Mobilizing adaptation finance

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Mobilizing adapta.on finance UNDP-GEF April 2016

Transcript of Mobilizing adaptation finance

 Mobilizing  adapta.on  finance    

UNDP-GEF April 2016

Mobilizing  MSEs  and  private  sector  investments  

‘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  

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

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  

agrosilvopastoral  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    

 

BARRIERS

INTERVENTI

ONS

&

EXAMPLES

Mobilizing  GEF  Funds  

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

Mobilizing  GCF  Funds  

Aims to finance a paradigm shift towards low-emission and climate resilient pathways

Is the largest single source of climate finance

GCF allocation framework

Mi.ga.on   Adapta.on  SIDS,  LDCs,  Africa  

Other  developing  countries  

Result areas

MITIGATION •  Increase low 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

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.

Six high level investment 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

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?  

Annex

How do countries access the fund?

Accessing the Fund for 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)  

Projects and Programme Approval 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  

Key factors for a 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

Current status

•  First 8 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

Thank you