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26 June 2015

Climate finance and water security

Bangladesh case study

Matthew Savage, Ana Mujica, Federica Chiappe and Ian Ross

Climate Finance and Water Security: Bangladesh Case Study

This assessment is being carried out by Oxford Policy Management . The team leader is Federica Chiappe and the project manager is Ana Mujica. The remaining team members are Ian Ross and Matthew Savage. For further information, please contact Ana Mujica at [email protected].

The contact point for the client is Louise Whiting at [email protected]. The OPM project number is 8416.

Oxford Policy Management Limited 6 St Aldates Courtyard Tel +44 (0) 1865 207 300

38 St Aldates Fax +44 (0) 1865 207 301 Oxford OX1 1BN Email [email protected]

Registered in England: 3122495 United Kingdom Website www.opml.co.uk

© Oxford Policy Management i

Acknowledgements

This study was commissioned by WaterAid. We would like to thank Dr Mohammod Kabir and

colleagues at WaterAid Bangladesh, Mr Abul Basher, and all key informants for their support and

contributions to this study.

The views expressed do not necessarily reflect WaterAid’s official policies. The authors are solely

responsible for the content of this document.

For more information about OPM, please visit www.opml.co.uk.

mailto:[email protected]

mailto:[email protected]

http://www.opml.co.uk/


© Oxford Policy Management 1

Table of contents

Acknowledgements i

List of tables and figures 2

List of abbreviations 3

1 Introduction 6

2 Water security and climate change 7

2.1 Water security 7

2.2 Observed and projected climate trends 9

2.3 The water security and climate change nexus 11

3 Climate finance 13

3.1 Climate policy architecture 13

3.1.1 National Adaptation Programme of Action (2005, 2009) 13 3.1.2 Bangladesh Climate Change Strategy and Action Plan (2009) 13 3.1.3 Effectiveness of policy architecture 14

3.2 Climate finance architecture 14

3.2.1 Bangladesh Climate Change Trust Fund 15 3.2.2 Bangladesh Climate Change Resilience Fund 15 3.2.3 Pilot Programme for Climate Resilience 16 3.2.4 Effectiveness of financial architecture 16 3.2.5 Going forward 16

3.3 Climate finance to date 17

4 Climate finance for water security 20

4.1 Water supply and sanitation activities 21

4.1.1 The Khulna Water Supply Project 21 4.1.2 The Coastal Towns Infrastructure Improvement Project 23 4.1.3 The Programme for the Improvement of Capabilities to Cope with Natural

Disasters Caused by Climate Change 24

4.2 Future scope for water projects 24

5 Conclusions and policy recommendations 26

5.1 Conclusions 26

5.2 Recommendations 26

References 28

Annex A List of CFU projects and categorisation 30

Annex B List of stakeholders consulted 32

Annex C Summary of key stakeholder interviews 33

Annex D Summary of follow-up interviews 46



List of tables and figures

Table 1 National water security index............................................................................................. 9 Table 2 Climate change impacts in Bangladesh .......................................................................... 11 Table 3 Projected climate change effects in drought-prone areas .............................................. 12 Table 4 Distribution of climate finance by funder ......................................................................... 18 Table 5 Distribution of climate finance by project categories ....................................................... 21

Figure 1 Trends in water coverage by area (1990, 2000 and 2012) ............................................... 8 Figure 2 Trends in sanitation coverage by area (1990, 2000 and 2012) ........................................ 8 Figure 3 Changes in average annual temperature and precipitation by 2050 (A2 scenario) ....... 10 Figure 4 Distribution of climate finance by focus ........................................................................... 18 Figure 5 Distribution of climate finance by type of instrument....................................................... 19



List of abbreviations

ADB Asian Development Bank

BCCSAP Bangladesh Climate Change Strategy and Action Plan

BCCRF Bangladesh Climate Change Resilience Fund

BCCTF Bangladesh Climate Change Trust Fund

BFP-B Business Finance for the Poor in Bangladesh Programme

BIDS Bangladesh Institute for Development Studies

BWDB Bangladesh Water Development Board

CDMP Comprehensive Disaster Management Programme

CFF Climate Fiscal Framework

CFU Climate Funds Update

CIF Climate Investment Funds

CPEIR Climate Public Expenditure and Institutional Review

DFID UK Department for International Development

DRM Disaster Risk Management

DHS Demographic and Health Survey

DPHE Department of Public Health Engineering

ERD Economic Relations Division

FSF Fast Start Finance

GCCA Global Climate Change Alliance

GCF Green Climate Fund

GEF Global Environment Facility

GIZ German Federal Enterprise for International Cooperation

IBRD International Bank for Reconstruction and Development

IDA International Development Association

IWRM Integrated Water Resources Management

IFC International Finance Corporation

IIED International Institute for Environment and Development

IPCC Intergovernmental Panel on Climate Change



JICA Japan International Cooperation Agency

JMP WHO / UNICEF Joint Monitoring Programme

KWASA Khulna Water Supply and Sewerage Authority

LDCF Least Developed Countries Fund

MoEF Ministry of Environment and Forests

MoF Ministry of Finance

MWR Ministry of Water Resources

NAP National Adaptation Plan

NAPA National Adaptation Programme of Action

NCC, B Network on Climate Change in Bangladesh

NDA National Designated Authority

NGO Non-Governmental Organisation

NIE National Implementation Entity

NPP National Perspectives Plan

NSDS National Sustainable Development Strategy

OECD CRS Organisation for Economic Development and Cooperation – Creditor Reporting System

OECD DAC Organisation for Economic Development and Cooperation – Development Assistance Committee

OPM Oxford Policy Management

PKSF Palli Karma-Sahayak Foundation

PPCR Pilot Program for Climate Resilience

PPP Public-Private Partnership

REDD+ Reducing Emissions from Deforestation and Forest Degradation

SLR Sea Level Rise

SPCR Strategic Programme for Climate Resilience

UK United Kingdom

UNDP United Nations Development Programme

UNICEF United Nations Children’s Fund

US United States



WARPO Water Resources Planning Organisation

WASH Water, Hygiene and Sanitation

WHO World Health Organisation



1 Introduction

This Bangladesh case study has been developed for the project ‘Research on climate finance and

water security’, funded by WaterAid. The project aims to identify the type and scale of national and

sub-national programmes and projects that have been funded by climate finance and how they relate

to local water security.

The methodology and definitions used are fully explained in the Inception Report and so are not

repeated in this assessment, but are referenced where appropriate. This report is based on:

1. A review of secondary literature;

2. Key informant interviews with water and climate change stakeholders in Bangladesh; and

3. Project-level data from the Climate Finance Update (CFU) and the OECD Creditor Reporting

System (CRS).

The Bangladesh case study is structured as follows:

Section 2 reviews the evidence base on water security and climate change for Bangladesh,

and explores the nexus between the two thematic areas;

Section 3 reviews policy and institutional frameworks for climate finance in Bangladesh, and

sets out an analysis of the reported climate finance funds flowing from international donors

(as reported in the Climate Funds Update database);

Section 4 sets out an analysis of the identified climate finance flows categorised in terms of

their relevance to a hierarchy of water security issues;

Section 5 presents the conclusions and recommendations.

The Annexes contain the complete list of climate finance projects for Bangladesh, together with a

list of all stakeholders interviewed. A total of 11 key stakeholders, including donors, government

parties and national climate change agencies, were interviewed. Summary notes for these KIIs can

also be found in the Annexes. Fieldwork was undertaken by Federica Chiappe of OPM and Abul

Basher of the Bangladesh Institute of Development Studies (BIDS) in February 2015.



2 Water security and climate change

2.1 Water security

Bangladesh is located within the floodplains of three major rivers: the Ganges, Brahmaputra and

Meghna, as well as their tributaries. Around 7% of the total surface area of the country is covered

with rivers or other surface water bodies. Nonetheless, there is great variability in the availability of

water resources throughout the year, especially between the monsoon (June – September) and dry

seasons, with 80% of rainfall occurring during the former (Frenken, 2012). Floods, droughts and

cyclones are also key determinants of the availability of water in the country.

Estimates suggest that around 88% of total water withdrawal is used for agriculture, followed by

household consumption (10%) and industrial use (2%) (Ibid, 2012). Although agriculture relies

heavily on surface water, it has become increasingly dependent on groundwater resources due to

the high variability of surface water availability. Indeed, in 2008 around 79% of total water withdrawal

came from groundwater resources, with the remaining 21% originating from surface water.

The increased demand for groundwater has led to its over-abstraction, which has been associated

with lowering water tables, water pollution, saltwater intrusion in coastal areas, and land subsidence.

There is also evidence of groundwater depletion, especially around the Dhaka metropolitan area and

in the northwest region of the country. Chemical water quality is also an issue, with iron and arsenic

concentrations in certain areas being beyond the limits of the safe water quality standards of the

World Health Organisation (WHO). Indeed, 1.4 million tubewells have been found to be affected by

arsenic contamination, exposing around 30 million people to arsenic toxicity (Ibid, 2012).

Regarding household consumption, Joint Monitoring Programme (JMP) data show that improved

water supply and sanitation coverage have increased steadily since 1990. By 2012, the majority of

people in Bangladesh used either piped water (10%) or other improved water sources (75%), with

the remaining 15% relying on unimproved sources. The 2011 Demographic and Health survey (DHS)

shows that the majority of households (in both urban and rural areas) used tubewells or boreholes,

suggesting a high dependence on groundwater resources for drinking, as described above. By 2012,

no households relied on surface water for drinking – this holds for both urban and rural areas (Figure

1).

Similar achievements have also been observed in sanitation: access to shared or improved services

increased from 50% in 1990 to 85% in 2012 (Figure 2). Progress has been mainly driven by

achievements in rural areas: in 1990, only 45% of the rural population had an improved or shared

sanitation facility, while 86% did so in 2012. This has implied a reduction in the practice of open

defecation in rural areas from 40% to 3% within the same time period. Although progress in urban

areas has been less significant, open defecation was no longer practiced in cities in 2012, decreasing

from a rate of 10% in 1990.



Figure 1 Trends in water coverage by area (1990, 2000 and 2012)

Source: WHO / UNICEF JMP (2014).

Figure 2 Trends in sanitation coverage by area (1990, 2000 and 2012)

Source: WHO / UNICEF JMP (2014).

Considering all water security dimensions (household water; water for agriculture, industry and

energy; urban water; environmental water, and resilience to water-related disasters), Bangladesh

fairs quite poorly, scoring a 1.4 out of 5 in the ‘national water security index’ of the Asian Development

Bank (ADB, 2013) (Table 1). In particular, Bangladesh has the lowest ‘urban water security’ among

0%

20%

40%

60%

80%

100%

1990 2000 2012

Urban

0%

20%

40%

60%

80%

100%

1990 2000 2012

Rural

Other unimprovedSurface waterOther improvedPiped on premises

0%

20%

40%

60%

80%

100%

1990 2000 2012

Total

0%

20%

40%

60%

80%

100%

1990 2000 2012

Urban

0%

20%

40%

60%

80%

100%

1990 2000 2012

Rural

Open defecationOther unimprovedSharedImproved

0%

20%

40%

60%

80%

100%

1990 2000 2012

Total



the countries assessed, having very poor access to safe piped water and inadequate wastewater

treatment and drainage systems. ADB also highlights the country’s high levels of surface water

pollution and the lack of coping mechanisms to deal with water-related hazards, especially in coastal

areas.

Table 1 National water security index

Dimensions of water security Score (out of 5)

Household water security index (access to safe piped water,

sanitation access, hygiene) 1

Economic water security index (agriculture, industry, energy) 3

Urban water security index (piped water access, waste water

treatment, flood damage) 1

Environmental water security index (river health, watershed,

infrastructure, ecosystems) 1

Resilience to water-related disasters index 1

Average score 1.4

Source: ADB (2013).

