The United Nations Capital Development Fund (UNCDF) was established in 1966 by the General Assembly of the United Nations to provide small scale grant capital assistance to developing countries, under the administration of the United Nations Development Programme (UNDP).

UNCDF's activities are organised around four themes: Micro-Credit, Eco-Development, Local Development Funds and Larger Infrastructure. UNCDF is dedicated to promoting development in rural areas of the least developed countries (LDCs), through collaborative ventures with local authorities, community-based organisations and the private sector. Activities include providing electricity to rural areas, irrigation, sanitation and clean water, health centres, schools, and roads and bridges to improve access to markets and services.

NEW PROGRAMME STRATEGY

The new programme approach focuses on well defined geographical areas, where the need for capital investment is supported by the potential for the Fund's relatively modest resources to have significant economic and social impact. The Fund's energies and resources now concentrate on mutually reinforcing investments within programmes that involve financing of infrastructure, eco-development or local development activities and credit facilities, selected in participation with the beneficiary communities themselves. UNCDF programmes are designed to reduce poverty and improve the livelihoods of the local population while at the same time helping to preserve and protect the environment.

UNCDF PROJECTS IN ETHIOPIA

UNCDF has been active in Ethiopia since 1982. The Fund is currently assisting a low-cost housing project located at Lafto, a southern suburb of Addis Ababa. Beneficiaries of this project, for which the UNCDF contribution amounts to US $5.3 million are organised in housing cooperatives and are building their own houses through self-help and subsidised credit. The project originally sought to build 1,500 houses, an objective that has almost been reached.

In another project, valued at US $3.8 million, UNCDF procured modern machinery and equipment for repair and maintenance of water supply schemes and pumps in Ethiopia. Two mechanical workshops are nearing completion in Kality (situated in the southern part of Addis Ababa) where field maintenance will be managed and major repairs will be carried out through the project. These facilities are expected to strengthen national and regional capacity in the maintenance of water supply schemes, a critical and often neglected aspect of the water sector.

In addition to these two important projects, UNCDF has recently identified the North Gondar zone in the Amhara Region as its primary area of focus for the next five years. North Gondar has greatly suffered from the civil war and suffers from recurrent food deficits. Yet, few donors or Non-Governmental Organisations presently are investing in the area. The selection of this zone is in line with the priority given by the Government of Ethiopia to target drought and war affected areas. It also carries forward the Ethiopian government's desire to decentralise authority for the provision of a variety of services to the local level.

The overall objective of the North Gondar zone programme is to improve the material and social living conditions among the rural poor, by promoting sustainable human development through investments in the transport, agriculture, bio-diversity, health, education and water sectors. It will build technical and managerial capacity at the appropriate level for activities along these lines to be undertaken by the different levels of government, in interaction with communities and associations in the area.

With the help of the Councils of the Amhara Region and North Gondar zone, three projects have been identified in the zone, with a total funding requirement of US $7.5 million for a first phase of two years.

Woreda Development Fund (WDF)

The Woreda Development Fund will finance small infrastructure development like schools, clinics, spring development, mule tracks, improved markets, flour mills, and small scale irrigation at the woreda and kebele level. Together with their constituents, woreda and kebele administrations will identify "micro-projects" to be financed by the fund. These will be vetted for their technical aspects, including the ability to operate and maintain new facilities in the long run. To ensure community commitment, projects will only be approved in communities which agree to contribute to them, either in cash or, more often, in kind, through labour or material.

The Simien Mountains National Park Resource Conservation/Agro-Forestry Project

The second project of the North Gondar zone programme will deal with agro-forestry and soil conservation around the Simien Mountains National Park (SNMP). In 1978, UNESCO listed the park as a World Heritage Site. It features a spectacular escarpment that is the prime habitat for the endangered Walya Ibex. The Simien Fox, another species found exclusively in Ethiopia, is nearly extinct. The region's inhabitants are dependent on farming and husbandry, which causes competition for natural resources with the park management. The focus of the UNCDF project is to help the 10,000 farmers living around the park to improve sustainable agricultural, herding and wood consumption practices so that they do not deplete park resources through poaching and illegal timber harvesting. Activities will include soil and water conservation, agro-forestry and diversification of agriculture.

Rural Roads Project in North Gondar Zone

To complement the other two investments and address the geographic isolation and food deficiency of the area, particularly the Janamora woreda, UNCDF will fund a road link connecting the woreda with the national road network. Because of the need to avoid potential negative environmental impacts, the road will require careful siting, for which discussions are currently in process.