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17 May, 2007
ADDIS ABABA - The Ethiopian government yesterday signed financial grant and loan agreements amounting to over 2.6 billion birr with the World Bank and the European Commission (EC).
The 150 million euros (1.8 billion birr) EC grant would support the government’s “Protection of Basic Services (PBS)” programme.
The 100 million USD (898.80 million birr) grant and loan by the World Bank would finance the urban water supply and sanitation projects in particular. Out of the 100 million USD, 65 million USD is in the form of loan and the balance grant.
The agreements were signed by State Minister of Finance and Economic Development (MoFED) Mekonnen Manyazewal on the Ethiopian side and Head of the EC Delegation to Ethiopia Ambassador Tim Clarke as well as World Bank Country Director for Ethiopia and Sudan Ishac Diawn on behalf of their respective organizations at a separate ceremony held at the Ministry hall.
Speaking at the signing ceremony, Mekonnen said the EC grant would be utilized to accelerate growth of pro-poor basic services of the country.
He said: “This grant, which is the second major operation financing agreement signed with the Commission next to 150 million euro agreement for the Road Sector Programme, would be utilized for financing key pillars of five-year plans enhancing basic services at state and local level.”
The grant, which would be implemented under PBS programmes to strengthen the fiscal capacity of the Federal Government to finance primary and secondary education, health and agricultural and natural resource sectors of state and woreda, is supported by multi-donors including the EC managed by the World Bank, he added.
The EC contribution to the programme is planned to be disbursed over three year period beginning this fiscal year with the release of about 80 million euro.
Ambassador Clarke also said that the grant is designed to ensure service delivery of a number of essential service sectors at local level so as to accelerate the government’s drive to achieve the Millennium Development Goals (MDGs).
There is also an important focus on enhancing transparency and accountability of local governments’ activities through monitoring of the funding by local society organizations, he added.
After signing the agreement with the World Bank Country Director, the State Minister also underscored that the fund would be used to finance projects aimed at increasing access to sustainable water supply and sanitation services in Addis Ababa, Jimma, Gondar, Makalle and Awassa.
The water supply and sanitation projects are critical in terms of accelerating growth and providing basic services, Mekonnen added.
The Country Director on his part said that the financial agreement would contribute a lot to achieve the needs and the right to have accesses to clean water.
The operation would also help the government to increase the supply of urban water and the efficiency of water system and the construction of sanitation system in Addis and other four secondary cities in order to achieve the MDGs in 2015.