Highlights

World Bank strategies, informed by its own analytic work, increasingly emphasized climate resilience in three relevant areas: sustainable land management, agriculture, and safety nets.

The World Bank helped dramatically increase the coverage of sustainable land management in Ethiopia, contributing to reduced land degradation and improved vegetation cover.

The World Bank mainstreamed climate resilience into its agriculture and rural development efforts, garnering positive operational outcomes. Efforts to expand irrigation were less successful.

The World Bank’s long-standing support for the government’s Productive Safety Net Program has effectively targeted poor and food-insecure populations and made progress in ensuring food security. It was meant to provide a more sustainable alternative to emergency food aid, but it still relies on external funding and was unsuccessful in graduating beneficiaries from the program.

This chapter evaluates the Bank Group’s efforts to build climate resilience in Ethiopia. It provides an overview of the Bank Group’s strategies, analytics, and technical support related to climate resilience. Next, the chapter evaluates the World Bank’s efforts to build climate resilience through three major areas: sustainable land management, agriculture and irrigation, and social safety nets. The chapter finds that the World Bank’s climate resilience–building efforts were relevant to the government’s priorities and led to a large expansion in the sustainably managed land. However, the World Bank’s support for irrigation and the national safety net program had more mixed results.

Ethiopia has demonstrated a strong commitment to climate adaptation and resilience. In 2005, Ethiopia launched the PSNP to enhance food security and resilience by providing climate-adaptive support to vulnerable communities. In 2011, it introduced the Climate-Resilient Green Economy strategy with a focus on building resilience in agriculture, water management, and other sectors. In 2015, Ethiopia became an early signatory to the Paris Agreement, submitting ambitious nationally determined contributions (NDCs). These NDCs went beyond mitigating emissions and laid out specific climate resilience measures, setting them apart from other NDCs and distinguishing Ethiopia as a proactive actor in climate adaptation. In 2017, Ethiopia developed its National Adaptation Plan under the United Nations Framework Convention on Climate Change guidelines, which outline the country’s medium- and long-term adaptation goals. The plan was followed by the 2019 National Adaptation Plan Implementation Roadmap, which specifies adaptation interventions (Ethiopia 2020). These efforts emphasize the seriousness with which the government treated climate adaptation and indicate a conducive political environment for the Bank Group’s climate resilience efforts.

Figure 4.1. Major Events in Ethiopia and Key Climate Resilience Interventions by Fiscal Year

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Figure 4.1. Major Events in Ethiopia and Key Climate Resilience Interventions by Fiscal Year

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Source: Independent Evaluation Group.

Note: AF = additional financing; AGP = Agricultural Growth Program; APL = adaptable program loan; CPF = Country Partnership Framework; CPS = Country Partnership Strategy; ESA = Eastern and Southern Africa; PSNP = Productive Safety Net Program; (R) = regional projects with significant component in Ethiopia; RPSNP = Rural Productive Safety Net Program; SEASN = Strengthen Ethiopia’s Adaptive Safety Net; SIL = specific investment loan; UPSNP = Urban Productive Safety Net Program; UPSNJP = Urban Productive Safety Net and Jobs Project.

The World Bank’s support for climate resilience was less affected by the changing context during the identified three periods of the evaluation compared with other sectors. Sustainable land management and social protection consisted of cohesive longer-term programs that did not rely on substantial policy reforms. In agriculture, the focus on improving the practices of smallholder farmers was aligned with government priorities, but the reforms in relevant areas—particularly irrigation, input markets, and agrifinance—did not materialize throughout the period. Adjustments primarily happened through an increased use of additional financing and regional projects during the period of crises—when poverty increased because of slower growth, conflict, and various shocks—and the attempt to adjust the implementation (see chapter 2). Social protection, however, did not adapt as well to non-climate-related shocks, such as the conflict in Tigray, when it was also affected by funding shortages, which did not allow it to expand sufficiently or meet humanitarian needs. Nonetheless, the program was able to quickly adjust its urban safety nets to provide some support for the inflow of internally displaced persons (figure 4.1).

