Ethiopia Joins Global Islamic Climate Finance Alliance as Founding Member

The National Bank of Ethiopia has officially joined the Global Islamic Climate Finance Alliance as a founding member, aiming to diversify funding channels for green development and expand domestic financial inclusion. This move was announced during the official launch of the Alliance on November 14, 2026, on the sidelines of the 31st United Nations Climate Change Conference in Antalya, Türkiye. The alliance is chaired by UN Special Envoy Mahmoud Mohieldin and convened by Mohamed Anouar Gadhoum.

Ethiopia's membership in the alliance comes amid an acute climate financing deficit. According to the United Nations Development Programme, the country receives roughly $2.6 billion annually in climate finance, largely from external public sources, against an estimated need of $10.6 billion per year. Closing this $8 billion gap is critical, as the World Bank and UNDP warn that unmitigated droughts and floods could reduce Ethiopia's annual GDP by up to 5 percent over the next two decades.

Joining the Global Islamic Climate Finance Alliance will enable Ethiopia to deploy Sharia-compliant instruments, such as green Sukuk, to mobilize private and social capital for renewable energy, sustainable infrastructure, and climate adaptation. Sovereign Sukuk programs have already demonstrated strong results across Africa, notably in Nigeria, where they have successfully financed major road infrastructure. Green Sukuk adapts this model specifically for environmental and clean-energy projects.

The central bank views the initiative as a vital tool for domestic financial inclusion. Expanding interest-free banking and investment products offers a formal financial pathway for millions of unbanked Ethiopians who avoid conventional banking due to religious or cultural beliefs. Sector analysts note that securing founding-member status gives Ethiopia an early voice in shaping global standards for Islamic climate finance.

The Global Islamic Climate Finance Alliance aims to bridge the Islamic finance sector with mainstream climate funding by engaging institutions such as the Islamic Development Bank and the Green Climate Fund. This strategic move is expected to provide Ethiopia with access to new funding sources and expertise in Islamic finance. The alliance is set to play a crucial role in supporting the country's efforts to address climate change.

Ethiopia's proactive integration into international green finance networks positions the country to lead regional climate diplomacy and set a precedent for other African nations seeking innovative ways to fund sustainable growth. As Ethiopia prepares to host COP32, its membership in the alliance is expected to enhance its reputation as a leader in climate action and sustainable development.

The National Bank of Ethiopia's membership in the Global Islamic Climate Finance Alliance is a significant step towards achieving the country's climate and development goals. With the support of the alliance, Ethiopia is poised to make significant progress in mobilizing climate finance and promoting sustainable development. The country's experience with Islamic finance is expected to serve as a model for other nations in the region.

Key points

• Ethiopia joins Global Islamic Climate Finance Alliance to boost green development and financial inclusion.
• The country aims to mobilize $8 billion in climate finance to address the annual deficit.
• Membership in the alliance enables Ethiopia to deploy Sharia-compliant instruments, such as green Sukuk.