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International climate finance architecture

WACDEP Global Technical Coordination Workshop

Regional Days 2014, Port of Spain - Trinidad

Maika Mueller, WACDEP Programme Assistant

Tuesday 24 June 2014

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1. Objectives• What is the current climate finance landscape?

• What are the access modalities to climate finance?

• How does the project cycle for funding requests look like?

• What are the opportunities available for building water security?

• How can GWP access these funds?

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2. Overview

UNFCCC COP & CMP

GEF (e.g.SCCF,

LDCF)

Adaptation Fund

Green Climate Fund

GEF AgenciesMultilateral

Implementing Agencies

National Implementing

Agencies

Programme Countries

Multilateral Funds

Bilateral Funds

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2. Overview

UNFCCC COP & CMP

GEF (e.g.SCCF,

LDCF)

Adaptation Fund

Green Climate Fund

GEF AgenciesMultilateral

Implementing Agencies

National Implementing

Agencies

Programme Countries

Multilateral Funds

Bilateral Funds

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3. Global Environmental Facilities (GEF)•Established in 1991 to provide grants for projects for biodiversity, climate change, international waters, land degradation, the ozone layer, and persistent organic pollutants•Provided USD 12.5 billion in grants and leveraged USD 58 billion in co-financing for 3,690 projects in 165 developing countries•GEF administers the LDCF and SCCF

Recently: GEF launched new strategy (GEF2020) – pledged USD 4.43 billion over next four years

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3.1. The Special Climate Change Fund (SCCF)

• Established in 2001 (COP 7) to support adaptation and technology transfer in all developing country parties to the UNFCCC

• Two active funding window: Adaptation window (USD

201.75 million/50 projects) and Technology Transfer window (USD 40.50 million/ 8 projects), (66 countries in total)

• Adaptation activities: water resources management, land management, agriculture, health, infrastructure development, fragile ecosystems, and coastal zone management

• Recently: Scope expanded to non-LDCS to support preparation of NAPs process

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3.2. SCCF Distribution

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3.3. Least Developed Countries Fund (LDCF)

•Established in 2001 (COP 7) to finances the preparation and implementation of NAPAs/NAPs in response to urgent and immediate adaptation needs in LDCs•Strengthening Climate Resilient in sectors/resources such as water; agriculture and food security; health; disaster risk management and prevention; infrastructure; and fragile ecosystems•To date, 51 LDCs have accessed USD 12.20 million •Recently: Scope expanded to non-LDCS to support preparation of NAPs process

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3.4. LDCS Distribution

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3.5. Access Modalities and Project Circle

The application for funding has to be submitted through a selected GEF Agency (ADB, AFDB, EBRD, FAO, IDB, IFAD, UNDP, UNEP, UNIDO, World Bank)

LDCF/SCCF differentiate between two ways of funding request:

1. Full-sized Projects (FSP) (over USD 1 million)

2. Medium-sized Project (MSP) (as of or above USD 1 million)

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3.6. Criteria for Approval

1.Basic project idea: Business-as-Usual (BAU) development for the targeted sector, climate change vulnerabilities and specific adaptation activities

2.Project response to country priority: identified in national communication, programmes, policies, NAPA/ NAPs

3.Implementation setup: Who will implement the project and how?;coordinated with related projects to avoid duplication?

4.Indicative budget and co-financing

5.Monitoring and Evaluation Framework

6.Strategic Results Framework

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4. The Adaptation Fund (AF)•Established in 2007 to finance the full costs of country-driven adaptation projects/programmes to increase climate resilience•Projects focus and distribution of funds:

water management, agriculture and food security (19%/18%), disaster risk reduction (13%), coastal zone management (12%)•To date, USD 225 million provided for 34 countries

Recently: new fundraising target of USD 80 million for 2014/2015

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4.1. Adaptation Projects under AF

Adaptation project/programme is defined as a set of activities aimed at addressing the adverse impacts of and risks posed by climate change•produce visible and tangible results on the ground by reducing vulnerability•increase the adaptive capacity of human and natural systems to respond to the impacts of climate change•at community, national, regional and transboundary level

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4.2. Access Modalities

1. Direct Access: • Developing countries can nominate domestic institutions for

accreditation as NIEs • Endorse proposals from their countries, and direct recipients of

funding

2. Regional Implementing Entities (RIE)• Countries can submit project proposals through officially registered

RIE

3. Multilateral Implementing Entities (MIE)• International Organizations (UNDP, WMO, AfDB, Worldbank, etc.)

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4.3. Project Circle

Similar to LDCF/SCCF adaptation activities are differentiate between two categories:

1. Small-size projects/programmes (up to USD 1 million);

2. Regular projects/programmes (over USD 1 million)

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5. Green Climate Fund (GCF)•Fund will plays a key role in channeling “a significant share of new multilateral funding for adaptation projects”•Expected to be fully operationalized by end of 2014•Precise volume of finance is still unclear •50:50 balance between mitigation and adaptation•Should build on experiences and lessons learned from the CIF,GEF, AF, UNFCCC programmes (indicators, tools, procedures)

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5.1. Initial Results Management FrameworkParadigm shift towards to “increased climate-resilient sustainable development”

Four strategic-level impacts:

1. Increased resilience and enhanced livelihoods of the most vulnerable people, communities and regions;

2. Increased resilience of health and well-being, and food and water security;

4. Increased resilience of infrastructure and the built environment to climate change threats; and

4. Improved resilience of ecosystems. Align with country-priorities identified in NAPs process

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4.1. Initial Results Management Framework

Project/programme level outcomes for adaptation:

1) Strengthened government institutional and regulatory systems for climate-responsive development planning;

2) Increased generation and use of climate information in decision-making;

3) Strengthened adaptive capacity and reduced exposure to climate risks;

4) Strengthened awareness of climate threats and risk-reduction processes;

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5. How can GWP access these funds?• All funds provide funding windows for projects aim at

strengthening climate resilient in the water sector

GEF - LDCF/SCCF:• UNDP/ GEF and GWP signed MoU to collaborate on

climate change adaptation under GSP-NAP

AF:• Raise funding through RIE and MIE (UNDP)

GCF: • GWP is accrediated as observer. Next step: accrediation

as an Implementing Agency

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6. Discussion

• What are your experiences with raising funds? What have RWP done in this field?

• What are challenges/ bottlenecks you experience?• How can GWP maximize opportunities and move

forward?

More information: www.climatefinanceoptions.org