The World Bank’s Climate Resilience Strategies and Advisory Services and Analytics

The World Bank’s strategies increasingly emphasized climate resilience throughout the evaluation period and were informed by its own analytic work. The CPS supported the Climate-Resilient Green Economy initiative and Ethiopia’s GTP I by enhancing climate resilience and reducing vulnerabilities through social protection, risk management systems, disaster risk management, and natural resource management. The CPF gave climate resilience a greater focus, with the World Bank prioritizing natural resource management, increased agricultural productivity, and improved ecosystem services to mitigate climate risks, along with access to irrigation, conservation agriculture, and extension services to help farmers adopt agricultural technologies.1 The CPS and the CPF were informed by relevant ASA. For example, Economics of Adaptation to Climate Change (World Bank 2010) and “The Cost of Adapting to Climate Change in Ethiopia: Sector-Wise and Macro-Economic Estimates” working paper, supported by the International Food Policy Research Institute (Robinson et al. 2013), shaped the government’s and Bank Group’s climate adaptation strategies.2

The World Bank’s technical assistance supported the government’s implementation of climate resilience policies and strategies. The World Bank’s Resilient and Green Development programmatic ASA supported Ethiopia’s implementation of its Climate-Resilient Green Economy initiative and its integration into Ethiopia’s 10-year development plan (2021–30). This technical assistance also helped the government update its 2021 NDCs with ambitious mitigation and adaptation goals and develop its national land use policy.

The World Bank’s ASA helped shape Ethiopia’s social protection policy and build climate resilience. In 2013, the World Bank helped the government design and implement a strategic framework to improve the coordination and sustainability of its PSNP. Social safety nets help vulnerable communities cope with and recover from extreme weather events. The National Social Protection Policy and the National Social Protection Strategy, supported by the World Bank ASA, reduced institutional fragmentation. The strategy focused on five areas: social safety nets, livelihoods and employment, social insurance, access to services, and violence and abuse. The strategy emphasized that employment and contributory systems would increase the social safety net’s sustainability by reducing its reliance on external funding.

The World Bank’s Climate Resilience Investments

The World Bank focused its climate resilience–building efforts in three major areas: sustainable land management, improved agricultural practices and irrigation, and safety nets. Sustainable land management builds climate resilience by reducing land degradation and increasing land productivity in the face of severe droughts. Improving agricultural practices builds resilience by helping farmers, who are among the most exposed to climate change, adapt to changing climate conditions. Irrigation builds climate resilience by reducing farmers’ reliance on rain-fed subsistence agriculture and enables a more commercialized sector that is less dependent on volatile rainfall patterns. The country’s national safety net was meant to reduce the country’s reliance on emergency food aid during times of climate crises. It builds resilience by providing employment opportunities to rural populations and funding public works that make land less vulnerable to climate hazards. This section examines each of the three areas and identifies cross-cutting patterns. Box 4.1 provides an overview of the World Bank’s various efforts to help introduce early-warning systems to facilitate the country’s responses to climate emergencies.

Expanding Sustainable Land Management

Ethiopia’s vulnerability to climate change affects its large agriculture sector and puts pressure on land. Major droughts have caused a degradation of agricultural lands and the geographical shifting of areas suitable for growing crops. In fact, more than 85 percent of Ethiopian land is degraded, particularly in the country’s densely populated highlands and arid areas. Degradation hot spots cover 23 percent of the country (Gebreselassie et al. 2016). The costs of land degradation account for up to 3 percent of agricultural GDP (World Bank 2007). These climate risks have affected both staple crops (such as teff, maize, barley, and sorghum) and export crops (such as wheat, coffee, and oilseeds). Climate change has led to cultural shifts from nomadic to sedentary lifestyles, livelihood changes from pastoralism to agropastoralism, and increased competition and conflicts over land. The changes could intensify as Ethiopia’s population is set to increase from 123 million (World Bank 2024d) to almost 152.9 million by 2030 (United Nations 2024).

