Ethiopia has embarked on a promising journey towards a green economic transition, leveraging green finance instruments to accelerate sustainable development. A recent Horizons study, presented at a workshop organized by FSD Ethiopia in collaboration with the Ethiopian Capital Market Authority (ECMA), FSD Africa, and the United Nations Development Programme (UNDP), highlights the potential of green bonds and carbon credits in advancing Ethiopia’s sustainable development agenda.
The study emphasizes that Ethiopia’s vast natural resources and cultural heritage can attract both domestic and foreign investment by transitioning to carbon-free and environmentally friendly financing methods. Creating conducive conditions is crucial to realizing this potential, including building capacity to monitor and report on green development activities, developing coherent policy frameworks that encourage green investment, and fostering active public-private sector partnerships to mobilize necessary capital.
Esayas Kassa, ECMA Deputy Director General, underscored the responsibility to the environment and future generations, calling for an economic system that harmonizes with nature and ensures societal well-being. The workshop discussions focused on adjusting economic strategies, increasing resilience to climate change, creating incentives for green innovation, and leveraging the private sector to develop a pathway for green development.
Belinda Kaimuri, a senior consultant at Genesis Analytics, noted that the study clearly demonstrates the potential of green bonds and carbon credits in Ethiopia. Stakeholder feedback is crucial to ensure the success of these financial instruments. The study explored various fundraising methods, offering new hope for the country’s sustainable development.
Ethiopia’s green economy strategy is part of a broader vision to achieve middle-income status by 2025 while minimizing greenhouse gas emissions and promoting sustainable development. The Climate-Resilient Green Economy (CRGE) initiative focuses on four key pillars: improving agricultural practices, protecting and re-establishing forests, expanding renewable energy, and adopting energy-efficient technologies in transport and industry.