2.2 Observed and projected climate trends

Observed climate trends

Bangladesh has a tropical monsoon climate with significant variations in temperature and rainfall

across the country. Broadly, there are four main seasons:

1. Pre-monsoon, from March to May;

2. Monsoon, from June to September;

3. Post-monsoon, from October to November; and

4. Dry season, from December to February.

The mean annual temperature is 25°C, ranging from 18°C in January to 30°C between April and

May, and with extremes as low as 4°C and as high as 43°C. The Northern and Western regions of

the country tend to be hotter in the summer and colder in the winter. Mean annual rainfall is 2,200mm,

of which about 80% falls during the monsoon months. The Northern and Western regions also

experience lower rainfall as compared to other areas of the country (MoEF, 2012).

Estimates suggest that between 1948 and 2008, Bangladesh experienced an increase in the

minimum temperature by 0.5°C during both dry and monsoon seasons, while maximum

temperatures increased during pre- and post-monsoon seasons by 0.9°C and 0.4°C respectively.

Mean annual rainfall during the same period was estimated at 2.347mm, ranging between 1,640 and

2,831mm (Ibid, 2012).

Projected climate trends

MoEF (2012) suggests that mean annual temperature is expected to rise by around 1°C by 2030

and 2°C by 2050. Mean annual rainfall is also expected to increase by a maximum of 2% by 2030

and by 2 – 4% by 2050. Expected changes in rainfall vary significantly with seasons, with estimations

indicating a decrease during the dry season and an increase during monsoon months. Projected

trends further suggest that there will be heavier rainfall in coastal areas, but there is no clear pattern



across seasons, except for post-monsoon months were rainfall is likely to increase (Frenken, 2012;

MoEF, 2012).

Figure 3 shows the changes in average temperature and precipitation by 2050 under an A2

emissions scenario1. On average, by 2050, mean annual temperature is expected to increase by

1.3°C, while mean annual precipitation is projected to increase by 8%. As explained by MoEF (2012),

although these changes appear relatively small, given climate variability and the likelihood of natural

disasters, they are expected to lead to an increase in both the magnitude and frequency of floods,

droughts and cyclones.

Figure 3 Changes in average annual temperature and precipitation by 2050 (A2 scenario)

Source: MoEF (2012).

Climate change effects

Bangladesh is particularly vulnerable to coastal hazards and future sea level rise (SLR), given its

large extensions of low-lying coastal areas. SLR projections indicate that the sea level may rise

between 5.1 and 7.4mm per year by 2050, with inundated areas increasing by 14%2 (MoEF, 2012).

Overall, an increase in extreme weather-related events such as floods, heavy rains, cyclones and

storm surges is expected. Indeed, in drought-prone areas in the Northwest region of the country,

Ramamasy & Bass (2007) predict higher temperatures in the dry season, which will be accompanied

by reduced soil moisture and increased water scarcity. This area is also likely to experience

increased rainfall variability during the monsoon months and intermittent dry spells.

1 An A2 emissions scenario is characterised by independently operating nations, increasing population and regionally-oriented economic development. For further information, please refer to http://www.ipcc.ch/ipccreports/sres/emission/ index.php?idp=94. 2 Estimations for the proportion of inundated areas rely heavily on rainfall assumptions, which makes them less reliable.

http://www.ipcc.ch/ipccreports/sres/emission/%20index.php?idp=94

http://www.ipcc.ch/ipccreports/sres/emission/%20index.php?idp=94



Table 2 summarises some of the main climate change impacts expected up to 2050.

Table 2 Climate change impacts in Bangladesh

Sector Climate change effects

Water

Western regions will be at greater risk of drought, with drought

severity increasing with increasing temperatures.

Flooded areas will increase by 6% by 2030 and 14% by 2050.

Cyclone and storm surge affected areas will increase, putting at

risk the lives of 38 million people by 2050.

Coastal areas will face salinity intrusion and freshwater scarcity

during the dry season, which will be worse with SLR.

Erosion of riverbanks will worsen.

Agriculture Decrease in crop yields and increased crop damage associated

with floods.

Fisheries Capture fish production may increase in floodplain fisheries while

freshwater habitats may be negatively affected.

Health

Spatial distribution of vectors may be altered, increasing the

incidence of malaria. The incidence of cholera and diarrhoeal

disease may also increase, especially if floods become more

frequent.

Source: Authors based on MoEF (2012).

2.3 The water security and climate change nexus

The IPCC 5th Assessment suggests that water scarcity is likely to be a major issue for Asia, with

climate change compounding the effects of population growth, rapid urbanisation, industrialisation

and economic growth. Sea level rise driven by climate change poses an important risk for the region,

increasing the likelihood of coastal flooding, erosion and saltwater intrusion in coastal areas, as is

the case of Bangladesh. Indeed, by the 2070s, Dhaka will be among the top Asian cities with

population exposed to coastal flooding (Hijioka et al, 2014).

MoEF (2012) also anticipates an increase in the risk of drought and drought severity in the Western

regions, as well as an increase in the number of areas affected by freshwater scarcity and water-

related disasters during the dry season (Table 2). Furthermore, Table 3 shows some of the projected

effects of climate change in drought-prone areas in Northwest Bangladesh. These areas are

characterised by highly variable rainfall, low moisture retention capacity, and a high dependency on

surface water resources (Ramamasy & Bass, 2007). There is a very high level of confidence in the

occurrence of changes in extreme temperatures, reduced soil moisture, and increased water scarcity

in the dry season.



Table 3 Projected climate change effects in drought-prone areas

Level of confidence Effects

Very high

High temperature in winter and changes in extreme temperature

Reduced soil moisture in the dry season

Increased drought and water scarcity in the dry season

High

Increased monsoon rainfall variability

Increased potential evapotranspiration

Intermittent dry spells

Medium to high Increased risk of extreme rainfall event during the monsoon season

Change in the beginning of rainfall

Moderate Change in stream flow

Declining surface water availability

Low Abrupt change in average monsoon season rainfall

Source: Ramamasy & Bass (2007).

Besides the effects of climate change described in Table 3, the Network on Climate Change in

Bangladesh (NCC, B) also highlights a potential scarcity of safe drinking water in drought-prone

areas, and more generally, across the coastal belt. Likewise, both the Business Finance for the Poor

in Bangladesh Programme (BFP-B) and WaterAid Bangladesh anticipate problems with the quality

of drinking water due to increased salinity intrusion, groundwater depletion and surface water

contamination. Vulnerability to floods and river erosion are also key concerns.



3 Climate finance

3.1 Climate policy architecture

From an institutional perspective, climate and environmental policy is managed through the Ministry

of Environment and Forests (MoEF). The Five Year Plan initiated by the Planning Commission

activated the National Environmental Council, which is a cross-sector body headed by MoEF.

A 2010 – 2021 National Sustainable Development Strategy (NSDS) and National Perspectives Plan

(NPP) bring together many climate-relevant development aspects. The NSDS has identified five

strategic priority areas along with three cross-cutting areas, with a view to achieving its stated vision

(see NSDS, 2013). These strategic areas are:

1. Sustained economic growth;

2. Development of priority sectors (agriculture and rural development, industry, energy,

transport and human resources development);

3. Urban environment (urban housing, management of urban slums, water supply and

sanitation, pollution management, urban transport and urban risk reduction);

4. Social security and protection; and

5. Environment, natural resources and disaster management (water resources; forestry and

bio-diversity; land and soil; coastal and marine resources; natural disasters, and climate

change).

Likewise, the three cross-cutting themes are good governance, gender, and disaster risk reduction

and climate change.

3.1.1 National Adaptation Programme of Action (2005, 2009)

From a mainstreaming perspective, Bangladesh has historically included climate considerations into

its sector plans (including the National Water Management Plan), and these efforts have been

consolidated into the National Adaptation Programme of Action (2005, 2009). The National

Adaptation Programme of Action (NAPA) explores the vulnerability of Bangladesh to climate change

and disaster risk. Prepared in 2005 with 15 projects, it was updated in 2009 to include 45

programmes. Among other priorities, the NAPA emphasises the need to develop a comprehensive

strategy for safe drinking water supply in coastal areas. One water supply and sanitation project was

prioritised within the NAPA – ‘Providing drinking water to coastal communities to combat enhanced

salinity due to sea level rise’.

3.1.2 Bangladesh Climate Change Strategy and Action Plan (2009)

More recently, the Bangladesh Climate Change Strategy and Action Plan (BCCSAP), launched in

2009, identifies three main climate hazards – tropical cyclones / storm surges, inland flooding, and

droughts. The strategy contains 44 programs formulated around six key themes: (i) food security,

social protection and health; (ii) comprehensive disaster management, (iii) infrastructure; (iv)

research and knowledge management; (v) mitigation and low carbon development, and (vi) capacity

building and institutional strengthening. The majority are focused wholly or partially on adaptation,

and are heavily oriented towards vulnerable communities. Examples of activities include developing

early warning systems, improving climate modelling capacity, developing biodiversity monitoring,



and disaster forecasting. Specific initiatives are included on health, community adaptation and social

safety nets. The plan was estimated to require US $500 million in the first two years, and then

approximately US $5 billion for the first five years of implementation.

The BCCSAP does include priorities on water and sanitation by listing ‘implement drinking water and

sanitation programmes in areas at risk from climate change (e.g. coastal areas, flood and drought

prone areas),’ in the fourth objective under the first theme and consequently incorporating a single

programme: ‘Water and sanitation programme for climate vulnerable areas (T1P7)’. The latter

encompasses two actions: (A1) ‘Monitor changes in water quality and quantity available for drinking

and forecast future changes due to climate change’; and (A2) ‘Plan for and invest in additional water

supply and sanitation facilities’ (MoEF, 2009, p. 39; M. R. Bijoy, personal communication, 5 February

2015). Water-related activities are also predominant under the infrastructure theme, with objectives

oriented towards the repair and maintenance of structures for the prevention of water-related

disasters and the improvement of drainage systems in urban areas (Ibid, 2009, p. 32).

3.1.3 Effectiveness of policy architecture

There has been little formal assessment of the effectiveness of climate policy in Bangladesh. Among

respondents, it was generally accepted that the NAPA was more a list of projects than an overarching

climate adaptation strategy, with the National Adaptation Plan (NAP) still under preparation.

The BCCSAP provided the basis for the development of the two national climate funds (see below),

and it is primarily through these that policy has been enabled. The BCCSAP is pro-poor in nature,

but has been criticised for being too top-down and as lacking sufficient detail on implementation

(Rabbani & Bijoy, 2013). From a water sector perspective, the Ministry of Water Resources (MWR)

has received nearly half of the allocated funds, which have been implemented through more than 60

projects managed by the Bangladesh Water Development Board (BWDB), but these have been

primarily oriented towards infrastructure activities rather than adaptation (Ibid, 2013). The BCCSAP

has also overlooked specific needs to develop short- and long-term strategies for alternative sources

of safe drinking in vulnerable areas (M. R. Bijoy, personal communication, 5 February 2015).

A report by IIED (2014) further indicates that climate finance is poorly integrated into the mainstream

development planning process (i.e., Annual Development Programme) managed by the Planning

Commission, and that the climate programme is managed in parallel through the specific climate

funds and the Ministry of Finance (MoF). This limits the potential for mainstreaming climate into the

development agenda, and further integration could be considered. It should be noted that the policy

framework in Bangladesh has been reviewed by the Green Climate Fund (GCF) as part of the

accreditation process and is regarded as sufficiently robust for direct access arrangements.

