COVID-19 Supplemental Financing to the Second Ethiopia Growth and Competitiveness Programmatic Development Policy Financing

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The operation provides US250 million dollars in supplemental financing for the Second Ethiopia Growth and Competitiveness Programmatic Development Policy Financing (DPF2; P169079) to help the Government of Ethiopia (GoE) cover an unanticipated financing gap that has opened due to the impact of the coronavirus disease (COVID-19) outbreak. DPF2, approved by the World Bank Board on March 19, 2020, was the second operation in a series that aims to boost economic transformation by increasing private sector participation and promoting good governance practices, including moving toward a sustainable financing model for Ethiopia’s development. DPF2 has provided critical support to advancing the reforms announced in September 2019 under Ethiopia’s Homegrown Reform Agenda. The supplemental financing in the form of a development policy credit of SDR 91.5 million (US125 million dollars equivalent) and a development policy grant of SDR 91.5 million (US125 million dollars equivalent) and will be financed from cancellation and restructuring of ongoing IDA18 projects. The operation aims to mitigate the impact of the ongoing COVID-19 crisis on the Government agenda, including the possibility of reversals in supported reforms. The pandemic is resulting in disruptions in government operations and coordination as well as having a large impact on the Ethiopian economy, threatening the attainment of the development policy objective of this series and the country development goals. The GoE has adopted public measures to contain the pandemic and treat cases. Anticipating the exponential surge in the number of cases experienced in other countries, the Government has taken swift measures to contain the spread of the pandemic in the Ethiopian territory. Since March, authorities have implemented surveillance at borders and conducted contact tracing; established designated quarantine facilities in each region and new temporary isolation rooms in selected hospitals; disseminated health education materials across the country and conducted a door-to-door communication effort in Addis Ababa; and ensured the supply of drugs and protective equipment for case management and infection prevention, as well as laboratory equipment, reagents, and consumable supplies. To help contain the spread of the virus, a State of Emergency was declared on April 8, introducing measures such as a nationwide ban on gatherings of more than four people, making the wearing of masks compulsory while in public, and regulating the operation of transportation services, hotels, and restaurants under reduced capacity.