In response, the World Bank has dramatically expanded the geographic area in Ethiopia that is under sustainable land management. World Bank projects have helped counteract land degradation by restoring watersheds and landscapes, which also boosts land productivity. The Tana & Beles Integrated Water Resources Development project (FY08–17) strengthened water institutions and supported sustainable land management. It established a hydrologic information system to facilitate subbasin resource planning and contributed to more than 44,000 farming households adopting improved soil and water management practices, exceeding the target by 47 percent. Other projects expanded these results, focusing on enhanced climate resilience and improving livelihoods through better sustainable land management practices and conservation efforts.3 These projects have reached about 2.7 million hectares of Ethiopia’s estimated 27 million hectares of degraded land, putting them on track to meet their target of 5.2 million hectares (figure 4.2). World Bank projects have also issued land certificates to more than 4.7 million Ethiopian farmers,4 providing them with the legal standing and long-term security to further invest in sustainable land management practices and climate resilience (Adamie 2021).

Sustainable land management interventions have restored vegetation over a large share of land in the context of widespread land degradation. The geospatial analysis and impact studies show that sustainable land management practices in recently closed or ongoing projects have improved vegetation cover. The Normalized Difference Vegetation Index (NDVI) measures the areas of land with increased vegetation cover, corrected for short-term weather effects, such as prolonged dry periods (figure 4.2).5 The Ethiopia Resilient Landscapes and Livelihoods Project increased the area of land with improved NDVI by 61.5 percent from the project’s start in 2018 to 2021 in areas treated with sustainable land management practices, surpassing the 50 percent targeted increase, even after adjusting for climatic variations (World Bank 2023c). Furthermore, the Ethiopia Climate Action Through Landscape Management PforR project increased NDVI by at least 4 percent in approximately 635,000 hectares, exceeding the target of 500,000 hectares as of April 2024 (World Bank 2024g). Overall, projects have contributed to an increase in vegetation on more than 1.2 million hectares—68.3 percent of watersheds covered by the World Bank interventions.

Figure 4.2. Share of Areas of Watersheds Benefiting from the World Bank Sustainable Land Management Interventions with Increased Vegetation Cover

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Figure 4.2. Share of Areas of Watersheds Benefiting from the World Bank Sustainable Land Management Interventions with Increased Vegetation Cover

Source: World Bank Group.

IEG’s 2020 Project Performance Assessment Report of the first and second phases of the Sustainable Land Management Project found that the project contributed to increased vegetation cover and reduced degradation. Improvements were observed in 32 percent of micro-watersheds on communal land and 73 percent of those on individual land across the Amhara, Oromia, and Tigray regions (World Bank 2020c).6 Satellite data confirmed widespread land restoration and increased agricultural productivity from the Sustainable Land Management Project. Nevertheless, a 2019 evaluation of the project found no significant increases in household crop production among beneficiary households compared with a control group (Schmidt and Tadesse 2019).

Making Agriculture More Climate Resilient

The World Bank’s agricultural investments contributed to improved climate resilience over the evaluation period. AGP1 and AGP2 supported agricultural research and promoted climate-resilient technologies, including improved seed varieties, sustainable fertilizers, conservation agriculture, and crop rotation practices. Both phases introduced technologies that partly succeeded in building drought resilience, as evidenced by increased crop yields (see chapter 3) despite several droughts. This resilience helped farmers increase their productivity, incomes, and market surpluses despite the increasing pressure caused by climate change. The midterm evaluation of AGP2 identified lessons to further strengthen climate resilience, such as growing need for more seed production and the development of climate-resilient seeds for crops beyond maize (Weldesilassie et al. 2019).7

Irrigation can help build climate resilience and has been a long-standing priority for the government and the Bank Group in Ethiopia. Irrigation is a core element of the Bank Group’s strategies to improve agricultural productivity. It is also an important tool for building resilience because the predominance of rain-fed agriculture in Ethiopia exacerbates vulnerabilities to climate change (World Bank 2014). Both the CPS and the CPF included irrigation in their results frameworks as components within their larger economic and resilience-building pillars. These priorities align with Ethiopia’s development priorities. GTP I, GTP II, and the 10-year development plan identified irrigation as a key tool to transition rain-fed subsistence farming to a more commercial agriculture sector.