3.2 Climate finance architecture

The policy frameworks described above support a number of financing structures, including two

dedicated climate change funds. The first of these is the Bangladesh Climate Change Trust Fund

(BCCTF), managed directly by the Government of Bangladesh. The second is the internationally-

funded Bangladesh Climate Change Resilience Fund (BCCRF), managed by the World Bank.

However, the effectiveness of both has been questioned by stakeholders. In addition, Bangladesh

has accessed Global Environment Facility (GEF) funds for climate change, including the Least

Developed Countries Fund (LDCF), and has a programme running under the World Bank’s Pilot

Programme for Climate Resilience (PPCR). There is also a multi-donor funded programme covering

disaster risk reduction and climate change – the Comprehensive Disaster Management Programme

(CDMP) – which has been running since 2005. These initiatives are complemented by a number of

bilateral programmes. Further details are provided below.



3.2.1 Bangladesh Climate Change Trust Fund

The BCCTF was established in 2010 under the Climate Change Trust Act. It received a block

budgetary allocation in the form of an endowment from the Government of Bangladesh, financed

from state revenues. It is managed by a trustee board (with representatives of 10 ministries), together

with a technical committee to review proposals. The majority of allocations are made to projects

proposed by sector ministries, with a small set aside for NGO funds managed by the Palli Karma-

Sahayak Foundation (PKSF). The fund comprises approximately US $385 million allocated over a

5-year fiscal period up to 2015. 66% of these resources were allocated to projects, and the remaining

34% as an emergency response fund. By mid-2014, 218 projects had been identified, totalling

approximately 80% of the funds allocated to government-led projects. On the other hand, NGOs

were implementing 63 projects.

A proportion of funding was directly allocated to the water sector. As of June 2014, the fund reported3

the following water-related investments:

1. 142km construction, rehabilitation and repair of embankments;

2. 535km excavation and re-excavation of canals;

3. 122km of river bank protection;

4. 166km of drainage construction;

5. 44 water-control infrastructures (i.e. regulators, sluices); and

6. 740 deep tubewells for safe drinking water.

In 2014, the Government of Bangladesh announced that it would not be providing additional funds

for the BCCTF, and that instead the BCCRF (see below) would become the main focus for financing

climate change projects.

3.2.2 Bangladesh Climate Change Resilience Fund

The BCCRF is a coordinated financing mechanism by the Government of Bangladesh, development

partners and the World Bank to address the impacts of climate change. The fund was established in

May 2010 with financial support from Denmark, the European Union, Sweden and the United

Kingdom. Switzerland, Australia and the United States subsequently joined the fund (M. R. Bijoy,

personal communication, 5 February 2015).

This mechanism is enabling the Government to channel in over US $188 million grant funds to

millions of Bangladeshis to build their resilience to the effects of climate change. The Government

of Bangladesh leads on the management and implementation of the BCCRF. Approximately US

$144 million have already been allocated to implement seven projects, primarily in the areas of food

storage, solar irrigation, community climate change, agricultural adaptation, afforestation and

cyclone shelter. The Fund has also financed a number of research studies. A technical assistance

portion of the BCCRF is executed by the World Bank under agreement with the Government of

Bangladesh. On behalf of contributing donors and for a limited duration, the World Bank, in

consultation with the Government, is performing some functions, such as ensuring due diligence

3 As listed in the BCCTF website: www.bcct.gov.bd/index.php/key-achievements.

http://www.bcct.gov.bd/index.php/key-achievements



requirements on the BCCRF (including fiduciary management, transparency and accountability), and

ensuring projects are implemented with due regard to economy, efficiency and effectiveness.

3.2.3 Pilot Programme for Climate Resilience

The Pilot Programme for Climate Resilience (PPCR) is an initiative managed by the Climate

Investment Funds (housed at the World Bank). In Bangladesh, the programme is making available

US $110 million in grants (45%) and near-zero interest credits (55%). The programme was designed

under the leadership of the government, in coordination with the Asian Development Bank, members

of the World Bank Group (IBRD, IDA and IFC), key Bangladeshi stakeholders, and other

development partners. Project financing will focus on improving climate resilient agriculture and food

security; strengthening the security and reliability of fresh water supply, sanitation, and infrastructure;

and enhancing the resilience of coastal communities and infrastructure.

In particular, the PPCR is preparing to finance the ‘Coastal Climate Resilient Water Supply,

Sanitation and Infrastructure Improvement Project’ as part of its investment portfolio. The PPCR is

providing US $30 million (of which US $10m are in the form of grants), alongside US $120 million of

co-finance. The project aims to improve water supply, sanitation and connectivity, and build water

supply and sanitation systems that are resilient to climate change impacts (particularly post-disaster),

alongside other infrastructure improvements (e.g. roads). This initiative also supports the

development of water management cooperative associations for the maintenance of water systems.

3.2.4 Effectiveness of financial architecture

As part of the BCCSAP, Bangladesh envisaged an investment requirement of approximately US $5

billion in climate-sensitive activities for the period 2009 – 2013. A report by IIED (2014) indicated that

Bangladesh had only leveraged approximately US $1 billion of the required investment.

Bangladesh uses a range of financial intermediaries to access climate funds from public and private

sources (including the national trust funds and partnerships with international financial institutions).

IIED find that while the current structure has supported efficiency, allowing each intermediary to

focus on its area of expertise, it has resulted in a somewhat fragmented and ‘projectised’ finance

landscape, with the need for greater synergy among intermediaries. More fundamentally,

fragmentation has also contributed to the lack of consensus on basic climate finance concepts and

strategies, and has emphasised the need for leadership and political commitment (M. R. Bijoy and

A. A. Khan, personal communications, February 2015). Fragmentation has created a greater need

for institutional arrangements that have a mandate to coordinate activities between different

stakeholders, potentially through the consolidated Climate Fiscal Framework, which is currently

under development. One option might be to work through the Planning Commission, in association

with the Ministry of Finance.

Another area of weakness is the lack of local level financial intermediaries who can support

implementation and disbursement. Local government institutions might play such a role, but would

require a new mandate and significantly increased capacity. The IIED report also identifies the need

to scale-up efforts to access international funds, and innovative blending of different financial

instruments (i.e. grants, loans and guarantees).

3.2.5 Going forward

Bangladesh is currently undertaking a process for accreditation to the Green Climate Fund, in

expectation of direct financing from this mechanism from 2016 onwards. The Economic Relations

Division (ERD) at the Ministry of Finance has been appointed as the National Designated Authority



(NDA), and is currently being supported by a number of donors (e.g. UNDP, GIZ, and DFID) as part

of this accreditation process. The NDA should facilitate an inclusive dialogue with all government

stakeholders, civil society and the private sector (M. R. Bijoy, personal communication, 5 February

2015). Fourteen national entities have also been identified as potential National Implementing

Entities (NIEs) under the GCF and an assessment is currently underway.

The ERD also completed a ‘self-assessment’ process to identify the strengths and gaps of the

prioritised institutions. To assist with the selection process, the Government of Bangladesh, in close

partnership with GIZ, appointed an international consultant who completed ‘one-to-one’ meeting

sessions with the potential institutions. Following the self-assessment process, the Economic

Relations Division organised a consultation workshop, called the ‘NIE Accreditation Process: Getting

Bangladesh Ready for the Green Climate Fund’. The workshop discussed the outcomes of the self-

assessment process, the capacity and eligibility gaps of the positional institutions, and explored the

technical assistance needed to make Bangladesh ready to gain access to the GCF.

At the same time, Bangladesh continues to work with multilateral partners as a potential access

route. In this context, the operation of the BCCRF is also under review, with the World Bank indicating

it no longer wishes to be the fund trustee (R. Ahmed, personal communication, 4 February 2015). It

is possible that the Fund will be restructured as part of a wider national development process.

Following a Climate Public Expenditure and Institutional Review (CPEIR) conducted in 2012, the

government of Bangladesh continues to work towards the development of a Climate Fiscal

Framework (MoF, 2014). The CPEIR identified that climate-relevant expenditure constituted

between 5-8% of total government budgets. A Climate Fiscal Framework (CFF) would identify the

demand (expenditure) and supply (revenue or finance) sides of climate fiscal funds, and promote

the establishment of a transparent and sustainable climate fiscal policy. This would also help to (i)

identify existing expenditures and modalities for delivering climate-related finance; (ii) identify

additional expenditure requirements drawing from action plans, such as the BCCSAP, and other

sources; (iii) identify financing gaps and preferred modalities for delivering further sources of public

investment (external and domestic); and (iv) create an enabling environment for private financial

flows. The CFF is expected to be in place by the end of this year or beginning of the next (B. Wang,

personal communication, 19 June 2015).

3.3 Climate finance to date

According to the Climate Funds Update (CFU) project-level database4, a total of US $489 million of

climate finance have been approved5 in Bangladesh since 2003. This is based on CFU’s definition

of ‘climate finance’ (see Inception Report, Section 2.4 for definitions) and is only representative of

multilaterally-governed funds. Given that national climate funds are predominant in Bangladesh (as

allocated through the BCCTF and the Annual Development Plan), the total amount of climate funds

reported by the CFU is likely to be underestimated. Indeed, since its establishment, more than 300

projects have been funded through the BCCTF (B. Wang, personal communication, 19 June 2015),

while the CFU only captures 22 projects.

Figure 4 shows that the majority of climate finance in Bangladesh has been allocated to adaptation

activities (63%), followed by mitigation (30%) and multiple foci (7%), the latter of which may also

encompass REDD+ activities. This distribution is consistent with the identified vulnerabilities in

4 The CFU database is cumulative since 2003, and tracks all multilateral-governed funds focussed on climate finance. Data also contains information about some major bilateral initiatives and national climate change funds, but coverage is not universal. For more information, please refer to http://www.climatefundsupdate.org/about/data-figures-notes. 5 The CFU defines approved funds as those that have been “officially approved and earmarked to a specific project or programme”.

http://www.climatefundsupdate.org/about/data-figures-notes



coastal and drought-prone areas (see Section 2.2), and the activities outlined in the BCCSAP – only

one of six themes directly addresses mitigation and low carbon development.

Figure 4 Distribution of climate finance by focus

Source: CFU (2014).

Climate finance in Bangladesh has been mainly provided by bilateral funds focused on climate

change. Indeed, Japan’s Fast Start Finance (FSF) has contributed with 58% of the resources

approved for the country, while the UK’s International Climate Fund has contributed with 13% of

approved funds. Among multilateral funds, most of the projects since 2003 have been financed by

the Pilot Program for Climate Resilience (PPCR), which has contributed with 21% of total funds to

date. Among these major funders, data suggests that only the PPCR has disbursed any resources

(i.e. funds have been spent), and these only correspond to 3% of the committed amount. Regarding

disbursed amounts, only the GEF Trust Fund (4 and 5) has disbursed 100% of approved amounts,

followed by the Global Climate Change Alliance (GCCA) with 51% and the Least Developed

Countries Fund (LDCF) with 24% (Table 4).

Table 4 Distribution of climate finance by funder

Funder

% of total

funds

approved

Funds

approved (US

million)

Funds

disbursed (US

million)

Funds

disbursed (% of

funds approved)

GEF Trust Fund (GEF 4) 1% $3.0 $3.0 100%

GEF Trust Fund (GEF 5) 2% $10.7 $10.7 100%

Global Climate Change Alliance (GCCA)

2% $11.6 $5.8 50%

Japan's Fast Start Finance

58% $284.2 $- 0%

Least Developed

Countries Fund (LDCF) 3% $14.5 $3.5 24%

Pilot Program for Climate Resilience (PPCR)

21% $100.0 $2.5 3%

UK's International Climate Fund

13% $64.9 $- 0%

Source: CFU (2014).

