The Reporter (Addis Ababa)
Melaku Demissie
22 December 2007
Addis Ababa — The World Bank's Board of Executive Directors on Friday approved a US$215 million International Development Association (IDA) grant to the Government of Ethiopia to continue protecting and promoting the delivery of basic services by sub-national governments while deepening transparency and local accountability in service delivery.
The bank said that current financing supplements the US$215 million already committed over the past 18 months of implementation of the Ethiopia Protection of Basic Services (PBS) Program, bringing the total IDA financing of the PBS project to US$430 million.
The project has five components in the areas of basic service program, promoting the health millennium development goals, strengthening governance on financial transparency and accountability, and social accountability.
Basic services program, comprises two sub-components: the first one - promoting the delivery of basic services by sub-national governments - will continue to support the delivery of basic services (in health, education, agriculture and natural resources, including water) provided by regional and local governments. And the second, pilot local investment grants (LIG), will support the scaling-up of the program's impact on local service delivery. This new subcomponent will support the introduction, on a pilot basis, of a Federal Specific Purpose Grant (SPG) to regions to be used exclusively for capital investment implemented by local governments in support of the delivery of basic services.
The additional financing of US$215 million would address the financing gap largely associated with the completion of core activities under the existing component 1 - Promoting the Delivery of Basic Services by sub-national governments, and component 2 - Promoting the Health Millennium Development Goal (MDG), of the Project, the bank said.
The bank added that in approving the additional financing, the World Bank's Executive Board recognized and appreciated the impressive impact the PBS is having on the expansion of basic services in Ethiopia, the strong commitment that the government has demonstrated in expanding pro-poor public services, and this being a good example of result-focused donor harmonization in an area that is so central to achievement of the MDGs.
"The PBS is pushing the frontier in terms of improving service delivery on a large-scale and making it more accountable to the people," said Kenichi Ohashi, the World Bank's Country Director for Ethiopia and Sudan. "The challenges are significant but these are the building blocks for true local empowerment. The international community looks forward to a sustained national effort to reach the MDGs and to do it in a way which taps into the potential of local communities in making decisions that affect the lives of themselves and their children."
The PBS project is supported by a broad coalition of development partners including the African Development Bank (AfDB), Canadian International Development Agency (CIDA), Britain's Department for International Development (DID), the European Commission (EC), Irish Aid, Germany's KfW, the Netherlands, and the World Bank. The development partners have contributed over US$800 million thus far via the original PBS, with additional financing of approximately US$375 million expected of which the World Bank is providing US$215 million. The Government and the international community have agreed that these additional funds will be utilized for the next year, during which time preparations will be launched to develop a successor to the PBS in support of decentralized service delivery for the medium-term.
In a related news, the World Bank's Board of Executive Directors approved on Friday an International Development Association (IDA) credit of US$41.05 million to the Government of Ethiopia to help the country finance its portion of a new transmission line connecting Ethiopia's power grids to Sudan's. The Ethiopia-Sudan Inter-connector will allow power trading between the two countries, where just 6 [17 percent according to official statistics] and 22 percent of the respective populations have access to electricity, thereby promoting Ethiopia's power export revenue generation capacity.
The transmission line will run between the Ethiopian towns of Bahir-Dar and Metema and up to the border with Sudan to connect the countries' grids.
The project will also enable Sudan to replace domestic thermal generation with surplus hydropower from Ethiopia, reducing Sudan's greenhouse gas emissions. This will enable the two countries to better integrate their reserve capacity, thus improving reliability on the interconnected system, and ultimately providing savings on capital and operating costs.
"This project is the first power connection within the framework of the Nile Basin Initiative and is an important step in contributing to cross-border trade and regional interconnection as part of a growing power trade agenda in the region," said Philippe Benoit, World Bank task team leader for the project.
The Nile Basin Initiative (NBI), a partnership of the riparian states of the Nile, is providing a framework for promoting cross-border investments that are designed to generate benefits both at the country and regional levels. Although the power systems are largely undeveloped in the region, there are extensive, untapped sources for power generation as well as a desire to improve access to electricity for both domestic and industrial/commercial consumers.
"The Ethiopia-Sudan Transmission Interconnection Project is one of the first tangible investments from the NBI, and is an important step in converting the collaborative intentions of the countries into physical investments and benefits," said Ashok Subramanian, Manager Africa Water Resources Group. "Over the long term, we expect that this project will improve the effectiveness of the power systems of the Nile Basin countries and beyond, by promoting regional power trade through the establishment of coordinated planning and the erection of transmission interconnections."
The project represents an important step in a broader power trade agenda for the region, where interconnections with Djibouti, Kenya, Tanzania, Southern Sudan, Somalia, and Yemen are being planned.
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