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 ten ecosystem service accounts were prepared and are slated for completion in FY26. These accounts included water regulation, carbon retention and sequestration, water supply, water quality, soil fertility, biomass provisioning, timber, fuel wood provisioning, medicinal plants, gums and incense.
A draft of the Natural Capital Accounting Roadmap was completed in FY25. The roadmap will incorporate information from both the accounting activities and the Investment Prioritization Tool (IPT) developed earlier by the Ethiopia CIC program.
In addition, recent the analysis Adoption of land restoration activities in Ethiopia: Understanding gender-labor dimensions examined gender, poverty, and social inclusion in sustainable land management, focusing on female labor’s role, the effects of private land restoration on household well-being, and underlying mechanisms. Using data from Ethiopia's LSMS-ISA survey, findings indicate that female labor is essential for adopting and expanding land restoration on private farms, leading to higher adoption rates and larger restored areas over time. In addition, the analysis informed the WB publication Nature's Paradox: Stepping Stone or Millstone?.
Informing investments and/or policies
The Ethiopia CIC program has informed the Climate Action Through Landscape Management Project over previous years and guided the design of its second phase, CALM2, a World Bank project with a US$200 million budget for FY25. The IPT tool helped the Ministry of Agriculture's technical team assess, identify 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, the grant activities have played a significant role in supporting technical assistant to Ethiopia’s EPA for the development of the Payment for Ecosystem Services (PES) Proclamation, including inputs on technical aspects of PES design regarding conditionality, ecosystem services covered, benefit-sharing, and monitoring best practices, for the agency to consider during the drafting of the proclamation. The Proclamation received approval from the Council of Ministers in FY25 and is now pending review by the federal parliament for final adoption. This legislation serves as the foundation for establishing PES programs within 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 the development of land and ecosystem accounts and the IPT was implemented in October 2024, with the presence of 24 participants from governmental institutions and 2 participants from collaborating agencies.
In addition, a workshop to cover the finalization of the land accounts and the NCA Roadmap as well as the concept and design of ecosystem accounting took place on April 2025, where 16 participants benefited. Some of the participating organizations include the Ministry of Planning and Development (MOPD), Ministry of Agriculture (MoA), Ministry of Water and Energy (MoWE), Ministry of Urban and Infrastructure (MoUI), Ministry of Mines (MoM), Ministry of Irrigation and Lowlands (MILL), Ethiopia Forestry Development (EFD), Environment Protection Authority (EPA).
Implementing partners also participated in a special south-south knowledge exchange and hands-on training program on IPT methods, together with representatives of Kenya Watershed Investment Project (KEWASIP) which took place in Kenya during February 2025.
Communication
Results and lessons from Ethiopia’s IPT-based watershed prioritization tool were presented at the World Bank’s CALM mission in June 2025. The team also provided the MoPD with an update on key NCA achievements and progress to date to inform the Ethiopia NCA Steering Committee’s first meeting.
