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Mobilizing adaptation finance
The document outlines a framework for mobilizing adaptation finance focused on supporting micro and small enterprises (MSEs) to adapt to climate change through public sector investment. It discusses de-risking strategies, stakeholder engagement, and various projects aimed at enhancing climate resilience in vulnerable communities across different countries. It also highlights funding mechanisms, successes, and the criteria for accessing financial resources from the Green Climate Fund.
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Mobilizing adaptation finance
- 1. Mobilizing adapta.on finance UNDP-GEF April 2016
- 2. Mobilizing MSEs and private sector investments
- 3. ‘De-‐risking’ Framework for public sector support to catalyze private sector investment Theory of Change for Market Transformation Target Investor risk/return profile and barriers De-‐risking to reduce high financing costs (where risks are priced into financing costs) Financial de-‐risking Barrier removal Policy de-‐risking A potential approach to assess and select public instruments Stakeholder consulta.ons Risk & barrier assessment Iden.fica.on of public instruments Cost Benefit analysis Evalua.on De-‐risking instruments Direct support : financial incenGves
- 4. Suppor.ng MSEs to adapt to climate change Why focus on MSEs? EssenGal source of livelihoods for the world’s poor Highly vulnerable to climate impacts Limited capacity to assess and manage risks • Safeguard and adapt operaGons and processes to direct &indirect climate risks Climate resiliency of the businesses • New demand for technologies, products and services – spillover to enhance communiGes’ resilience New business opportuniGes related to climate change MSEs have flexible business models, can be responsive, and locally attuned – critical to resilient communities DRIVERS FOR MSE ADAPTATION in CLIMATE CHANGE Policies and regulation can be enablers of these drivers through compliance and incentives
- 5. Barriers and IntervenGons – Evidence from UNDP projects supporGng MSE Awareness, assessment, and management of climate risks; Assessment and availability of adapta.on op.ons; Financial capacity to implement; Technical capacity to implement; Policy and regulatory factors; Social aKtudes Climate informa.on and learning CAMBODIA Community based EWS on flooding/ drought events ZIMBABWE Weather staGons & custom rainfall forecast system Technical assistance, awareness, and training TANZANIA Broadcasts climate resilient agri pracGces NICARAGUA Planning and training on agrosilvopasto ral systems Policies and regula.on RWANDA NaGonal strategy for CC and LCD HONDURAS Water pricing reforms proposed – difficult to implement Market & business development TAJIKISTAN Pkging, cert., & labeling to mrkt adapGve produce CAMBODIA Govt. rehabilitated irrigaGon schemes to cover upfront costs Partnerships and coopera.ves COOK ISLANDS Tourism industry guidelines & stds. for CCA AFRICA PPPs to disseminate climate info & provide access to markets for rural pops. Financial instruments TAJIKISTAN Microloans for agro-‐ biodiversity enterprises ZIMBABWE Seed financing for businesses promoGng climate-‐ resilient seeds B A R R I E R S I N T E R V E N T I O N S & E X A M P L E S
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- 7. GEF objec.ve: Global Environmental Benefits LDCF/SCCF: Objec.ve: Adapta.on Benefits 142 GEF eligible countries GEF $ allocated to countries CC, BD, LD IW, CD, POPs, ODS, Hg Replenished on 4 year funding cycle (GEF-6 = >4 billion USD) UNEP World Bank UNIDO FAO IFAD AFDB ADB IADB EBRD WWF CI UNDP GEF Agencies TA for Project design and Implementation support PIF GEF has its own: Governance Trustees Policy and Programming Arrangements Project + fee for services
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- 9. Aims to financea paradigm shift towards low-emission and climate resilient pathways Is the largest single source of climate finance
- 10. GCF allocation framework Mi.ga.on Adapta.on SIDS, LDCs, Africa Other developing countries
- 11. Result areas MITIGATION • Increaselow emission energy access and power generation • Increase access to low emission transport • Reduced emissions from buildings, cities, industries and appliances • Reduced emissions form Land Use, deforestation, Forest degradation, SFM, conservation and enhancement of C stocks ADAPTATION • Increased resilience and enhanced livelihoods of the most vulnerable people, communities and regions. • Increased resilience of health and well being and food and water security • Increased resilience of infrastructure and the build environment to CC threats • Increased resilience of ecosystem and ecosystem services
- 12. Five investment priorities • Transforming energy generation and access – Renewables, energy efficiency, etc. • Creating climate-compatible cities – Urban resilient infrastructure, urban water supply, etc. • Encouraging low-emission and climate-resilient agriculture – Low-emission cultivation practices, resilient agricultural livelihoods, etc. • Scaling up finance for forests and climate change – Sustainable forest management, forest degradation/deforestation, etc. • Enhancing resilience in Small Island Developing States (SIDS) – Coastal zone adaptation, drinking water supply and management, etc.
- 13. Six high levelinvestment criteria Potential to catalyse impact beyond a one-off project or programme investment Potential to the achieve the Fund's objectives and result areas Beneficiary country ownership of and capacity to implement funded activities Economic and financial soundness of programme/ project; appropriateness of concessionality Potential to provide wider benefits and priorities - environmental, economic, social, gender Vulnerability and financing needs of the beneficiary country and target groups Impact Potential Paradigm Shift Potential Sustainable Development Potential Needs of Recipient Country Ownership Efficiency & Effectiveness
- 14. Open Discussion • What challenges do you face in your countries to mobilize adaptaGon investments? – Public Sector – Private Sector • What lessons learned/experiences can you share with others on effecGve approaches to mobilize adaptaGon financing? • How can the BMUB NAP Agriculture programme play a role in supporGng your country’s efforts to mobilize investments for adaptaGon in the agricultural sector?
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- 16. How do countriesaccess the fund?
- 17. Accessing the Fundfor Programming 20+ Accredited enGGes Any public or private enGty at naGonal, regional or internaGonal level approved by GCF Board following ‘fit-‐for-‐ purpose’ approach (project size/ E&S risk/investment type)
- 18. Projects and ProgrammeApproval Process Step 1 Call for funding proposals Step 2 Concept development Step 5 Board Decision Step 4 Analysis and recommendaGon to the Board Step 6 Legal arrangements for approved proposals Step 3 Submission of funding proposal
- 19. Key factors fora successful proposal • NDA engagement throughout the formulation process • Stakeholder engagement (women, indigenous/minority groups, private sector, CSOs/NGOs) • Very clear argument for climate change rationale (for adaptation) • Feasibility study • Social and environmental safeguards assessment • Sustainability and replication potential • Innovation • Sound economic and/or financial model
- 20. Current status • First8 proposals have been approved for funding ($168M) Country Focus Value ($ million) Type Public/ Private AE Malawi Livelihoods and EWS 12.3 CCA Public UNDP Maldives Water security 23.6 CCA Public UNDP Peru Wetland resilience 6.2 Cross- cutting Public Profonanpe (national) Senegal EBA in salinized lands 7.6 CCA Public CSE (national) Bangladesh Resilient infrastructure 40 CCA Public KfW Eastern Africa CC venture fund for EBA and off-grid solar 25 Cross- cutting Private Acumen (regional) LAC EE green bond 22 CCM Private IDB Fiji Urban water supply 31 Cross- cutting Public ADB
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