There are several explanations for the low disbursement rates observed. First, there are data quality

issues related to the frequency of updates to the CFU database, specifically with regards to the

amounts of funds disbursed for each project. It is unclear if projects are systematically tracked by

the CFU or if project data is entered on a one-time basis. For instance, A. Faisal from ADB suggested

that around 20% of PPCR funds have been disbursed as compared to just 3% currently reported in

Adaptation, 63.1%

Mitigation, 29.9%

Multiple foci, 7.0%



the CFU database (Personal communication, 7 June 2015) Second, there are data availability

constraints related to the very limited or inexistent information regarding the amounts disbursed per

project, as funders generally only report pledged amounts (B. Wang, personal communication, 19

June 2015). Finally, unlike national projects that are implemented under tight annual plans and

budget frameworks, time frames for international projects are usually longer (Ibid, 19 June 2015).

Delays are common at the initial stage of a project, with disbursements and implementation

beginning 1-2 years after project and funds approval. These delays may be related to drafting of

implementation plans, the recruitment and mobilisation of consultants, transparency concerns,

contractual obligations, and land acquisition where required. It is worth noting that these delays are

not exclusive to climate finance but are rather experienced across all development programmes and

projects (A. Faisal, personal communication, 7 June 2015).

Figure 5 shows the distribution of climate finance by type of instrument. As shown, the majority of

funds have been approved as loans (56%), followed by grants (21%), and other unknown

instruments (13%)6. Although it may seem surprising to find such a high proportion of loans (given

that the majority of activities funded are focussed on adaptation), these resources mainly correspond

to the two largest projects in Bangladesh: (1) the Khulna Water Supply Project, focused on

adaptation, and (2) the Rural Electrification Upgradation Project, which focuses on mitigation. In

particular, the Khulna Water Supply Project seems to fall under the infrastructure theme (T3) of the

BCCSAP, which is commonly funded by loans (E. Morsheda and A. Faisal, personal communication,

3 February 2015). Both of these projects were also funded by Japan’s FSF.

Figure 5 Distribution of climate finance by type of instrument

Source: CFU (2014).

6 A ‘grant’ is defined as a transfer with no required repayment; a ‘concessional loan’ is provided under more generous terms than market rates, and a ‘loan’ is offered at or close to market rates.

Concessional Loan, 10.2%

Grant, 21.0%

Loan, 55.5%

Unknown, 13.3%



4 Climate finance for water security

Following the methodology presented in the Inception Report, we have categorised CFU project-

level data to estimate the amount of funding directed towards water security or related activities.

Using the OECD Creditor Reporting System (CRS) coding, projects have been distributed across

the following water security categories:

Category A includes projects that are primarily related to Water Supply, Sanitation and

Hygiene (WASH);

Category B includes projects primarily pertaining to ‘natural security resources’ that are inter-

related to water security, such as integrated water resources management (IWRM),

agricultural water resources, and water-related energy security;

Category C encompasses projects that are indirectly related to water security – mainly those

activities that present potential co-benefits or trade-offs from mitigation activities, such as

forestry; and

Category D includes climate finance projects that are not related to water security.

For Bangladesh, there are a total of 22 projects in the CFU database. We looked for each of these

projects in the OECD Creditor Reporting System (CRS) to be able to attach a specific CRS code to

each of them, and then proceed with the categorisation. 17 of the projects were found in the CRS,

indicating a cross-over between ODA and climate finance as listed in the CFU database. However,

5 of the projects were not found in the OECD database, so project-specific documentation was used

to make a subjective judgement and allocate them accordingly. The full list of projects, along with

CRS codes and categorisation is reported in Annex A.

Table 5 shows the final distribution of projects by water security categories. Out of 22 projects, only

3 are directly related to water security, and correspond to 39% (US $190m) of total climate finance.

All of these projects fall into Category A (i.e. WASH)7. There are no projects related to other natural

water security resources (Category B), and there is only 1 project that presents co-benefits or trade-

offs related to afforestation and reforestation (Category C). Thus, the bulk of international climate

finance in Bangladesh is allocated to projects that are not related to water security – these account

for 60% of the total resources approved. The majority of the projects in Category D correspond to

environmental policy and administrative management, including activities such as the ‘Bangladesh

Climate Change Programme’ or ‘Community-Based Adaptation through Coastal Afforestation’,

among others.

The projects funded encompass both national and sub-national level activities. The majority of

climate finance directed to country-wide initiatives pertains more to environmental policy and

management, including allocations to the BCCRF or the NAPA. On the contrary, sub-national

projects are directed to specific activities, such as renewable energy, urban transport or afforestation.

At least 5 projects out of the 22 reported by the CFU are related to adaptation activities in the coastal

belt of Bangladesh, given that these are the areas that have been found to be most vulnerable to

climate change impacts (see Section 2.2).

7 It should be noted that this involves categorisation of the whole project budgets into Category A, when in fact some projects contain items which are not category A. For example, in Section 4.2 below, The Coastal Towns Infrastructure Improvement Project contains activities related to solid waste and drainage. These activities would be in Category B if they were separate projects.



It should be emphasised that Table 5 only includes climate finance from the CFU. Arguably, most

activities under the BCCTF and BCCRF could also be included, but these are not in the CFU

database and so do not fall under the definition of climate finance in our methodology.

Table 5 Distribution of climate finance by project categories

Project categories % of total

funds

Funds

approved (US

million)

Funds

disbursed (US

million)8

No. of

projects

Water supply and sanitation activities (A)

38.9 $190.24 $- 3

Other water-related

activities (B) 0.0 $- $- 0

Indirectly related to water (C)

1.2 $5.65 $- 1

Not related to water (D) 59.9 $292.92 $25.55 18

Source: CFU (2014).

To have a better understanding of the types of activities funded within WASH, as well as the way in

which they are funded, we have summarised the main project features for all projects in Category A

in the following sections.

4.1 Water supply and sanitation activities

All of these activities address key climate change risks related to water security in the coastal areas

of Bangladesh, such as sea level rise and saltwater intrusion. They are also broadly in line with the

climate change hazards identified by the IPCC 5th Assessment.

4.1.1 The Khulna Water Supply Project

Project characteristics

Funders

Asian Development Bank, Japan International

Cooperation Agency (JICA, co-financer),

Government of Bangladesh

Focus Adaptation

Financial instrument Loan

Project cost US $363.6 million

Approval / closing year 2011 / 2018

OECD CRS coding 14021 / 14031

Source: ADB (2011), CFU (2014), and OECD CRS.

Context

Khulna city is located in the coastal belt of Bangladesh and its population relies entirely on

groundwater. Thus, this city is seen as highly vulnerable to climate change impacts, mainly due to

sea level rise and its subsequent intrusion to nearby aquifers.

8 CFU data does not seem to be updated on a regular basis, which may explain the low proportion of disbursed amounts since 2003. Given the limited availability of this information, we are not able to classify projects using disbursed amounts.



In 2010, only 23% of the population had access to a piped water supply, with the remaining

population relying on public tabs or private tubewells, which tend to be poorly maintained and not

readily accessible by all households (ADB, 2012).

To expand the coverage of piped water supply, ADB approved this project in June 2011. A simulation

of climate change impacts in Khulna city was carried out for this project and complementary

adaptation strategies were incorporated in the project design.

Project objectives

This project aims to contribute to the achievement of MDG7 by increasing access to improved water

sources (ADB, 2011).

The specific outputs of this project are:

1. Sustainably managed water sources in Khulna city;

2. An extended and efficiently managed distribution network in Khulna city; and

3. Professional and sustainable management of the Khulna Water Supply and Sewerage

Authority (KWASA).

Within output (1), the project will develop a surface water treatment plant to meet the growing

demand for water and avoid over-abstraction of groundwater resources. Groundwater and surface

water will be used simultaneously to enhance a more sustainable and efficient water resource

management. Output (2) is mainly concerned with increasing the piped water supply coverage from

23% in 2010 to 62% by 2018. Finally, output (3) aims to support KWASA in implementing its 5-year

business plan, which encompasses capital investment, financial, and human resource development

strategies (ADB, 2011).

Budget and financing plan

Item Amount (US million)

Civil works and equipment $238.9

Consultants $18.2

Land acquisition and resettlement $5.9

Administration costs $1.6

Contingencies $37.9

Interest charges during implementation $2.7

Taxes and duties $58.4

Total $363.6

Source: ADB (2011).

JICA will mainly finance output (1), while ADB will finance outputs (2) and (3).

Source Amount (US million) % of total

Asian Development Bank $75.0 20%

JICA $184.0 51%

Government of Bangladesh $104.6 29%

Total $363.6 100%

Source: ADB (2011).



4.1.2 The Coastal Towns Infrastructure Improvement Project


Funders Asian Development Bank, Government of

Bangladesh

Focus Adaptation

Financial instrument Grant / Concessional Loan

Project cost US $117.1 million

Approval / closing year 2013 / 2020

OECD CRS coding 14031 / 14032 / 41050

Source: ADB (2013), CFU (2014), and OECD CRS.

Context

Bangladesh’s coastal belt is highly vulnerable to cyclones, storm surges, sea level rise, and saline

intrusion. In particular, coastal areas have low access to piped water supply, and are subject to

increased pollution of aquifers due to saltwater intrusion and over-abstraction of groundwater

resources. Similarly, for households that have adequate sanitation facilities, there are no treatment

systems, which is reflected in increased pollution levels and a high incidence of water-borne

diseases. Other key infrastructure needs in coastal towns include emergency access roads and

cyclone shelters.

The high vulnerability of coastal cities is not only related to the lack of climate-resilient infrastructure,

but also to poor governance and low adaptive capacity. Hence, institutional capacity, governance

and public awareness need to be enhanced to complement infrastructure investments. This will

contribute to the development of an integrated approach to climate change resilience and disaster

preparedness (ADB, n .d).

Project objectives

The project will strengthen climate resilience and disaster preparedness in eight vulnerable coastal

towns of Bangladesh. Specific outputs include:

1. Providing climate-resilient municipal infrastructure, including drainage, water supply,

sanitation, and solid waste management, among others;

2. Strengthening of institutional capacity and public awareness for improved urban planning and

service delivery, which takes into consideration climate change and disaster risks; and

3. Project management and administration support.

This projects is prioritised in the government’s Strategic Program for Climate Resilience (SPCR),

and is consistent with the Bangladesh country partnership strategy that targets assistance to

vulnerable coastal areas that may be affected by climate change.



Budget and financing plan

Item Amount (US million)

Improved climate-resilient municipal

infrastructure $81.5

Strengthened institutional capacity, governance

and awareness $4.1

Project management and administration support $17.6

Contingencies $11.2

Financing charges during implementation $2.8

Total $117.1

Source: ADB (2013).

Source Amount (US million) % of total

Asian Development Bank – Special Funds

(loan) $52.0 44%

ADB Strategic Climate Fund (loan) $30.0 26%

ADB Strategic Climate Fund (grant) $10.4 9%

Sanitation Financing Partnership Trust

Fund under the Water Financing

Partnership Facility (grant)

$1.6 1%

Government of Bangladesh $23.1 29%

Total $117.1 100%

Source: ADB (2013).

4.1.3 The Programme for the Improvement of Capabilities to Cope with Natural Disasters Caused by Climate Change


Funders Japan International Cooperation Agency (JICA)

Focus Adaptation

Financial instrument Grant

Project cost US $13.0 million (from JICA)

Approval / closing year 2010 / 2016 (?)

OECD CRS coding 14031

Source: CFU (2014), and OECD CRS.

Unfortunately, we were not able to find detailed information related to this programme.

