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Financing Adaptation under the GEF Adaptation Program

Financing Adaptation under the GEF Adaptation Program. Bangkok, June 2013. GEF AT A GLANCE. L argest public funder of projects to improve the global environment.

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Financing Adaptation under the GEF Adaptation Program

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  1. Financing Adaptation under the GEF Adaptation Program Bangkok, June 2013

  2. GEF AT A GLANCE • Largest public funder of projects to improve the global environment. • GEF provides grants for projects related to biodiversity, climate change, international waters, land degradation, the ozone layer, and persistent organic pollutants. • Provided $11.5 billion in grants and leveraging $57 billion in co-financing for over 3,215 projects in over 165 developing countries and countries in transition . • Through its Small Grants Program (SGP), the GEF has also made more than 16,030 small grants directly to civil society and community based organizations, totaling $653.2 million. • For more information, visit www.thegef.org.

  3. Background on the GEF and Adaptation GEF Assistance to Address Adaptation Secretariat services for the AF provided by GEF on an interim basis. GEF Trust Fund UNFCCC climate change funds Kyoto Adaptation Fund Adaptation Fund (AF) Adaptation in KP developing I parties NO GLOBAL BENEFITS Least Developed Country Fund (LDCF) (implementation of NAPAs) NO GLOBAL BENEFITS Special Climate Change Fund (SCCF) Top priority to Adaptation NO GLOBAL BENEFITS GEF Trust Fund Strategic Priority on Adaptation (SPA) adaptation action with GEBs Estimate $80-300 million/year Total: $534M Total: $241M Total: $50M *As of May 31, 2012

  4. LDCF and SCCF Two Convention Funds on adaptation managed by the GEF Why finance adaptation? • Convention guidance • GEF Trust Fund does not support adaptation under GEF-5 Purpose • Bridge time between now and the launch of the new financial architecture under the Climate Convention • Mobilize scaled up and predictable resources

  5. Mandate & COP Guidance – LDCF(Decisions 7/CP.7; 28/CP.7; 3/CP.11) • LDCF established under UNFCCC at COP7 2001, managed by the Global Environment Facility (GEF) • Addresses the special needs of the Least Developed Countries (LDCs) • Priority: to finance the preparation and the implementation of NAPAs • NAPAs  identify “urgent and immediate needs” •  specific guidelines provided by the Least Developed Countries Expert Group (LEG) • LDCF operational guidelines developed consistent with specific guidance COP11

  6. Mandate & COP Guidance – SCCF(Decisions 7/CP.7; 5/CP.9) • SCCF established under UNFCCC at COP7 2001, managed by the Global Environment Facility (GEF) • 4 different windows, financing through 2 so far: • Adaptation • Transfer of technologies (for adaptation and mitigation) • Energy, transport, industry, agriculture, forestry, and waste management • Economic diversification Top Priority!

  7. LDCF and SCCF: Main Features LDCF and SCCF are Voluntary Funds LDCFsupports the special needs of the LDCs under the Convention: Preparation and implementation of National Adaptation Programs of Action (NAPAs) • streamlined project cycle, sliding scale • equitable access • ongoing dialogue and training workshops with LDCs SCCF finances two programs: • Adaptation • Technology Transfer

  8. GEF AND RESILIENCE • GEF, through LDCF, SCCF and SPA : • The most comprehensive and the most advanced global portfolio of adaptation projects and programs • More than 170 interventions in more than 110 countries.

