ETHIOPIA: City Creditworthiness and Municipal Financing – Technical Assistance for 5 Municipalities
PPIAF has been supporting the Ministry of Urban Development and Construction (MUDCo) over the last two years in instituting an enabling environment for public-private partnerships (PPPs) in order to set a resilient capital investment climate in Ethiopia. The support was mainly focused on the cities of Mekele (capital of the Regional State of Tigray), Adama (Oromia Region), Hawassa (capital of the Regional State of Southern Nations, Nationalities and Peoples "SNNP"), Bahir Dar (capital of the Regional State of Amhara) and Addis Ababa the capital of the Federal State, which is a chartered city.
City Administrations are local governments with executive, legislative, and judicial arms established under Regional State City Proclamations. They have their own budget. They are legally established and recognized as legal entities when the Regional State Government designate them as Urban Local Governments ("ULGs"). In the targeted Regional States, ULGs are providing specific services, which terms and conditions of delivery are specified under City Proclamations.
Through PPIAF support, these cities were able to:
- Assess the legal and regulatory framework and implications for sub-national governments to engage with the private sector;
- Identify opportunities for increasing their own source revenue collection at the local government level;
- Identify opportunities for developing climate-resilient capital investment projects.
Through PPIAF's Climate Resilience and Environmental Sustainability Trust Fund, the client could also identify ways of mainstreaming climate resilience in PPPs. These opportunities were based on the review of the sub-national PPP proclamation to incorporate climate adaptation strategies in the identification and preparation of PPP projects.
Specific capacity building to the national PPP unit and sub-national authorities working on PPPs was also provided to enhance their capacity to better identify climate risks in PPP contracts. The CREST support also facilitated drafting a policy brief to inform policymakers on the gaps in the policy landscape, the climate change risk considerations, and measures that would need to be put in place to boost resilience in PPP projects.