Getting Africa ready for the Green Climate Fund

Report prepared for Financing Climate Change: Africa’s Access to Convention Funds

3rd December 2012

two key concerns with current flows of climate finance to the continent

—they are too low given future needs

—they are too fragmented leading to a lack of country-ownership

the GCF may overcome both of these:

— recognition of the ‘urgent need’ in African states (and elsewhere) for adaptation and discussion of minimum floors

— the use of direct access in what may become ‘the main global fund for climate change finance’

The Green Climate Fund could represent a watershed in the flow of climate finance to AfricaThrough both increasing their magnitude and changing their modality

2Getting Africa ready for the Green Climate Fund

Source: CPI (2011), UNEP RISOE database and Vivid Economics/AfDB (2011) and (forthcoming)

Figure 1. Africa currently receives far less climate finance than it will require

0

10

20

30

40

50

60

Current flows Future needs

US

D b

illi

on

Adaptation Mitigation

There are two possible forms of direct access: ‘standard’ direct access and ‘enhanced’ direct accessThe Governing Instrument supports the former and asks the Board to consider the latter

3Getting Africa ready for the Green Climate Fund

Executing Body

FundManager

Implementing Body

FundManager

Executing Body

Implementing Body

Executing Body

FundManager

FundOversight

Implementing Body

Executing Body

EnhancedAccess

DirectAccess

MultilateralAccess

International Domain

NationalDomain

Source: Based on UNDP/ODI (2011)

Figure 2. Different forms of accessdirect access involves placing more responsibility for climate finance flows with national institutions

standard direct access involves the implementation body being national entity

— responsible for identifying, programming and monitoring and evaluating projects/programmes

— Adaptation Fund adopts this model

‘enhanced’ direct access also places funding decisions at the national level

— no climate fund currently adopts this model

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GCF?

1. act quickly to provide resources to support direct access

2. consider a more flexible approach to direct access where needed

3. explore opportunities to support existing funds that support climate change activity through direct access

4. provide a minimum floor allocation to direct access

5. allow for NIEs already accredited under the Adaptation Fund to be ‘passported’ to the GCF

6. ensure that accreditation and project cycle processes are quickly developed, transparent and well-understood

7. allow for accreditation applications in a variety of languages

Seven actions/options for the GCF Board to promote African access to the GCFEspecially through direct access

Getting Africa ready for the Green Climate Fund 4

5

1. prepare a credible, robust pipeline of funding opportunities

2. take early steps to create the infrastructure needed to access the GCF

3. build a cross-departmental dialogue on the opportunities provided by the GCF and direct access

Three actions for African countries

Getting Africa ready for the Green Climate Fund

1. support the capacity of African NIEs before and after accreditation

2. increase its attractiveness as a Multilateral Implementing Entity (MIE) for African partners

3. support the development of Africa-specific climate change and/or green growth action plans

Roles for the African Development BankThese might be key roles for the Africa Green Facility that the AfDB wishes to develop

Getting Africa ready for the Green Climate Fund 6

enhanced direct access could further promote country ownership and ensure that the GCF remains lean but creates new challenges in ensuring money is spent well

the GCF board may want to:

— identify the appropriate criteria for funding entities and determine the relationship between itself and such funding bodies

— a small grants programme could be used to trial this approach

African countries may wish to

— decide whether a national climate fund (NCF) is appropriate for its country

— ensure that their governance environment will provide confidence in an NCF

the AfDB (potentially through the AGF) can

— support capacity building efforts in NCFs

— provide trustee arrangements for NCFs

— co-fund projects and programmes with NCFs

Enhanced direct access offers more opportunities but also more risksIt is an, as yet, untested modality for climate finance

Getting Africa ready for the Green Climate Fund 7

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Getting Africa ready for the Green Climate Fund 8