  9. GEF Climate Change Adaptation Program Goal: To finance concrete adaptation actions that increase resilience to climate change of vulnerable countries

  10. LDCF and SCCF at a glance Tangible adaptation measures in all key development sectors , from agriculture and water resources management to urban infrastructure, public health and tourism. LDCF funding by sector SCCF funding by sector

  11. Status of Funds (March 31, 2013) • LDCF: • Total approvals: $481.7 million • Total commitments: $205 million • Disbursements to IAs: $132 million • ($73 million) • SCCF: • Total approvals: $231 million • Total commitments: $147 million • Disbursements to IAs: $107 million • ($40 million) • Source: Status Reports of LDCF and SCCF, publicly available at: http://www.thegef.org/gef/meetingdocs/96/50

  12. Access to Resources – LDCF • Eligibility – all LDCs • (14 East Asia-Pacific countries) • Resources available per LDC: Equitable Access  Balanced Access • Ensuring funding for implementation will be available to all LDCs • No first-come, first-served • Upwardly moving ceiling per LDC • Currently at US $20 million per country

  13. Access to Resources – LDCF

  14. Priorities – LDCF • NAPA: Project/Program resources can be accessed after NAPA has been submitted • NAPA priorities guide eligibility of activities proposed

  15. LDCF: pledges and approvals • Total cumulative pledges, April 30, 2013: USD 605.13 million • Total received contributions:USD 585.52 million • NAPA preparation:USD 11.98 million;50 LDCs • NAPA implementation:USD 555.18 million;112 projects;46 LDCs; • USD 2.46 billion in total, cumulative co-financing

  16. Access to Resources – SCCF • Eligibility – all developing countries (i.e. non-Annex I) • Based on National Communications and other relevant studies • SCCF demand is much greater than supply of funding

  17. Convention Priorities – SCCF • Funding projects in following areas: (a) Water resources management; (b) Land management; (c) Agriculture; (d) Health; (e) Infrastructure development; (f) Fragile ecosystems (including mountain ecosystems); and (g) Integrated coastal zone management. • monitoring of diseases and vectors affected by climate change, disease control and prevention.

  18. SCCF: pledges and approvals • Total cumulative pledges, April 30, 2013: USD 258.86 million • Total received contributions:USD 239.98 million • SCCF Adaptation:USD 193.28 million for47 projects • SCCF Technology Transfer: • USD 26.64 million for 6 projects • Total co-financing:USD 1.51 billion

  19. LDCF and SCCF at a glance Tangible adaptation measures in all key development sectors , from agriculture and water resources management to urban infrastructure, public health and tourism. LDCF funding by sector SCCF funding by sector

  20. LDCF: portfolio at a glance • 70% Sub-Saharan Africa, 30% Asia-Pacific • USD 108 million (20%) to LDC SIDS • Agriculture (30%), water (17%), coastal (17%), climate information services (16%) • Focus on tangible adaptation measures: 70% to reduce vulnerability, transfer CCA technology

  21. LDCF: Expected results

  22. SCCF: portfolio at a glance • 30% Asia-Pacific; 27% Africa; 17% LAC; 14% ECA • USD 19 million (8%) to SIDS • Water (27%), agriculture (27%), coastal (15%), climate information services (8%) • Focus on tangible adaptation measures: 75% to reduce vulnerability, transfer CCA technology

  23. SCCF: Expected results

  24. Bhutan: Reduce CC-induced Risks and Vulnerabilities from Glacial Lake Outbursts in the Punakha-Wangdi and Chamkar Valleys LDCF/GEF $3.64M CC Vulnerabilities: • Glacial lakes reaches critical threshold as Himalayan glaciers melt  massive flashfloods in river valleys ↓ Adaptation Actions: • Increase disaster risk management capacity in affected valleys • Artificial lowering of water level in glacial lakes • Creation of an Early Warning System for glacial flashfloods ↓ Outcomes: • Decreased risk of massive destruction from glacial flash floods • Limitation of human and economic loss if/when catastrophic flash floods occur 24

