The UK government said this week it is working to mobilize funding for climate resilience projects in Ethiopia even as its Foreign Office announces plans to cut aid to Africa by close to 60 percent over the coming three years.
On Thursday, the British Embassy, in partnership with Justicia Media, the British Council, and the Addis Ababa Environmental Protection Authority, launched the second phase of Green Future Africa (GFA) at the British Council in Addis Ababa.
The program aims to support 100 youth-led green enterprises by providing intensive training on business fundamentals and six months of tailored legal and business advisory support. Rachel Kyte, UK special representative for climate, spoke about climate finance during the event, pledging the British government would work to mobilize funding through investment modalities.
“We will find solutions, both publicly funded and privately funded, because this is an extreme emergency affecting all countries everywhere,” said Kyte.
The event came on the heels of an announcement from the UK Foreign Office, which says that the value of the UK’s programs in Africa will fall from around USD two billion annually in 2024/5 to USD 900 million in 2029. Kyte acknowledged that much of the funds will be funneled towards defense spending instead.
The cuts are expected to worsen financial constraints in climate and health programs, and heighten concerns over a years-long funding crisis that became even more pronounced with the closure of the US Agency for International Development last year.
The developments have already had a negative impact on Ethiopia, particularly in the health sector, and last week’s announcement suggests funding will continue to be a chokepoint for the country’s climate projects.
A report presented by the Climate Policy Initiative (CPI) in Addis Ababa earlier this month reveals that climate finance flows to Ethiopia have remained largely stagnant. Ethiopia received only about USD 82 billion in climate finance between 2011 and 2019, which is just 1.3 percent of what is required to meet its climate goals.
Climate finance in Ethiopia is heavily dominated by international public funding while private sector participation remains limited. Public actors committed about USD 2.2 billion annually in 2022/3, representing a 23 percent increase compared to the previous year.
Most of this funding came in the form of grants (80 percent) and concessional debt (14 percent). Multilateral development finance institutions accounted for the largest share, followed by donor governments. Ethiopia’s domestic budget allocated roughly USD 274 million—about 12 percent of total public climate finance—to climate-related projects.
Meanwhile, Addis Ababa is preparing to host the 32nd UN Climate Change Conference (COP32) in 2027.
Kyte says the UK, which organized COP26 in Glasgow in 2021, is offering to assist Ethiopia in organizing the conference, which could draw more than 80,000 participants to the Ethiopian capital.
“Every possible aspect of society comes to a COP. Creating a space where everybody can talk to each other, settle differences, and agree on priorities is really important,” she said. “We are sharing our experience and technical knowledge on how to host the event, but also our analysis on the substance of what the event will discuss,” she said.