The complexity of larger-scale irrigation projects and limited counterpart capacity led the World Bank to focus more exclusively on smaller-scale projects. The large-scale Irrigation and Drainage Project (2007–18) aimed to improve agricultural productivity by increasing irrigation and drainage services and building the capacity of local water user groups to manage irrigation. However, the project fell short of targets, completing construction of irrigation systems on only 14 out of the 4,000 targeted hectares. The project’s complex implementation requirements and difficult hydrologic conditions challenged the local counterpart’s capacity, whereas the country’s state-centric development model hindered the emergence of public-private solutions. These difficulties led to delays, cost overruns, inadequate supervision, safeguard challenges, and ineffective M&E (World Bank 2019b). As a result, the World Bank’s subsequent support focused more exclusively on small-scale irrigation, which is less complex and less dependent on counterpart capacity. For example, AGP1 and AGP2 provided new or improved irrigation and drainage services through small-scale irrigation and micro-irrigation schemes, covering 95,000 hectares of farmland.8

Small-scale irrigation projects were unable to make a sizable difference in Ethiopia’s total irrigated land. While providing important improvements and benefits to the target communities, these projects lack the scale to meaningfully increase the 0.5 percent of Ethiopia’s 11 million irrigable hectares currently under irrigation (Berhe et al. 2022). Moreover, existing irrigation schemes continue to degrade because of inadequate maintenance, a fact that is reflected in the large share of small-scale irrigation schemes within projects that consist of the rehabilitation of existing infrastructure.

The 2022 Food Systems Resilience Project signaled the World Bank’s growing emphasis on climate resilience. The project promotes climate-smart agriculture, mostly in Ethiopia’s highlands. It adopts an integrated approach across the agriculture and water sectors, focusing on small-, medium-, and large-scale irrigation; sustainable land management practices; and responses to plant and animal pests and diseases. This component is achieved by improving monitoring systems. The ongoing project has not yet reported any outcomes.

The lack of collaboration and synergies across projects complicated the World Bank’s climate resilience measures. Those interviewed by IEG noted that operations within the same districts or ministries would have benefited from better coordination and institutional incentives to promote collaboration across Global Practices (World Bank 2022c). This notion is true for all climate resilience measures, which require leveraging synergies among the water, agriculture, and environmental sectors at the farm, watershed, and landscape levels. Collaboration and cross-sector synergy are evident in newer projects, such as the Second Ethiopia Resilient Landscapes and Livelihoods Project and the Food Systems Resilience Project, which are currently in implementation. These projects use a cross-sectoral approach to enhance resilience. However, field-level activities in older projects—such as AGP2, Ethiopia Climate Action Through Landscape Management, and the Lowlands Livelihood Resilience Project—often operate independently within different woredas. Government fragmentation made it difficult for the World Bank to achieve cross-sector collaboration.

Enhancing Social Safety Nets

Climate crises have contributed to food insecurity in Ethiopia, leading to large amounts of food aid and a national social safety net program. Ethiopia’s droughts and food shortages have garnered global attention going back to the 1970s. The response has consisted primarily of emergency aid. However, this aid is plagued by frequent delays, political disputes, and inconsistent development partner funding. As a result, the Ethiopian government, with support from the World Bank, established the PSNP as a more sustainable tool to help communities withstand climate shocks. Despite the continued emergency aid and the PSNP, about 8.6 million people still faced acute food insecurity in 2020 (IPC 2020). Furthermore, the combination of drought, conflict, and COVID-19 contributed to the expanding prevalence of undernourishment from 18.9 percent of the population in 2012 to 22.3 percent in 2021 (World Bank 2024j).

