Forecasted rains are expected to worsen the situation, with more than 1.2 million individuals at risk of cholera.
The project is part of the Horn of Africa Gateway Development project.
US Assistant Secretary of State for African Affairs Molly Phee and Horn of Africa Special Envoy Mike Hammer emphasised the importance of Somaliland's status being determined by the Somali people, not external actors.
The funds will cushion Northern counties against the risks of drought, and facilitate livestock trade as well as the stablishment of slaughterhouses for meat production and processing.
These countries have been grappling with severe humanitarian crises exacerbated by a combination of factors including drought over the past three years and global spikes in food and energy prices.
In his comments on the situation thus far, Redwan explained that "the signed MoU with Somaliland is a deal for cooperation and partnership that grants Ethiopia access to sea on business terms".
Five arid and semi-arid counties, namely Turkana, Marsabit, Mandera, Wajir, and Garissa, are set to benefit from the Horn of Africa Ground Water for Resilience Programme (HoAGW4RP) funded by the World Bank.
The institute on Sunday concluded a two-day conference in Nairobi, which focused on addressing ongoing conflicts in the Horn of Africa and other East African regions.