Ethiopia counts 10 cities with over 100,000 inhabitants and 115 urban centers with over 20,000 inhabitants.The country is also experiencing a high urban population growth rate.
The issues of water and sanitation are at the very heart of national priorities. Major investments have been made over the past few years, allowing a good coverage
in drinking water, especially in urban areas (97% of the urban population). However, the amount of water that is daily used remains low, mainly because of the
dilapidated state and lack of maintenance of the distribution networks.
The municipal water authorities (Town Water Utilities, TWUs), which are in charge of the maintenance of equipment and networks, of the water distribution and
of the billing and collection system, are still under-equipped: defective maintenance of facilities and existing networks, lack of investment planning and business plans, obsolete or nonexistent billing system, lack of asset management, etc.
The Water Resources Development Fund (WRDF) was set up by the Government in 2002 to implement its urban policy. It aims to mobilize resources for loans to finance
the irrigation, drinking water and sanitation sectors in secondary cities and reinforce their autonomy on the technical and financial aspects. The repayment of the loans granted to the TWUs allows the revolving fund to be replenished and a new cycle of investments for new cities to be financed.
The program aims to improve the living conditions of the Ethiopian population by increasing the sustainable accesses to drinking water in secondary cities — through
a support to an endogenous and permanent financing mechanism.
It will contribute to:
Strengthening water production and distribution,
Building the capacities of WRDF as the main tool for the implementation of the national urban water policy,
Building the management capacities and improving the financial sustainability of TWUs.
The 81.4 million euros program is co-financed by the European Investment Bank (EIB – 41.9 million euros), Italian Cooperation (IDC – 18.5 million euros) and Agence
Française de Développement (AFD – 21 million euros).
The program will contribute to improving the financial sustainability of TWUs, which will sustainably increase water service provision.
A functional water service will contribute to local economic development, as well as to improving living conditions for populations.
The loan repayments will be used to replenish the fund and will thus offer sustainable financing solutions to a large number of Ethiopian secondary cities.