We know that it is being implemented in 19 different countries, among them Bangladesh. There is a

specific contract for the procurement of a saline water treatment plant that is expected to (1) provide

safe drinking water both during and after natural disasters to people living in the coastal belt (i.e.

Khulna and Barisal); and (2) increase disaster management capacity within the Department of Public

Health Engineering (DPHE). Other specific projects within this programme remain unknown.

4.2 Future scope for water projects

Despite the clear links between climate change and water security, as delineated in the BCCSAP

and national development plans, there are still many water projects that have not been formally



linked to climate change. On one hand, the full linkages between water and food security could be

further developed (A. Khan and M. Kabir, personal communication, 2 February 2015). On the other

hand, although coverage of improved water resources is high, there are many issues with water

quality, which point to increased saline intrusion and groundwater pollution, both of which pertain to

climate change (R. Ahmed, personal communication, 4 February 2015). Generally, WASH is

overlooked in national policy as coverage has significantly improved during the last decade,

undermining potential improvements in service levels.

More broadly, to determine where climate finance should be directed, a clear methodology for

quantifying the effects of climate change and their respective costs is needed. Indeed, there are

currently no updated vulnerability maps or indices that allow for the identification of priority areas,

with several projects (if not the majority) targeted towards coastal and drought-prone areas as

identified in international assessments. Suggestions include the creation of a national climate

vulnerability index, which should be aligned with medium- to long-term national development plans

(A. Faisal, personal communication, 7 June 2015).

Finally, alternative schemes of delivery could also be explored, including public-private partnerships

(PPPs) or the active involvement of water user associations (R. Ahmed, personal communication, 4

February 2015).



5 Conclusions and policy recommendations

Based on the country review, we have the following conclusions and policy recommendations.

5.1 Conclusions

1. Bangladesh experiences significant variability in relation to water resource availability.

Although there is improving access to clean water and sanitation, there is an increasing

dependence on groundwater extraction, which is depleting reserves and is also subject to

saline intrusion in the coastal belt. Bangladesh is severely exposed to the impacts of climate

change, in particular sea level rise, drought and flood events, which are in turn exacerbating

the existing challenges related to the water sector.

2. Bangladesh has a long history of climate mainstreaming with regard to the water sector.

Water and sanitation were identified as elements in the 2005 NAPA and the 2009 BCCASP.

However, while some projects are being financed through the national climate funds (i.e.

BCCTF and BCCRF), these activities represent only a small part of climate finance flows and

WASH is not seen as a major priority for national funds. Examples of projects being supported

include deep drinking water wells financed under the BCCTF and coastal water and

sanitation infrastructure supported under the PPCR.

3. To date, more than US $600 million have been mobilised through the national and

international climate finance structures, with significant future flows expected as part of the

UNFCCC process. However, the domestic climate finance architecture is now undergoing

significant restructuring. Bangladesh is implementing readiness activities for direct access

accreditation to the Green Climate Fund. The structure and governance of the BCCTF is also

evolving, with the BCCRF no longer receiving funds from the Government of Bangladesh.

This creates a level of uncertainty about how future climate finance modalities will operate in

the country going forward.

4. Our analysis of CFU data finds that 39% (US $190 m) of total climate finance in Bangladesh

between 2003 and 2014 was directly related to water security. This all falls into Category A

(WASH), with the bulk of this finance coming from large ADB and JICA projects targeted at

water supply and water management in urban areas. However, this study excludes the

majority (if not all) of domestic climate finance, which is likely to be larger than total

international funds.

5. Stakeholders generally hold the view that climate change institutions and funding are

relatively developed in the country, with preparations being made for the launch of the GCF.

However, coordination across different institutions, as well as monitoring and evaluation

mechanisms are still required to ensure that project implementation is done adequately. They

think that, although WASH (and water security more broadly) is a priority in national policy –

and even more so in the context of climate change – there are limited investments in the

sector currently funded by climate finance.

5.2 Recommendations

1. From an advocacy perspective, WaterAid should promote water security as a more

mainstream concept within the climate resilience agenda both to the Government of

Bangladesh, IFIs and bilateral donors. There is already some traction within the BCCASP,

and the BCCTF and PCCR are providing a platform for evidence and learning at project level.



In particular, there may be thematic traction around the area of coastal zones, where both

water and sanitation are exposed to rising sea levels, natural disasters and saline intrusion.

2. While, much climate finance is rightly being directed at addressing the adaptation deficit (i.e.

vulnerability), WaterAid should engage with donors and Government of Bangladesh to

ensure that water security projects are not just undertaking ‘business as usual’ activities, but

also take into account future climate change (e.g. increases in flooding, natural disasters and

saline intrusion over the historic baseline).

3. In terms of finance, WaterAid should continue to monitor developments in the changing

climate finance infrastructure in Bangladesh (engaging with the BCCRF, BCCTF and Ministry

of Finance), and understand how finance from the Green Climate Fund will flow to water

security type activities within the government budget, as there is likely to be direct access for

the relevant ministries and other State bodies.

4. WaterAid should work with non-government institutions in the water sector to support climate-

finance compatible WASH-related programme design, and create an evidence-based case

for community-led approaches that have been under-represented in the existing climate

finance portfolio. Evidence might then be shared with existing climate funds, and ideas

promoted as potential programming concepts to the NDA and National Implementing Entities

under the GCF.



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Annex A List of CFU projects and categorisation

The table below presents the main categorisation of projects. It should be read in tandem with Section 3.2 of the Inception Report.

ODA OOF CRS Code Climate tag OPM

category Project Focus

Y 14021 / 14031 Y A Khulna Water Supply Project Adaptation

D Rural electrification upgradation project Mitigation - general

Y 41010 Y D Climate Change Programme - Jolobayoo-O-Jibon Adaptation

Y 31220 / 41010 / 41050 / 41082 / 74010

D Coastal embankment improvement project Adaptation

Y 21020 / 31191 / 41050 N D Climate Resilient Infrastructure Improvement in Coastal Zone Project

Adaptation

Y 23062 Y D Bheramara Combined Cycle Power Plant Development Project Mitigation - general

Y 14031 Y A Programme for the Improvement of Capabilities to Cope with Natural Disasters Caused by Climate Change

Adaptation

Y 41010 / 41020 Y D Bangladesh Climate Change Resilience Fund (BCCRF) Multiple foci

D Bangladesh Climate Change Programme I Multiple foci

Y 41050 / 14031 / 14032 N A Coastal Towns Infrastructure Improvement Project Adaptation

Y 31210 Y C Integrating Community-based Adaptation into Afforestation and Reforestation Programmes in Bangladesh

Adaptation

Y 41010 Y D Ecosystem-based Approaches to Adaptation (EbA) in the Drought-

prone Barind Tract and Haor "Wetland" Area Adaptation

Y 21010 / 21020 N D ASTUD: Greater Dhaka Sustainable Urban Transport Corridor Project

Mitigation - general

Y 23030 Y D Development of Sustainable Renewable Energy Power Generation Mitigation - general

Y 41010 N D Community Based Adaptation to Climate Change through Coastal Afforestation

Adaptation

D Promoting Climate Resilient Agriculture and Food Security Adaptation

Y 41010 N D Improving Kiln Efficiency in the Brick Making Industry in Bangladesh Mitigation - general

Y 41010 Y D Third National Communication to the UNFCCC Multiple foci

Y 21020 / 31191 / 41050 N D Climate Resilient Infrastructure Improvement in Coastal Zone Project (Project Preparation Grant)

Adaptation

D Climate Change Capacity Building and Knowledge Management

Technical Assistance (preparation grant) Adaptation



D Feasibility study for a pilot program of climate resilient housing in the

Coastal Region (TA) Adaptation

D National Adaptation Programme of Action Adaptation

Y 41010 N D UN-REDD Bangladesh Mitigation - REDD



Annex B List of stakeholders consulted

The following stakeholders were interviewed as part of the country case study.

ID Name and role Organisation Date

1 Rashed Al Hasan, Policy Manager Business Finance for the Poor in Bangladesh Programme (BFP-B)

1 February 2015

2 Mohammad Abdul Qayuum, National Project Director

Comprehensive Disaster Management Programme II

2 February 2015

3

Imrul Kayes Muniruzzaman, Director

Fundraising and Organisational Learning; Arif Abdullah Khan, Programme

Manager; Dr Mohammod Lutful Kabir, Research Manager

WaterAid 2 February 2015

4 Dr Sultan Ahmed, Joint Secretary Director

Natural Resources Management

and Research, Department of Environment, Ministry of Environment and Forests

2 February 2015

5

Elma Morsheda, Senior Project Officer

Urban Infrastructure Arif Mohammad Faisal, Environment Specialist

ADB 3 February 2015

6 Lia Carol Sieghart, Lead Climate

Change Specialist World Bank 3 February 2015

7 Md Abdul Quddus, Additional Secretary, Managing Director

Bangladesh Climate Change Trust Fund

3 February 2015

8 Rokeya Ahmed, Water and Sanitation Specialist

World Bank 4 February 2015

9 Minazur Rahman Bijoy, Coordinator National Climate Coalition, Bangladesh

5 February 2015

Follow-up interviews

10 Arif Mohammad Faisal, Environment

Specialist ADB 7 June 2015

11 Dr Saleemul Huq, Senior Fellow IIED 18 June 2015

12 Bowen Wang, Visiting Researcher IIED 19 June 2015



Annex C Summary of key stakeholder interviews

Stakeholder ID

Water Security

Definition (What do you understand as water security? Is there a specific framework you refer to define water security? (UEA web, ODI, WaterAid etc.) Is there a consensus in your institution / organisation about this definition?)

2

Understanding of WS - still dilemmas, in terms of how to portray the challenges related with water. Safe drinking water needs to be of adequate quality quantity etc. There are also larger political issue like transboundary issues (although WA not involved, and as organisation they are not positioned to deal with it, but acknowledge that there is a strong link). WS is also for the long term so here we can link with climate change.

The WS framework is developed by WA. Parts of the framework are skewed towards Africa context, so lots of opportunities to improve it. How to incorporate challenges of climate change in it?

4

Water and environment are synonym in Bangladesh. 80% of country is watershed and floodplain.

WS in terms of water availability. WS is not for human intervention, but for ecosystem. They do restoration and improvement of ecosystem, water should be secure for it. Water demand must be fulfilled. Government programs to provide water for various needs. Also for economic growth of 6%.

5

Water security- wherever the ADB interventions are, the coverage needs to be 100%. Try to build capacity of poor. Governance focus. Financing is through implementing governance criteria in addition to performance criteria.

ADB has 5 dimensions of water security. Integrated development, plus they have separate water supply work. It's not an add-on, but also need to remember that interventions are demand driven. So mostly focus on infrastructure, water comes late in priorities, 4th priority of mayo rs.

6 Gender perspective? Not really. Look at water from a whole integrated perspective, not only water and sanitation. Look at emb ankments, etc. Municipal level

most goes to drainage, before it was irrigation.

7 Agriculture, drinking, navigation, ecosystem all in one basket. Drinking water security is fundamental.

Evidence (What are the main threats to water security in the country?)

1 2 major issues in Bangladesh:



o Cyclone. Every 3-5 years of devastating magnitude. Wind speed more than 200km/h Cat. 3 level or more. 20 out of 63 are coastal districts and are very affected. Disasters are caused by wind and tidal waves. Salinity intrusion is also an issue. So need interventions on drinking water conservation.

o Floods. There are regular floods every year, and devastating ones every 8/10 years. There are three large rivers that are pro ne to floods and river erosion. The erosion causes the formation of chars (small islands in the rivers) where poor people go to live.

2 Problem is scarcity of drinking water! Male dominated society, and water collection is a woman’s job, so also gender impact. This is why water is not a

mainstream discussion. WS is also transboundary.

