DEVELOPMENT OF NATURAL CAPITAL ACCOUNTS, DATA, TOOLS, AND ANALYSES
Significant progress was made on grant activities in FY25, with final land and ecosystem extent accounts completed after prior revisions. Drafts and data for 10 ecosystem service accounts were prepared and are slated for completion in FY26: water regulation, carbon retention and sequestration, water supply, water quality, soil fertility, biomass provisioning, timber, fuel wood provisioning, medicinal plants, and gums and incense.
A draft of the Natural Capital Accounting Roadmap was completed in FY25 that will incorporate information from the accounting activities and the IPT developed earlier under the Ethiopia CIC program.
The recent analysis Adoption of Land Restoration Activities in Ethiopia: Understanding Gender-Labor Dimensions examined GEPSI in sustainable land management, focusing on female labor’s role, effects of private land restoration on household well-being, and underlying mechanisms. Findings from Ethiopia’s Living Standards Measurement Study Integrated Surveys on Agriculture indicate that female labor is essential for adopting and expanding land restoration on private farms, leading to higher restoration practices adoption rates and larger restored areas over time. In addition, the analysis informed the World Bank publication Nature’s Paradox: Stepping Stone or Millstone?
INFORMING INVESTMENTS AND POLICIES
The Ethiopia CIC program has informed the Climate Action Through Landscape Management Project and guided the design of its second phase, a World Bank project with a US$200 million budget for FY25. The IPT helped the Ministry of Agriculture’s technical team identify, assess, and target areas for land restoration and investment. As one of the few nationwide studies on the socioeconomic aspects of sustainable land management, this assessment has facilitated client engagement and earned support from the ministry.
On the policy side, grant activities have played a significant role in supporting technical assistance to Ethiopia’s Environmental Protection Authority for development of the PES Proclamation, including inputs on technical aspects of PES design regarding conditionality, ecosystem services covered, benefit sharing, and monitoring of best practices for the agency to consider during drafting of the proclamation. The proclamation received approval from the Council of Ministers in FY25 and is pending review by parliament for final adoption. This legislation serves as the foundation for establishing PES programs in the country.
CAPACITY BUILDING AND INSTITUTIONALIZATION
In FY25, multiple capacity-building training sessions were conducted to strengthen the institutionalization of the IPT and NCA. A training workshop focused on development of land and ecosystem accounts and the IPT was held in October 2024 and had 24 participants from governmental institutions and two from collaborating agencies. A workshop to cover finalization of land accounts and the NCA Roadmap and the concept and design of ecosystem accounting was held in April 2025 and had 16 participants. Participating organizations included the ministries of Planning and Development, Agriculture, Water and Energy, Urban and Infrastructure, Mines, and Irrigation and Lowlands; Ethiopian Forestry Development; and Environmental Protection Authority. Implementing partners, together with representatives of the Kenya Watershed Investment Project, also participated in a special South-South knowledge exchange and hands-on training program on IPT methods in Kenya in February 2025.
COMMUNICATION
Results and lessons learned from Ethiopia’s IPT-based watershed prioritization tool were presented at the World Bank Climate Action Through Landscape Management mission in June 2025. The team also updated the Ministry of Planning and Development on key NCA achievements and progress made to inform the Ethiopia NCA Steering Committee’s first meeting.