The Bank Group has convened development partner funding to support the PSNP for nearly two decades. In 2005, Ethiopia introduced the PSNP, with support from the World Bank, to replace less predictable humanitarian food assistance with a more secure funding base to help chronically food-insecure people. The World Bank supported the PSNP by channeling development partner funding through trust fund arrangements and hosting the development partner coordination team. Over the years, the PSNP has had various phases (see appendix D), continuously introducing new aspects to the program. For example, in 2009, during the second phase, the program introduced contingency budgets to provide a faster, more predictable response to food shocks, and in 2020, the government launched the Urban PSNP to expand the PSNP’s coverage to urban areas (World Bank 2013). The World Bank helped mobilize financing for the program, hosting a secretariat to coordinate development partners.

The PSNP was relevant in providing diverse services to Ethiopians facing food insecurity related to climate shocks. A 2021 review of the program found that in nondrought years, the PSNP serves an average of 8 million people in 300 food-insecure woredas (Sabates-Wheeler et al. 2021). During emergencies, the PSNP can serve an additional 5 million people through the humanitarian food assistance program.9 The PSNP primarily provides payments to beneficiaries who participate in public works for up to six months per year. These public works include infrastructure improvements and climate adaptation projects, such as soil and water conservation and rangeland management. In times of shocks, the program can extend its coverage in both reach and duration, offering support beyond six months to existing beneficiaries, assisting temporarily food-insecure households, and providing unconditional transfers to households that are unable to participate in the public works. Starting with the third phase of the PSNP in 2011, the program provides services that protect the land and agricultural livelihoods and foster employment for the most climate-vulnerable populations to build climate resilience.

The PSNP did well in targeting food-insecure populations, although coverage was inconsistent at times. The PSNP is designed to reduce food insecurity and climate vulnerability in rural areas that tend to be the poorest and least resilient parts of Ethiopia. Historically, the program focused on drought-prone areas, setting woreda quotas based on previous distributions of food aid. Now, the PSNP uses a combination of geographic and community-based targeting,10 based on food security and household wealth (Sabates-Wheeler et al. 2021). A 2020 World Bank review found that in 2016, about one-third of PSNP beneficiaries were in the poorest quintile and 60 percent of beneficiaries were in the bottom 40 percent, comparing favorably with other countries. However, regional beneficiary numbers were, at times, inconsistent with regional patterns of poverty and food insecurity (World Bank 2020a). For example, more populated regions, such as Oromia and the Southern Nations, Nationalities, and Peoples’ Region, had low beneficiary numbers compared with the size of poor or food-insecure populations, while the lowland regions of Afar and Somali had high beneficiary numbers compared with needs.

The PSNP was effective in improving food security in the highland regions but less so in the lowland regions. The average amount of time per year that PSNP beneficiary households in the highland regions suffered food shortages fell from 2.8 months to 2.6 months between 2016 and 2021, but the shortages increased from 2.3 months to 2.6 months in nonbeneficiary households. The participating households in the highland regions also reported more livestock, reduced poverty, and less of an economic impact from COVID-19. By contrast, the lowland regions did not see statistically significant improvements for the same metrics or improvements in per capita consumption or perceptions of well-being (IFPRI and IDS 2022). There was no obvious explanation for this disparity.

The PSNP also contributes to sustainable land management and reduced land degradation but less effectively than projects directly targeting sustainable land management. The PSNP provides cash to beneficiaries to carry out public works activities that rehabilitate watersheds and rangelands through terracing, planting trees, and restoring gullies. These activities reduce the risk of floods, landslides, soil erosion, and sedimentation, thereby contributing to sustainable land management. An independent study of PSNP sites showed that these cash-for-work soil protection efforts sequester soil carbon, with average carbon stocks for project sites exceeding those of nonproject sites by 84 percent (Solomon et al. 2015). In 2016, slightly more than 7 percent of the Ethiopian population was covered by the PSNP’s public works, which was higher than in most other countries with similar programs. An IEG case study of eight micro-watersheds showed a lower performance compared with the Sustainable Land Management Project. The primary issues identified included the low quality of implementation and choice of technology.