  25. Congo DR:Building the Capacity of the Agriculture Sector in DR Congo to Plan for and Respond to the Additional Threats Posed by Climate Change on Food Production LDCF/GEF amount:: $3 M CC Vulnerabilities: • Increasing temperatures and shorter more erratic rainy seasons  Significant impact on primarily rain fed subsistence agriculture. ↓ Adaptation Actions: • Pilot measures implemented locally, including: • Diffusion of more drought tolerant varieties of maize, cassava and rice. • Demonstration of alternative and diversified climate resilient livelihood options (e.g. non timber forest products and fish farming) • Updating crop calendars and providing training to farmers on more climate resilient crop and soil management options (e.g. water conservation measures) • Creation of a drought early warning system and protocols for diffusion of climate information to farmers. • Training of provincial technical staff in relevant ministries on the integration of climate risks in the development of decentralized agricultural plans. Outcomes: ↓ • Increased food security and sustainable agricultural development 25

  26. Maldives: Integration of Climate Change Risks into the Maldives Safer Island Development Program LDCF/GEF amount:: $4.49 M CC Vulnerabilities: • More than 85% of country less than 1.5 m. above sea level + more than 70 percent of critical infrastructure within 100 m of shoreline  extremely vulnerable to sea level rise and increased cyclonic activity. ↓ Adaptation Actions: • Pilot measures implemented locally, including: • Development of climate resilient land use plans (e.g. reevaluate appropriateness of environmental protection zones and new infrastructure development), • Update drainage systems, • Restoration of natural ridge systems providing coastal protection • Training of key specialists dealing with land use planning, coastal zone management, coastal infrastructure development and land reclamation and assuring that climate change concerns is considered in key national policies governing such activities ↓ Outcomes: • Reduced impact of sea level rise on critical infrastructure and sustainable development 26

  27. What exactly do LDCF/SCCF finance? • Additional Cost = Full Cost of Adaptation • Adaptation in context of development • Cofinancing = Baseline Project = BAU Development

  28. What exactly do LDCF/SCCF finance? • Additional Cost = Full Cost of Adaptation • Adaptation in context of development • Cofinancing = Baseline Project = BAU Development

  29. Key Concepts • 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.

  30. SEA Projects – LDCF & SCCF (1/2)

  31. SEA Projects – LDCF & SCCF (2/2)

  32. What is the Process for Funding? • Role of Country: Operational Focal Point • Role of Implementing Agency • Choice of Financing Modality • GEF Agencies are responsible for p • Project Cycle

  33. Operational Focal Points (OFP) • OFPs endorse project proposals, confirming that these are consistent with national plans and priorities • In order to be reviewed by GEFSEC, a signed Letter of Endorsement from the OFP should be attached to each project proposal • OFPs facilitate national consultations, execution, as well as the coordination of LDCF/SCCF projects and programs • OFPs support M&E and knowledge sharing at the national level

  34. GEF Agencies • 10 Multilateral Agencies • GEF Agencies are responsible for preparing and submitting project proposals for review and approval by GEFSEC and the LDCF/SCCF Council – as driven and endorsed by the recipient country, and in collaboration with CSOs and other stakeholders • Once a project proposal is approved, the Implementing Agency (IA) is responsible for its preparation, implementation, M&E, and performance • IA is responsible for submitting annual Project Implementation Reports (PIR), Mid-Term Reviews (MTR) and Terminal Evaluations (TE) to GEFSEC

  35. Financing modalities • Full-sized projects (FSP)– requesting financing above $2 million. Approved by the LDCF/SCCF Council • Medium-sized projects (MSP)– requesting financing up to $2 million. Approved by the GEF CEO through a single step or two steps • Programmatic Approach (PA) – a program of projects with common objectives, aiming to achieve economies of scale and sustainability, improved horizontal and vertical integration, and greater opportunities to leverage partnerships and co-financing. Delegation of project approvals to eligible Agencies, such as the MDBs • Enabling Activities (EA)– NAPA preparation under the LDCF. Approved by the GEF CEO through single-step procedure. Direct access an option for EAs in GEF-5