3

Threats: 3 major: o Groundwater depletion. Evident from many studies, including in Dhaka. o Surface water contamination is on rise despite policy commitments and regulatory frameworks. This has multiplier effect becau se dependency

on ground water will keep rising. o Natural disasters. If linked to climate change they will link back to it. Rainfall a contributing factor to insecurity. Untim ely rains make farmers

rely more on ground water.

In Dhaka water table depleting very fast. Saline intrusion risk is very high. No regulation on groundwater recharge. Difficult to change the mind-set of the people to communicate in a better way. Threat focuses on water resources. Whether it’s a natural resource (rivers drying up). So need to focus on resources in ground and surface.

4 People are using ground water extraction impacted by saline water.

Northwest has drought. Huge variation of precipitation. Also water pollution - chemical pollution. So renewable potential of water is close to zero.

7

16 coastal districts with similar problems of drinking water for salinity. Desalinisation for drinking water is therefore fundamental. Many governmental agencies, there are also transportable vehicles for desalinations plants.

Other areas in the North of the country have drinking water scarcity instead. Groundwater level has lowered. Pollution- dealt with by environment.

Initiatives (What are the main policies / research undertaken related to water security?)

2 Policy for DRM and CC is different, BCCSAP is there etc. disaster management policy is there.

3 There is a water act and enforcement is difficult. Regulatory framework needs also to be more practical and implementable. Ne eds to prioritise where

restrictions need to happen.

4

Environment Policy one of the oldest. 1992. Need to revise it because of CC and anthropogenic activities. Now at MoEF being processed. Up to cabinet, as it's an umbrella regulation. So other policies should be streamlined with it.

How to reconnect rivers with floodplains because of embankment system, so as ecosystem is maintained. 12 ecologically critical areas. Now 13th will be gazetted soon. Plus they give recommendations to different sector policies.



Nat water policy 1999; Nat water management 2005; Nat water act (law) and need procedure to enact. These are under preparation.

5 Water master plan by 2030: use 30 percent of surface water and rest ground water. By 2040 will be reversed, 70% surface water. Artificial recharge? Not doing this, but also WB has it.

Want to set up water regulatory commission. Policy reform and regulatory issues should improve. National committee, with loca l government.

Institutions (What governmental bodies or people have mandate over water security?)

1

Dept. of Public Health and Engineering for WASH

Dept. Food and Disaster for DRM

Dept. Forest and Environment for NAPA But different committees at the sub-national level.

Union (Head by Union Chair, different stakeholders, including NGOs participate), Upajarat (Upajarati Officer Chairs), District, Minister, PM (very high level).

2

DRM is by DRM and relief. CC is by Min of Environment and Forests.

CBDM is working with 14 ministries and 16 or 18 departments. They coordinate every department and create awareness on the effects and action required (as example, there are 326,000 building in Dhaka. 72,000 could collapse from earthquake. So the office coordinates even blood banks. And then monitor all the operations)

Transboundary issues. Dealt with by water ministry. Joint river commission.

3 WARPO - water resource planning organisation in government.

4 MoEF mostly regulatory agency.

Climate change and water

Evidence (What are the main threats to water security from climate change? Over what timescale do you expect these threats to take place? Is there any awareness of the impacts of climate change on water security? Have costs to address these impacts been identified (from other non -climate change related events)?)

2

Between CC and DRM - whatever is not touching the human system is science, otherwise if it does and creates loss and disaster it needs to be managed. On the ground, when the people are affected it's the same, when international level it becomes different (research on science, etc.). Of course, the focus depends also where the money is, now it’s about climate change/finance. The same is for water, before it was all about water availabi lity, now protecting water quality.

Vulnerable areas: areas coastal belt, northern and wetland of the country. And also middle is a flood prone area. Northwest is drought prone area. When in rainfall they plant, but now with temperature rising the earlier varieties are at challenge. Green revolution: to provide foo d is number one concern started to suck water, so drawing of water caused water table to go down. Northwest is wetland, resource of fresh water. Flash floods will increase with CC. Hill areas at north can be used for agriculture and horticulture.



Sea level rising and sweet water pressure is losing so more salinity. More devastating scenario for Bangladesh in future. Neighbouring countries withdraw water for their development. Before, river basin erosion was less. Now with change in water pressure, erosion is devastating. With salinity intrusion, agriculture is at risk in south. Declining and moving to north east but also at high risk.

Water is everything in Bangladesh (culture livelihoods etc.). All sectors will be at risk in the future. 160million now, every year more 2.2 million. Cyclones are also intensifying and becoming more frequent. Not be able to stay in coast so will face climate displaced people. But people unable to live in ancestor land. But no options because for example fishermen only know fishing in coastal zones. So they migrate in towns and can only beco me rickshaw pullers in slums that are in low lying areas. It increases urban congestion, floods, fires, where the service structure on verge of collapse.

Salinity, temperature rise, flash floods are the new issues. With CC will be aggravated. Indirectly. Salinity slow onset disaster. Water will be most scarce resource in Bangladesh. Water in Dhaka going further down and will be lower than sea level. Saline water has increased blood cholesterol. In Dhaka more than other areas.

3

They have implementing partners at the community level.

Issue is whether it's water security, or access to water? Challenge issue. WA promotes access, but different with WS. For current population need access, then for future issue of security.

4 Because of sea level rise there is ground water salinity penetration almost 100km. Salinity has massive impact on water security. 1/3 of people are affected.

5

Look at WB econ of adaptation. ADB will work on the additional costs. There are climate proofing guidelines with different options in different sectors. Can identify some broad sectors for incremental costs.

Impact of CC on water. Study on availability of surface water in Khulna water supply. Impact of groundwater and surface water due to CC.

Initiatives (Are these impacts addressed in current policy, and if so, where? (NAPAs, National Communications, etc.))

Climate finance

Definition (Is there a shared definition of climate finance?)

Evidence (How do you consider the general knowledge around climate finance?)

Architecture (Is there a climate finance architecture for this country? Who are the major donors? Who are the main beneficiaries? Are there National Designed Entities for the Green Climate Fund?)

2 Dedicated DRM Trust Fund, and also Resilience Fund.



On DRM: With the idea that cannot wait for international support Bangladesh has started with these resources for vulnerable p eople or sectors towards priority sectors or areas. Established by government. Both private and public allowed to apply. It's a trust fund so not inside budget.

Resilience fund- also meant to be focus for GCF. Still not developed. WB has declined to be trustee. Finance minister said country not ready to use money. In future government needs to allocate based on priority sectors of agriculture, water, fishing, and livestock.

4

Ready? They have a system. They have different funds they are utilising. Capacity building and implementation should go together. They are ready to implement, need to do so.

Renewable technology is needed although costly. Funds should go there.

5

Three climate funds: o Bangladesh CCTF (nearly dry), o Bangladesh resilience fund by WB implementing 5 projects and will no more admin due to governance and also want to manage large

projects o Climate investment fund. PPCR - 110 million dollars. Three investment projects and 2 technical assistance. Also 500 from other funding

mechanisms. So more than 650 million. Mostly operational. 50 grants and rest highly concessional loans. BCCRF also peculiar, using own governance architecture, not in regular development programme. It has very robust reporting and M&E framework and better. They have included all PPCR projects and all in M&E framework with results based. So now can tell what climate funds are and what is not.

Beyond that 6 or 7 percent of funds by government to resilience of annual development budget (through CPEIR). Now total more than 1 billion operational in Bangladesh.

GCF - Economic relations division recently NDA under MoF. There are some criteria and there will be NIE that will implement.

Strategic framework NAPA, BCCSA, NAMA (in preparation), SNC, fiscal framework particularly to track adaptation (CPEIR). Good tracking mechanism for ODA vs climate finance.

Pipeline projects- ADB has supported preparation of top 10. Already requested by ERD. 100 megawatt power; climate resilient development.

Capacity of NIEs- strong fiduciary system so have public procurement. Also robust safeguard system by the country. GCF has organized conference. Will provide 1 million for readiness programme. In response, government asked

for 1.9 so GIZ and UNDP support. Already allocated 4 million euros.

ERD good idea? They handle external finance, so are good. But do they have technical knowledge on CC? MoEF are involved. So are coordinating and should be coordinating. Plus have identified different agencies to work with them

6

Bangladesh is at the forefront on CC strategy and action plan. Now finding its place in clim ate finance arena to tap into GCF. Min of finance ERD is NDA for GCF. Capacity building done by GIZ and UNDP to identify potential NIEs.

It's good that the NDA is in MOF as CC is a crosscutting issue and will bring different ministries together. Government also needs time to establish the right mechanism and institutional framework.

7

ERD is NDA. 6 government organisations selected. There will be another screening and others will be NIE. Bangladesh is one of most vulnerable countries, but not sitting idly, started with own finance. From 2009, 300 million. Continuous process with law through parliament which is climate change act. Established this organisation. Governance: administered by 10 very influential ministers. Intention of government is clearly to put CC as high priority.

ERD is good thing for NDA. Important for financial negotiations with other countries.

Have government budget. From Min of finance and interests from bank. Both are aggregated for future projects. There are organisations that apply for funds, like water government board, agriculture department, and they send proposals in the form of projects in 6 thematic areas. If aligned with them, then considered.



NGOs? Now stopped. PKS was given funds to work with NGOs but government would not intervene in monitoring and monitored by PKS. PKS work mostly with microfinance and have expertise in management, but not known if they have cl imate change expertise. Only work with international NGOs, not national. Board members select projects and this trust gives secretarial service. They have their own monitoring team.

Relationship with the Resilience Fund - has other governing body to manage it. Government has idea of merging it and have it governed by board of trustees. They are all grants, maybe look at revolving fund and concessional loans.

Identification (Are climate finance flows distinct from ODA? Are there tools or methods to identify climate finance?)

2 Issues on climate finance because it is difficult to divide the impact of climate change from the rest. On constructions, it is possible to divide the costs – if a

building has 100 years timespan with no temperature increase, it could have less with increasing temperature, so the difference in costs can be calculated.

3

Adaptation distinct from development? Yes and no. Most adaptation is related to livelihoods related to economic activity in a changing environment. Secure food production, safety to farm activity etc. not enough discussions, apart from Water Aid, specifically focused on water security so the linkage needs to be stronger. Need also to talk in a very specific language. In WA they look at vulnerability in terms of projected risks. There is some understanding of temperature and sea level rise, so interventions are designed based on these. However, this is difficult because of uncertainty.

There is adaptation under compulsion and adaptation under choice. Some may adapt for economic gain. More about coping mechanisms to shocks rather than adaptation to trends.

7

To ensure WS in climate change- government has focussed on WS. In particular small urban regions in country, but interventions are done sporadically, not well planned and uncoordinated. Need help on water and especially drinking water plan. There are a number of opportunities to finance these proj ects. GIZ cooperates, e.g. on cooking oven that is more environmentally friendly and has less emissions.

For identification, the Government follows the 6 priority areas in the Bangladesh Climate Change Strategy and Action Plan .

Monitoring (Are there tools or methods to monitor climate finance? (e.g. databases, coordination meetings) Is there a donor coordinating body, and if so, how effective is it?)

4

Need coordinating agency across departments. If there is a new activity everyone is reluctant. Not trained to do it if not in the decision framework. But there is a risk of coordination. Need financial resources and control. Coordinating bodies are general ly at committee level. Shared resources can have risks because of accountability and allocation of responsibilities.

Planning commission approves development projects, there are 5 divisions, and each one would look at different ministries. Nat planning council not National Economic Council needed. To ensure economies of scale. Need strong planning at the top with priorities and identifying co benefits also . Coordination effectiveness will depend on the level where it will be placed. Also need enforcement and rules.