The complexity of Ethiopia’s food security programs has introduced coordination challenges. Ethiopia’s Ministry of Agriculture has implemented both the PSNP and humanitarian food assistance since the program’s inception in 2005. In 2015, the government established the Disaster Risk Management Commission to take over managing humanitarian food assistance while the Food Security Coordination Office under the Ministry of Agriculture has managed the PSNP. In addition, the Ministry of Labor and Social Affairs implements certain PSNP and Urban PSNP components, the Ministry of Women and Social Affairs oversees direct support and nutrition, and subnational entities implement the program at the local level. This implementation structure has led to parallel systems between institutions and inefficiencies and gaps in coverage (World Bank 2023b). Joint implementation arrangements overseen by the Food Security Coordination Office have helped the PSNP overcome some of these challenges, but the PSNP’s fragmented structure constrains its ability to offer uniform service standards. However, as efforts stalled, the government paused consolidation in 2022.11

The PSNP was marked by delays in responding to non-climate-related shocks, particularly during the conflict and economic crisis period. The Tigray conflict forced the PSNP to suspend operations in that region in June 2021 after initial attempts to maintain programming. This pause led the program to suspend payments to an additional 335,000 households in the neighboring conflict-affected Afar and Amhara regions from July to December 2021. Mitigation measures, such as the use of electronic payment to improve the portability of benefits, were rolled out slowly and with low regional coverage (Lind et al. 2024). Moreover, funding shortages in the PSNP’s fifth phase meant the program could not expand or meet additional humanitarian needs caused by the shock. In early 2023, the government agreed to transfer the program’s implementation to the World Food Programme. However, widespread food theft during the World Food Programme’s implementation, known as the food diversion scandal, led to an additional suspension of the program from May 2023 through November 2023. Overall, these conflict-related challenges and the onset of COVID-19 disrupted disbursements, and the share of beneficiaries receiving payments in the agreed time frame dropped well below its target (World Bank 2024h).

The PSNP lacked a clear strategy to graduate beneficiaries away from program support. The program repeatedly used additional financing, with new stages introduced every 4 years. These stages included only two major changes to support graduation in the nearly 20 years of the project’s operation. The third phase of the PSNP introduced a household asset-building program in 2011, and the fourth phase of the PSNP included livelihood support in 2015. These changes did not resolve the issue of beneficiaries not graduating, with less than 1 percent of beneficiaries adopting new livelihoods because of the program (IFPRI and IDS 2022). A study found that the Urban PSNP improved household incomes and savings and created positive social outcomes but did not improve household assets (Wieser et al. 2021). In addition, the program’s public works component reduced the time that beneficiaries could dedicate to other types of work—that is, the program did not increase the total labor supply. Consequently, the evaluation by the International Food Policy Research Institute and the Institute of Development Studies found that “virtually no graduation has taken place since the midline survey in 2018” (IFPRI and IDS 2022, 25). The only large-scale graduation occurred at the end of the third phase in 2015, when 2.5 million beneficiaries graduated (World Bank 2020b). However, this larger graduation was because of funding shortages and a concern by the government that the program was creating a dependency mentality (Sabates-Wheeler et al. 2021). There was no evidence that the graduation was caused by any substantive improvement in beneficiaries’ conditions.

During the evaluation period, the program had no long-term plan for sustainability, but since then the government has announced plans to increase funding. The PSNP relied on grant financing from the international community, which put its sustainability at risk. For example, in 2015, the lack of committed future funds led to a mass graduation at the end of the third phase (Sabates-Wheeler et al. 2021). At the same time, the frequency of severe climate events is increasing, which further raises the PSNP’s funding requirements. Budget constraints since 2021 have limited the program’s ability to respond to shocks. The recent government commitment to provide longer-term funding has the potential to address these issues but will rely on sustained tax revenue mobilization—and broader growth—to be sustainable (IMF 2025).