  36. Project cycle for FSPs: identification • The country in collaboration with the IA and other relevant stakeholders drives the development of the project • . The IA develops and submits a Project Identification Form (PIF) to GEFSEC. A Project Preparation Grant (PPG) may also be requested at this stage. • GEFSEC reviews the PIF within 10 business days. Once recommended by the Program Manager (PM) and cleared by the GEF CEO, the PIF is web-posted for review and approval by the LDCF/SCCF Council (in the case of the LDCF) or included in a Work Program for Council Approval (in the case of the SCCF) • If a PPG request has been approved, PPG is released upon Council Approval

  37. Project cycle for FSPs: preparation • Project preparation to be completed in a timely manner – no later than 18 months after Council Approval of PIF. Request for CEO Endorsement (CER)submitted to GEFSEC • GEFSEC Reviews CER. Once recommended by PM and endorsed by GEF CEO, the project is ready for implementation • CER may be circulated for review by the LDCF/SCCF Council if (i) this has been requested at PIF Approval, or (ii) major changes to the project scope, approach or financing have been made

  38. PIF: key considerations • Eligibility: is the country eligible for financing under the LDCF/SCCF? • Country-drivenness: is the proposal endorsed by the OFP, consistent with national plans and priorities (NAPA, National Communications, PRSP, etc.)? • Baseline project(s) and co-financing: are the baseline project(s) and the problem(s) they seek to address clearly described? • Additional cost reasoning: are the activities proposed for LDCF/SCCF financing based on additional cost reasoning?

  39. Project cycle for MSPs TWO STEPS • If a PPG is requested, PIF approval is required. MSP PIFs are approved by the GEF CEO. Project preparation completed and Request for CEO Approval (CAR) to be submitted no later than 12 months after approval of PIF. ONE STEP • If no PPG is required, CAR may be submitted directly for review and approval by GEFSEC and GEF CEO

  40. Programmatic Approaches • PAs submitted by Qualified GEF Agencies (QGA): • Program Framework Document (PFD) submitted for GEFSEC review and CEO clearance. Posted for review and approval by the LDCF/SCCF Council (in the case of the LDCF) or included in a Work Program for Council Approval (in the case of the SCCF) • Once PFD is approved, QGA approves the project concepts that form part of the program following its own internal procedures • Upon preparation, CARs/CERs are submitted to GEFSEC for CEO endorsement (FSPs) or approval (MSPs) (no later than 18 months after Council Approval of PFD)

  41. CER/CAR: key considerations • Alignment with PIF: is the proposal sufficiently close to what was approved at PIF? Does it clarify and elaborate on the PIF, as requested by GEFSEC and the LDCF/SCCF Council? • Cost-effectiveness:has the cost-effectiveness been adequately demonstrated? • Sustainability and risk analysis:does the proposal clearly articulate how sustainability will be ensured, and relevant risks mitigated? • Co-financing: has the co-financing been confirmed? • M&E, tracking:does the proposal include a budgeted M&E plan? Has the Adaptation Monitoring and Assessment Tool (AMAT) been attached to the submission, with information for relevant indicators?

  42. PFD: key considerations • In addition to the elements to be considered in a PIF, PFDs should provide adequate information of the following: • Added value of PA: does the program present opportunities to address the enabling environment, local investments and cross-cutting elements in a more comprehensive way than is currently possible through individual projects? What are the economies of scale? • Partnerships: does the PFD identify relevant partners? How will they contribute to the objectives of the program? • Knowledge management: how will best practices and lessons be shared among partners/countries/projects within the program and beyond?

  43. Future Directions • Mainstreaming adaptation across core development sectors • Preparing the ground for long-term adaptation • Expanding synergies with other GEF focal areas • Enhanced private sector engagement • Risk transfer and insurance • Ecosystem-based adaptation

  44. Further Resources • LDCF: http://www.thegef.org/gef/sites/thegef.org/files/publication/23469_LDCF.pdf • SCCF: http://www.thegef.org/gef/sites/thegef.org/files/publication/23470_SCCF.pdf These publications will be updated and reissued in 2013

  45. Thank You SalihaDobardzic sdobardzic@thegef.org Bangkok, June 2013

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