5 Donors sit together for coordination along with Min of Environment and Forests, and representatives of NGO community. There is also a subgroup on capacity

building; this could be a point of entry for mainstreaming CC.



There is a web portal on CC projects ready and waiting for minister to approve under ADB support. It will give access to relevant ministries. The Bangladesh CC trust fund also have their own website.

6 Climate finance tracking system is in place. Yearly reports of different MDBs.

7 Donors make coordination difficult.

Challenges (What are the major challenges related to climate finance? (E.g. access, disbursement, implementation, transparency etc.) If transparency is an issue, what do you think is the most successful way to address it, in particular in the context of water security?)

1 Good infrastructure, policy, DRM strategy and plan, NAPA, but not sufficient.

3

Not much invested by government or international donors in water security. Loans, etc. mainly for water supply in urban areas. While water is still subsidised by government with rich people ultimate gainers. So dev banks and government not investing. Government making some policy provisions like preservation of ponds in rural areas.

Looking mostly at sources not resources. Need to collaborate with different organisations, but WARPO has knowledge but doesn't share. Need coordination between different ministries to ensure main objectives. So to coordinate? Not strengthen WARPO as they are more technical.

Submitted application to government fund. Not heard anything after 1.5 years. But too many applications arrived and didn't kn ow what to do with it. Bangladesh is a country of NGOs. Not known what they do, transparency is an issue. And priorities of projects are more on infrastructure. Government likes that. Not difficult to convince that it's a climate change project. There are tools and frameworks, but not much knowledge. And they are made by government. Also didn't manage to disburse it all, because of lack of capacity and understanding. Leadership is needed. Political commitment i s also needed for CC.

Costs are a constraint in very marginalised areas as it's 6x more than urban areas.

4 Coordination is a problem. Should have an authority?

5

MoEF main point, but CC is crosscutting and many others are involved. So they have identified 12-14 ministries and agencies that are handling CC related issues. Under MoEF, Bangladesh CC trust fund. 300 million dollars in 3 fiscal years from bang govt. In the last year no money disbursed. 70 officers that manage the portfolio, one handles government agencies, and another for NGOs. But no private sector wing. There is no tracking mechanism - big corruption issues and governance. Most external aid is through mid-term budgetary framework, but this fund is peculiar. It's not included in government budget. Separate arrangements.

There is lots of knowledge on CC science. Also producing a lot of quality report and manuals. They are good in design of projects but bad in implementation of projects. Procurement, financial management, project monitoring etc. is bad. Also compared to other countries. Affecting all mainstreaming efforts.

Between CC projects and development is similar, but governance and implementation in both is difficult. Fund leakage of 25%, there is loss of institutional memory in particular in the MoEF. They are technical and there is an inverted pyramid structure. There are many top level officials and less workfo rce due to high promotion rate, so it makes implementation difficult.



Due to CC hot issues, a lot of people are engaged in conferences , etc. so cannot find people to issue notice or approve things.

Loss of institutional memory- few technical people that are technically sound. Sometimes they moved to other ministries that are not relevant to CC. Also, to retain pool, there could be mechanisms. If they work in the water sector, they should be moved to similar ministries such as agriculture, but appointments are generally political so this doesn't happen. Civil service reform is needed for CF and also ODA fund.

8

There is finance coming from all different sources and for different objectives, but the organisation and management is not w ell carried out and planned. Some hard to reach areas are flooded with relief.

The players think we have done water and sanitation, not serious about all the issues. Number of interventions and projects h ave decreased. Most projects are from the WB! Need to move up the ladder. Hygiene promotion, sanitary toilets, water security etc. needed. Lack political will and missing agenda in government.

WB has pressure to add sanitation because looking at health impacts. Needed to convince government, but still they wanted to move funds to water, which is easy to sell and pipe water is considered fundamental, but policymakers don't understand the link with sanitation. Also because they don't see the benefits and the situation in rural areas. Bangladesh is still behind in terms of MDGs on sanitation.

National/subnational (At what level of government are funds being spent and to what extent are local priorities considered vis. national or even international prior ities?)

Incentivising private sector involvement (Are there any specific climate finance initiatives to incentivise private sector involvement?)

5

Private operators and infrastructure owned by municipal, operated by private operators like leasing. Also tariff structure. Increase of tariff collection. From conservancy tax, property tax. ADB helped to develop tariff structure.

Phased approach, look at bankable projects that can be scaled up. So urban areas are more bankable and demand led. Most urban projec ts have water issues. But private sector in adaptation still challenging. Urban areas have high investors, but not rural. And also government is not motivated.

Climate finance to water security

Data/initiatives (Is there any climate finance allocated to water security projects, and if so, how much money is allocated to them? How are these water security projects identified, and what has made them eligible? Are you confident that climate finance will adequately address these issues?)

1

Intervention needs to be based on considering 3 phases: o Pre-disaster:

Early warning systems Evacuation to cyclone shelters Stock of food, drinking water, and medicine

o Post disaster



WASH infrastructure is also very affected by these disasters. People in recovery think about recovering their livelihoods before other investments including in WASH. Need to rehabilitate infrastructure

Need to ensure good extension facilities. Need the right financing for different needs (Grants, government, private sector for microfinance) and all depends also on demand level for the services and affordability.

There is a Community Climate Change Programme funded by the WB (BKSF) that supports 250 microfinance institutions in the country. http://www.pksf-cccp-bd.org/about-us.html - Microfinance is not effective in pre-disaster, but it does seem to work for post-disaster events. It provides soft loans to people to restore their livelihoods. Not enough though, as it only covers the ‘financial’ part of the livelihood theory, and also the social pa rt to some extent. The government and other institutions should help cover the other areas. In addition, also the microfinance institutions are affected by these disasters. They need to write off debts, and also provide new financing every time.

2

Solution: promoting mung beans as they need less water. Maize can grow in flood submerged areas. In salinity, watermelon can be an option, sunflower also.

Largest intervention is now on various water options: pond excavation, modern technology of river technology, rainwater harvesting, and pipeline water supply. All these priority of CDMP to deal with vulnerability.

3

Many projects are not linked to CC formally, but maybe informally. They have done a study on national budget to see how much goes to WASH and it’s difficult to identify.

Not much on water security and CC - one dedicated programme to deal with scarcity of safe drinking water for coastal areas. To provide water solutions to people and raising their awareness. Not exclusively on water, comprehensive approach of also sanitation and hygiene practi ces. WA advocating for progressive tariff system for water, taking from example on electricity. In slums, people would share a meter and get charged the max. In water, not even a meter system, apart from some limited examples. Rainwater is best solution but difficulty to preserve it after 3-4 months and also social norm is not to drink rainwater unless it's compulsory.

4

Need to find areas to protect in terms of water.

No allocation though. Allocate based on project. There is some assessment but no mechanism to control the use or to see whether they have crossed the limit, could be a threat for sectors.

Cl finance and water? Already doing a lot. Methane from and alternative wetting and dry. But in reality it's water and energy. E.g. Cook stove. Improved cook stove 27/30% biomass saved. Also huge co benefits in terms of health. And also cost reduction. The carbon emission is the main benefit. Bu t sometimes do not claim the benefit. Already adaptation in coastal areas, and afforestation, but not claimed.

These are the areas where there is a climate component and cl finance should cover. Should do a baseline with needs and finance gaps. So government and international finance can work together.

Initiatives - for MoEF first approach is avoiding pollution. Saline tolerant varieties, avoid using groundwater and use more surface water, afforestation, and global mitigation

http://www.pksf-cccp-bd.org/about-us.html

http://www.pksf-cccp-bd.org/about-us.html



5

Transboundary issues? Not anything on water. Energy yes and also transport. Mainly focus on urban municipal and cities on water security. Also have heritage management projects that are regional, v small water component.

Integrating of municipalities and cities where they address WASH and also solid waste management. Water security try to address. And also coastal towns. Global trust fund used in new projects to address resilience and water supply.

Water- global climate fund. WASH interventions there. Cl vulnerability in design to see what change would be. Mostly designed on 50 years cl effect. Water security- ADB has pillar is inclusive growth. Come up with different options.

PPP approach in most water supply and sanitation. To address maintenance issues in water supply, solid waste, and sanitation. Als o replicated in other countries like Sri Lanka, India, etc. Integrated urban projects with roads, sanitation centres, etc. look at what is needed and available, willingness to pay for services.

6

Water supply and sanitation is central, not an add-on. Strong water team as portfolio on water is large. See CC not as an add-on either and the focus is how to mainstream CC in operational work.

Also they have a new policy commitment to screen all operations in all sectors to ensure that CC and impacts are addressed very early on including at the planning stage. They have risk screening tools to see impact.

Line ministries need to take a step too, supported by UNDP and planning commission to look into CC when plans are supported by government.

WB supports urban and rural programmes and the water development board. Smaller procurement projects so potentially more challenging.

8

Relation with CC. All projects need to be climate proofed, but not working directly with PPCR. Cl resilience fund not looked at because they already have enough money on their own. So could partially explain why climate finance doesn't support WASH.

Climate Resilience Trust Fund - WB not trustee anymore also because it's a small amount of money for the WB.

On DRM and CC, one project on embankment is PPCR, looking at dynamics of coastal regions.

The WB is looking at gaps in water sector. Coverage is high but quality of coverage needs to be improved. Mapped hard to reach areas for long term sustainability. Bank does very large scale projects bringing different technologies.

Mainly on sanitation not much on water. Develop technology considering climate. Not v successful in coastal compared to drought prone areas.

Sanitation is small component for the bank. Now looking at financing others otherwise disbursement levels of bank won't be hi gh enough. Sanitation is 100 dollar loan to household through microfinance provided by ASA (http://www.asa.org.bd/).

The WB component is composed of: tech development; private sector capacity building to design and test ideas and work with small entrepreneurs; and linking them with financing institutions (WB doesn’t provide loans, ASA does. WB does evidence based advocacy also with NGOs and provides them with tech assistance).



National/subnational (At what level of government are funds being spent and to what extent are local priorities considered vis. national or even international priorities?)

Incentivising private sector involvement (Are there any specific climate finance initiatives to incentivise private sector involvement in water security? )

2

Disaster is management of risk, so looking at insurance. Need to manage investment and protect it from disasters.

Private sector are operating but in sanitation mostly. Opportunities in: o Bottled water, communities can get water and sell. It is already happening in areas where there is osmosis. o Agriculture sector need to find new variety, saline resistant varieties. o Focus on renewables. o Pond water is most cost effective method. Need to look at different options. o Work with soil health, bio fertiliser to change salinity. But problem, investors are inviting saline water. Need to look at total costs and benefits

of salinity.

3

Not very commercially viable to attract private sector and also government response is inadequate. So NGOs take it on. But there is need for three party involvement, public private and NGOs. Without private sector cannot sustain solutions. And cannot scale up.

Private sector in coastal areas where there is river osmosis. Also water purification industry. But investment is not adequate to promote it, so public sector needs to encourage.

CSO- need to be involved for sake of governance to ensure equity and justice.

Policy recommendations (What is the level of progress on the GCF and what are your views on the attention paid to grants vs loans? What are your key recommendations for the GCF? What are your key recommendations for the Financing for Development Conference?)

2

It is important to mainstream disaster and climate change. To ensure sustainability it is fundamental to go over project by project situation and focus on education by inserting CC and DRM in school curricula and by training teachers. There are different courses (climatology, oceanography, disaster education also in different disciplines such as public health, human security, sociology, disaster science and management). It is also important to train the NGO sector.

Problem is not CC but vulnerability-number of population, poverty, sectors (manufacture, but agriculture is still absorbing max number of people so vulnerable).

