GEF Funding for Adaptation to Climate Change

1. GEF Funding for Adaptation to Climate Change Sub-Regional Workshop for GEF Focal Points Europe and CIS Dubrovnik, Croatia, 11-13 February 2009

2. Background on the GEF and Adaptation Four funding sources for Adaptation under the GEF GEF Assistance to Address Adaptation GEF Trust Fund UNFCCC climate change funds Kyoto Adaptation Fund GEF Trust Fund Strategic Priority on Adaptation (SPA) adaptation action with GEBs Least Developed Country Fund (LDCF) (implementation of NAPAs) NO GLOBAL BENEFITS Special Climate Change Fund (SCCF) Top priority to Adaptation NO GLOBAL BENEFITS Adaptation Fund (AF) Adaptation in KP developing I parties NO GLOBAL BENEFITS Total: $180M Total: $100M Total: $50M Estimate $80-300 million/year

3. “Piloting an Operational Approach to Adaptation” (SPA) SPA Projects should: “Show how adaptation planning and assessment can be practically translated into projects that provide real benefits”. • SPA Projects should primarily target Global Environmental Benefits under the GEF focal areas, whereas the other GEF administered fonds have development as their primary focus. • $50 million allocation  as of October 2008 all funds have been allocated  following an internal evaluation of the pilot, the program will evolve. • A total of 21 adaptation projects have been approved for support through the SPA.

4. “Piloting an Operational Approach to Adaptation” (SPA) • 23 Approved projects – Total $50 million • Once pilot is completed the SPA will be reviewed and potentially replenished by the GEF Council decision. • Primarily targets Africa, South/Southeast Asia and Latin America, but also a few projects in Central and Eastern Europe.

5. Least Developed Countries Fund (LDCF) LDCF projects support the implementation of National Adaptation Plans of Action (NAPAs) which identifies ‘urgent and immediate adaptation needs’ in each LDC. • The LDCF has so far supported the preparation of NAPAs in 47 LDCs and will also support implementation of priority actions identified in completed NAPAs. • As of October 2008, 38 NAPAs have been completed, and 25 implementation projects have been approved for LDCF funding. • Existing resources, including new pledges: $180 million  applying a principle of equal access this translates into roughly $4 million pr. country.

6. Least Developed Countries Fund (LDCF) Least Developed Countries Fund (LDCF)

7. Special Climate Change Fund (SCCF)- Top priority under UNFCCC decision = (a) adaptation SCCF adaptation projects support the implementation of adaptation actions in non-annex I parties. • Priority areas: water, land management, agriculture, health, infrastructure development, fragile ecosystems, integrated coastal zone management, disaster risk management and prevention • Total resources under the SCCF program for adaptation, including new pledges: $100 million. • Demand greatly exceeds available funding, forcing a temporary freeze for new SCCF projects. • As of October 2008, 15 projects have been approved for support under the SCCF. Future funding opportunities depend on donor contribution.

8. Special Climate Change Fund (SCCF)- Top priority under UNFCCC decision = (a) adaptation Special Climate Change Fund (SCCF)

9. Adaptation Fund (AF) AF will support adaptation projects in developing countries. • Details regarding priority sectors, eligibility criteria and administrative processing of AF projects, will be determined during upcoming Adaptation Fund Board meetings. • Unlike the other GEF administered funds for adaptation, eligible countries will be able to access funds directly without having to go through an implementing agency. • To be funded by 2% levy on Clean Development Mechanism (CDM) projects and voluntary donor contributions. • UNFCCC estimate of available funding for period 2008-2012: $80-300 million/year.

10. Features of Adaptation Funds GEF TRUST FUND: (SPA) • Incremental cost • Global benefits • RAF • Co-financing UNFCCC FUNDS: (LDCF & SCCF) • Additional cost • Sliding scale (optional) • NO RAF • NO Global benefits • Different approach to co-financing

11. Features of Adaptation FundsAdditional costs/Sliding Scale • Additional Cost - Definition: the costs imposed on vulnerable countries to meet their immediate adaptation needs (Decision 3/CP.11) The additional cost approach includes: • A baseline scenario => what development activities would be undertaken also in absence of cc (baseline costs) • An adaptation scenario => which includes additional activities to be implemented to address the adverse impacts of climate change in the vulnerable sector selected for the project (baseline costs + additional costs) • The LDCF will finance only the additional costs imposed on vulnerable LDC countries to meet their (urgent and immediate) adaptation needs, as identified by their NAPAs.

12. Features of Adaptation FundsAdditional costs/Sliding Scale • Sliding Scale: An OPTION introduced to simplify the determination of additional costs, especially for smaller projects. • Instead of determining additional costs through a complete baseline/alternative scenario analysis, additional costs are estimated as a percentage of total project funding request, with the LDCF/SCCF funding a proportionately larger share of smaller projects, and a smaller share of larger projects (with the remaining funding to be leveraged in co-financing). E.g. under the SCCF the steps are: <$1mil – GEF 50%, $1mil-$5mil – GEF 33%, >$5mil – GEF 25%.

13. Features of Adaptation FundsCo-financing • Co-financing:The full cost of adaptation is always covered by GEF/LDCF/SCCF. ‘Co-financing’ may therefore be better termed ‘existing (baseline) financing’ for the additional cost to be covered by GEF/LDCF/SCCF. • Co-financing refers solely to funding already present in the recipient countries in the form of existing multilateral development financing, national investments etc, no additional funds need to be raised for the purpose of adaptation. • Stand alone adaptation financing (full cost) is also accepted. In practice, however, this will be very rare, as most LDCF/SCCF projects and activities are usually based in a context of human and socioeconomic development with an added element of CC adaptation.

14. THANK YOU FOR YOUR ATTENTION! GEF Adaptation-related papers: www.thegef.org GEF projects database: www.gefonline.org