systems, and efforts to modernize how payments are made

“Since its launch nearly a decade ago, the Productive Safety Net Program has made unparalleled contributions not only to food security and Ethiopia's progress in meeting many of the MDG goals, but to reversing land degradation,” said Guang Z. Chen, World Bank Country Director for Ethiopia.

“PSNP4 will build on these successes, and also support the development of long-term social protection systems and disaster risk management. I am very pleased that the program will be expanded across the country to eventually reach up to 10 million people each year.”        

The PSNP4 will be implemented in 411 districts in Ethiopia, reaching up to 10 million food insecure people per year and includes a total budget of approximately US$3.6 billion from the government and 11 development partners including the United Kingdom’s Department for International Development, Irish Aid, the European Union, Canadian International Development Agency, Swedish International Development Agency, the Netherlands, Danish International Development Agency, the United States Agency for International Development, UN Children's Fund, the World Food Program and the World Bank.