The African Development Bank hosted a two-day meeting of international finance institutions (IFIs) in Istanbul on November 8 and 9, 2012 to advance the analysis and information-sharing regarding the role that Climate Change Development Policy Operations (CC DPOs) can play in promoting structural changes towards climate-smart development pathways.
Meeting participants included the African Development Bank, Asian Development Bank, French Development Agency, Institute for Sustainable Development and International Relations, Japan International Cooperation Agency and World Bank. The meeting was a result of the IFIs’ decision to come together and establish a working group to share lessons and deepen the understanding around key issues regarding utilization of DPOs as a relevant instrument to pursue climate-smart development.
DPOs are designed to help countries achieve programs of policy and institutional actions that support their policy and sector objectives. CC DPOs build on the DPO structure and strengths such as scaled-up finance, a country-driven process, promotion of coherence and consistency and reinforcement of country’s systems and institutions to help steer policy, regulatory and institutional frameworks in the direction of low carbon and climate resilient development.
Ongoing CC DPOs were presented as case studies to enable discussion around issues such as structure, impact and effectiveness of the CC DPO tool.
In Vietnam, for example, the Climate Change DPO is designed to complement and connect with ongoing and planned operations. It also provides a platform for climate change dialogue between the Government and multilateral development banks. A number of key lessons on implementing CC DPOs were shared during this presentation, including: the need for ownership and clear, balanced institutional setup; reconciling realistic, short term actions and mid to longer term goals; improvement of the quality of results framework. Thanks to the DPO in Vietnam, the policy and institutional framework has improved, policy discussions have improved, coordination has been promoted beyond what it was, and resources have been mobilized.
Additional points discussed include the use of process versus outcome indicators; the focus on specific sector outcomes versus focus on processes to promote the orientation of a development path; the establishment of the resource envelope; evaluation methodologies and risk management frameworks.
Those present at the meeting committed themselves to an ongoing process of information sharing and knowledge generation around CC DPOs so that they can be better understood and become a more relevant tool under the current and future climate finance architecture.