Climate Finance for Railway Development in Ethiopia Adriaan Korthuis Kigali, 17 August 2015

Building electrified railways today, clean transport tomorrow Reliable transport is a precondition to economic growth: a key pillar of the CRGE strategy Close cooperation within government: MoFED, MEF, MoT, Addis Ababa City Administration Railroads assure that economic growth remains independent from fossil fuel Electric railways: domestic clean source of energy: hydro, wind and geothermal

The Ethiopian Railways Corporation is building railroads ERC has been set up to implement and operate railways in Ethiopia 730 km track Addis – Djibouti to be commissioned in 2015 Phase I LRT Addis Ababa to be commissioned in 2015 By 2020: over 5000 km of track

Construction is on-going

Electrical railroads reduce 9 million t CO2e per year by 2030

ERC Climate Finance Strategy Carbon credits Direct payments for emission reductions NAMA Framework Non-market mechanisms GCF Supportive actions and recognition Other opportunities Innovative financing

Project agenda 1 - CDM Development of the LRT Increase operational revenue of the LRT Anticipating recovery of carbon markets in the mid and long term Successful application to UNOPS

Project agenda 2 – Transit Oriented Development Transit Oriented Development (TOD) to increase ridership to increase LRT revenue Promotion of mixed-use of public, residential and commercial areas NAMA design to develop TOD Create institutional framework Carry out one pilot Prepare implementation plan for 10 stations Set up a structured debt fund to enhance private sector investment Proposals to NAMA Facility and GCF

Institutional set-up for GCF Application: Ethiopia’s CRGE Facility Climate Resilient Green Economy Middle income status by 2025 while retaining emissions Basis of policy making CRGE Facility Climate Facility for Ethiopia Board by six ministries Managed by Ministry of Finance and Economic Development Technical coordination by Ministry of Environment and Forest Application for Accredited Entity at the GCF Sectoral programmes per ministry Sectoral Programme Ministry of Transport TOD 2nd phase Light Rail Bus Rapid Transit BRT Bicycle infrastructure Cleaner transport

Project agenda 3 – MRV Master Plan Carbon credits from National Railways: develop methodology MRV of supportive measures Link to national and international reporting

Project agenda Further projects Registered at UNFCCC: Railway NAMA for recognition Railway academy NAMA Climate vulnerability NAMA http://www.bbc.com/news/business-24869433

Conclusion Building railroads is a key pillar of the CRGE transport strategy Ethiopia is undertaking two ambitious projects to make this happen: the National Railway Development Plan and the Addis Ababa Light Rail Transit project. Transport by rail avoids emissions of greenhouse gasses by 9 million t CO2e /y. Transport by rail boosts green growth. Large scale climate finance is essential to sustain and scale-up railway development A mixed package of climate finance is looked for, relying both on carbon credits and on donor support. Close coordination within government through the CRGE Facility

Contact details Adriaan Korthuis a.korthuis@climatefocus.com www.climatefocus.com www.ercclimatefinance.com 17 September 2018