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Getting Africa ready for the Green Climate Fund

Getting Africa ready for the Green Climate Fund. Report prepared for Financing Climate Change: Africa’s Access to Convention Funds. 3rd December 2012. The Green Climate Fund could represent a watershed in the flow of climate finance to Africa.

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Getting Africa ready for the Green Climate Fund

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  1. Getting Africa ready for the Green Climate Fund Report prepared for Financing Climate Change: Africa’s Access to Convention Funds • 3rd December 2012

  2. Getting Africa ready for the Green Climate Fund The Green Climate Fund could represent a watershed in the flow of climate finance to Africa Figure 1.Africa currently receives far less climate finance than it will require • 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’ • Through both increasing their magnitude and changing their modality Source: CPI (2011), UNEP RISOE database and Vivid Economics/AfDB (2011) and (forthcoming)

  3. Getting Africa ready for the Green Climate Fund There are two possible forms of direct access: ‘standard’ direct access and ‘enhanced’ direct access Figure 2.Different forms of access GCF? • The Governing Instrument supports the former and asks the Board to consider the latter • direct 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   ? Source: Based on UNDP/ODI (2011)

  4. Getting Africa ready for the Green Climate Fund Seven actions/options for the GCF Board to promote African access to the GCF • act quickly to provide resources to support direct access • consider a more flexible approach to direct access where needed • explore opportunities to support existing funds that support climate change activity through direct access • provide a minimum floor allocation to direct access • allow for NIEs already accredited under the Adaptation Fund to be ‘passported’ to the GCF • ensure that accreditation and project cycle processes are quickly developed, transparent and well-understood • allow for accreditation applications in a variety of languages • Especially through direct access

  5. Getting Africa ready for the Green Climate Fund Three actions for African countries • prepare a credible, robust pipeline of funding opportunities • take early steps to create the infrastructure needed to access the GCF • build a cross-departmental dialogue on the opportunities provided by the GCF and direct access

  6. Getting Africa ready for the Green Climate Fund Roles for the African Development Bank • support the capacity of African NIEs before and after accreditation • increase its attractiveness as a Multilateral Implementing Entity (MIE) for African partners • support the development of Africa-specific climate change and/or green growth action plans • These might be key roles for the Africa Green Facility that the AfDB wishes to develop

  7. Getting Africa ready for the Green Climate Fund Enhanced direct access offers more opportunities but also more risks • 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 • It is an, as yet, untested modality for climate finance

  8. Getting Africa ready for the Green Climate Fund Contact us: 306A Macmillan House Paddington Station
London W2 1FT Author contact details: John Ward T: +44 7790 613951 E: john.ward@vivideconomics.com Company Profile Vivid Economics is a leading strategic economics consultancy with global reach. We strive to create lasting value for our clients, both in government and the private sector, and for society at large. We are a premier consultant in the policy-commerce interface and resource and environment-intensive sectors, where we advise on the most critical and complex policy and commercial questions facing clients around the world. The success we bring to our clients reflects a strong partnership culture, solid foundation of skills and analytical assets, and close cooperation with a large network of contacts across key organisations. Practice areas Energy & climate change Development economics & finance Competition & strategyInnovative policy Infrastructure & resources

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