Water Aid very important in urban and rural.

Water not focus. Energy, agriculture is more focus because of business perspective. Not from vulnerability aspect.

If poverty level is 2 dollars/day, 60% are below this line and will not be able to afford drinking water. In Bangladesh a large proportion of diseases is related to water contamination.



For Security: water quality and availability is most important while for food security it is least important.

Plans: 100 percent sanitation, focus on toilets. Less important is water.

NGOs, civil society needs to focus on this. Need to invest. Align with development activities.

3

Need to consider multi sectoral demand. Rice is staple and requires high consumption of water. And demand will rise with high increase in population. Challenge needs to be viewed as energy food and water nexus.

WA are doers, difficult to integrate science. Need to capture knowledge. Difficult for a doer organisation. Potential to advocate outside. Positioning itself as an organisation on water and climate change needs a lot of thought. Not easy to capture everything in one framework and at the s ame time addressing the country specific challenges. How is the water security issue taken up? Is it to secure safe drinking water at the household level, regional? If transboundary can WA add any value to the political discussions?

Water security is concern but more awareness and change in mind-set. Need more info on future scenario, how much uncertainty are we talking about. Also advocacy points need to be spelled out clearly

4 Look at how to link government and international financing. First recognise government and country element and then support.

5

Bangladesh is country where all CC funds provide a lot of learning opportunities. CC should be learning by doing. In implementation good and bad things are useful. In that way the country will be ready. As they have experience to manage three large funds they have capacity to deli ver also on CC. Also deliver more community driven projects compared to other countries and are successful in inclusive growth.

It's time for donor countries to make firm commitments but need still to work on areas. Also good press freedom so strong safeguards.

Loans vs grants? Highly concessional loans of 1 percent and 40 years grace period as need money for development. Fine for CC. Incremental cost of climate proofing. Can use grants for climate proofing and concessional loan for original infrastructure development.

6

Similar to GEF and adaptation fund, so NIEs go through accreditation process. It is possible that they will start through mul tilaterals to kick start implementation, but then will be left to govt.

Water projects are more difficult to implement in the rural areas. Work with associations and water user associations. And everyone would be under pressure to deliver.

Core development issues should not be forgotten, CC is a part of these and adds to challenges. It shouldn't be a focus on getting funds and then maybe reshaping the needs. Need to tune down the hype as GCF will not solve all issues, need to be realistic as have core development issues to address. So mainstreaming CC in operations is the way to go. As it's not a huge amount of money.

On future architecture, donors don't know. There will always be bilateral programmes, but CC finance should not be marked as normal ODA but new and additional. Cl finance will address some of the aspects, but it doesn't make sense to do cl imate change projects just for the sake of it.



How to make development more climate smart should be a focus area of climate finance!

7 Bangladesh highly praised by international arena on DRM. Cl change is one kind of disaster. Learnt a lot from previous disasters to go to cl change.



Annex D Summary of follow-up interviews

Dr Arif Faisal – Environment Specialist, Asian Development Bank

1. To your knowledge, what proportion of overall climate finance funds have been disbursed (and what

proportion of this is for water security)? What do you consider are the main blockages to climate funds

being disbursed according to project timelines?

“This is a bit difficult to answer. Overall, there is not that much difference in disbursement rates between climate

finance and development funds (i.e. ODA).”

“Delays are very common at the beginning of a project – with disbursements beginning 1-2 years after the

project is approved. Initial delays are related to the drafting of different plans (e.g. procurement plan, gender

action plan, etc.), the recruitment and mobilisation of consultants, and land acquisition (where needed), among

others.”

“There are 3 main funds in Bangladesh: the BCCTF, BCCRF and PPCR. According to people in the sector, all

of the funds for the BCCTF have been disbursed (i.e. ‘the pot is dry’) and they are now searching for alternat ive

sources of funding. I have no knowledge of the disbursements for the BCCRF, but the WB should know

(although it seems that a lot of money has already been disbursed). Finally, around 20% of the PPCR funds

should have been disbursed, but I do not have an exact figure. Either project directors or managers should be

able to give more accurate information about disbursement amounts. The disclosure of these amounts may

take some time as PDs or PMs need to verify the amounts internally. Some disbursement reports should be

available online, but only for recent periods.”

“Other key blockages for disbursements are related to transparency, compliance issues and contractual

obligations (e.g. adequate monitoring and general project management). Indeed, the latter is a key determinant

of funds disbursement.”

2. How would you assess the absorptive capacity of your country? Are you aware of any funds/support

available to enhance institutional capacity to spend climate funds? Are you planning to access climate

funds for this purpose?

“Absorptive capacity is also determined by project management issues, procurement, auditing, anti-corruption

initiatives, etc.”

“How can you know how much capacity building is required? There is some spending on capacity building, but

sometimes this is too much. There should be a limit to capacity building or more innovation as to how this is

done – capacity building is only effective if the right people are trained. Capacity building should also be

designed to have long-term effects and should be linked to giving access to high level education (e.g.

accounting, finance, etc.). Many donors are investing in capacity building, but this has not necessarily been

very useful.”

“Some institutions have a lot of good capacity, e.g. sound accounting and procurement systems, but this

capacity varies widely across governmental agencies and ministries.”

“Staff rotation is indeed an issue. Bangladesh still follows the colonial system of government, making rotation

across ministries and agencies very common. With the exception of certain departments (e. g. Dept. of

Meteorology), people are not kept in technical areas. Loss of institutional memory is high, and capacity built in

one area may not be easily transferred to another.”



“Another important challenge is project implementation. Project design and imp lementation capacity (i.e.

management) is currently at mid-level. We are currently encouraging that project directors stay for 4-5 years

to allow them to archive all their projects and ensure their sustainability.”

“There are no other main issues – Bangladesh has received good support so far. Government and partners

are currently working on establishing all the structures needed to access the GCF.”

3. In the future, how do you plan to capture additional climate funding? What information will you use to

determine the type and location of climate projects to put forward?

“The government has chosen ERD as the NDA for the GCF, and is also setting-up the NIEs – these should be

ready within 2-3 years. The Local Government Division (LGD) is also doing capacity building – generally, the

current government is very supportive of climate-related development and investments.”

“Donors are very active on the climate agenda, e.g. USAID, DFID, WB, ADB, etc. GIZ is currently investing

4.5m EUR to increase the government’s capacity to access international climate funds. However, it has been

very difficult to work in a harmonised way across donors and with the government. This is essential to capture

funding in the future.”

“Regarding the selection of projects and areas for investments, currently there are no climate vulnerabil i ty

maps or indices to allow for the identification of priority areas. This is the first thing to do (e.g. as Nepal has

done) before different projects can be put forward. UNDP is currently leading a national adaptation plan that

should encompass a climate vulnerability index. This plan should be aligned with the 5-7-years national

development plan.”

“Previous studies mentioned that around US $5 billion where needed to address climate vulnerabilities in the

country, but this is a very rough figure. For the PPCR, the identification of climate vulnerable areas was based

on the occurrence of cyclones, storms and floods, as well as on socioeconomic indicators (e.g. poverty

headcount). The NAPA was also considered to identify areas of priority.”

4. What are the critical elements needed to secure sufficient climate finance and use it effectively to

address water security issues in your country?

“Climate vulnerability in Bangladesh is mostly related to the water sector, e.g. wrong timing of water – monsoon

rains are becoming more irregular, increasing issues with salt intrusion in coastal areas, and low yield of

boreholes. This has a negative effect on both livelihoods and food security.”

“Agriculture is one of the main economic sectors, especially for the poor. Adequate irrigation systems are thus

needed to maintain the livelihoods of the most vulnerable. Hence, water security is a key issue to address.”

“Currently, most climate finance is spent on water-related activities, e.g. BCCTF funds many projects in coastal

areas. There are also several energy and mitigation projects, with many of them using significant amounts of

surface water resources (e.g. steel sector).”

Dr Saleemul Huq – Senior Fellow, International Institute for Environment and Development




“Climate finance information is very opaque; currently, it is impossible to get accurate information about

commitments and disbursements. Information about funds pledged and disbursed lays with donors and project

implementers – there are hundreds of databases but no consolidated information. He has a colleague from



iied who is currently working on this for adaptation. The objective is to build a publicly accessible database

with all this information to increase transparency.”

“There is a mechanism to identify climate finance from general development assistance led by a donor

consultancy group. This is not public domain.”

“Things do take longer than anticipated, which explains the delay in disbursements – once funds are pledged,

subsequent project / programme dynamics determine the speed at which funds are disbursed.”

“The climate change sector is no different than any other development sector – it experiences the same delays

faced with ODA, e.g. corruption, delays in ensuring systems are in place, etc.”



“NDA for the GCF has been designated and they currently selecting the projects to take forwards – project

selection should be finalised in 3-4 months.”

Bowen Wang – Visiting Researcher, International Institute for Environment and

Development




“There is not enough information to assess the amount of funds disbursed – government entities only report

on funds pledged but not disbursed.”

“Implementation time frames for international projects (i.e. within the BCCTF, BCCRF, PPCR) are likely to be

longer than time frames for national projects as the latter are aligned with annual budgets and plans.”

“Bangladesh is a unique case in that the country has received a significant amount of climate funding – other

countries are unlikely to have the same institutional and policy frameworks to capture and manage climate

finance. For example, the BCCTF has only been established for about 5 years, and in 2013-14, over 300

projects had been funded.”

2. How would you assess the absorptive capacity of your country? Are you aware of any funds/support

available to enhance institutional capacity to spend climate funds? Are you planning to access c limate

funds for this purpose?

“To provide a comprehensive assessment of the absorptive capacity of the country, a detailed analysis of the

allocation of domestic funds is needed.”

“Bangladesh has a good level of absorptive capacity, as it is one of the biggest countries in terms of the amount

of climate finance received each year. For example, to date the BCCTF has received around US $1 billion per

year. The PPCR in Bangladesh also has the largest pot of money (along with Cambodia). However, there are

still issues with government planning and procurement systems, e.g. transparency, accountability, monitoring.”

“Capacity building was one of the thematic areas of the BCCASP, including elements related to good

governance, procurement, etc. Capacity building is not only carried out by national structures but also by

international institutions, e.g. UNDP, USAID in the form of TAs for institutional building. Capacity gaps are also

being addressed in preparation for the GCF.”



“Prior to the GCF, the other major fund was the Adaptation Fund – this allowed countries to access climate

finance directly without intervention from multilaterals. Bangladesh applied twice but was never granted access

due to issues with transparency, financial integrity and procurement. Capaci ty building is thus imperative to

get access to the GCF. Partners are currently providing a whole package for readiness, which encompasses

6 different activities including strengthening of the NDA, general capacity building and institutional

development.”

3. In the future, how do you plan to capture additional climate funding? What information will you use to

determine the type and location of climate projects to put forward?

“It is necessary to differentiate between national and international climate finance. At a national level,

Bangladesh is currently developing a ‘climate fiscal framework’, with accurate budget codes for all climate

activities that should allow for finance tracking and for a better estimation of the amount of funding that will be

needed in the future. This framework should be in place at the end of this year or early next year. This will

increase the capacity of the country to mobilise funding and do better targeting.”

“At the international level, the process is confidential. However, the NDA for the GCF has been selected and

the country is currently in the process of selecting appropriate NIEs. The expectation is that 1 or 2 entities will

be accredited in upcoming months.”



“The most critical element to secure access to climate finance is capacity building – guarantees need to be

provided to ensure that money is spent responsibly and efficiently.”

Documents

Climate finance and water security - India Environment Portal finance and wat… · PPP Public-Private Partnership ... Bangladesh is located within the floodplains of three major