The deal comes just a month after the bank approved 645 million dollars
In the midst of the drought, the World Bank (WB) has approved a quarter of a billion dollars as additional finance for the fourth productive safety net program (PSNP IV) and health care services.
This deal comes just a month after the bank approved 645 million dollars to reinvigorate the logistics sector, implementation of water supply and sanitation projects and to attain national quality infrastructure projects.
The first loan, approved on May 2, 2017, is to scale up the fourth productive safety net program to the prolonged drought in the country. Launched a decade ago, the PSNP provides regular food or cash transfers to food insecure people.
The safety net program is designed to respond to food insecurity that arises from shocks such as drought and chronic needs. Currently, it provides safety net support such as cash or food transfers to eight million people in eight regions of the country, of these half of them located in highly drought-affected areas.
"The finance will help to reach the poorest people further in the current drought response," said Carolyn Turk, WB country director for Ethiopia.
The fund has been approved as the country is struggling to counter a new drought which has left 7.8 million people in urgent need of assistance. This is higher than six months ago. At that time, it left 5.6 million people in need of immediate aid and killed thousands of livestock that local pastoralists depend on for their livelihood.
For the current drought, the government is appealing for 742 million dollars from the international community to respond to it. Also, the PSNP, according to the Bank, is witnessing a considerable funding gap.
Approved in 2014, PSNP requires a total cost of 3.6 billion dollars from the Bank and 11 development partners. Previously, the three PSNP projects worth 1.7 billion dollars were approved with the aim of enhancing food security for poor people in rural areas.
The first three phases, completed in 2006, 2010 and 2015, respectively, were financed by the Bank.
The estimated total budget of the PSNP from 2015 to 2020 is 3.6 billion dollars, with financing from the government and 11 development partners, including the World Bank.
Four days after the approval of additional funding for PSNP IV, the Bank also availed a 150 million dollar fund as additional financing for the health sustainable development goals program. The program primarily aims at advancing the delivery of a fully fledged package of maternal and child health services.
Also, it is expected to contribute to meet the commitment of the government to prevent maternal and infant deaths, according to the loan request proposal of the government.
The health-care system in Ethiopia is below the minimum requirement set by the WB. Over the past decade, although per capita expenditure has shown an improvement, it is still under the 86 dollars required to give a basic package of health services in low and middle-income countries.
Over the past two decades, the World Bank committed to more than 70 projects in the country. Up until the end of last year, the Bank financed 29 active projects with a commitment of about eight billion dollars.
Highway and bank development assistance were the first two projects of the World Bank in Ethiopia.