Enabling direct access to climate finance in Africa

23/01/2017
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Panelists from left to right: Fatoumata Sangare Toure, BOAD; Wangare Kirumba, NEMA; Ndiaye Cheick Sylla, GCF Board; Louise Helen Brown, AfDB.

“Out of US $331 billion of global climate finance flows in 2014, only 3.6% went to Africa. If only 3.6%, despite Africa’s vulnerability to climate change, something must be wrong”. This, according to Luc Gnacadja, Special Representative for the Board of the Local Climate Adaptive Living Facility (LoCAL).

During a panel discussion on Thursday, November 10, 2016 at the Africa Pavilion during the UN Climate Talks (COP22) in Marrakech, participants discussed the challenges involved in accessing climate finance from international funds.

The panel was convened in collaboration by the World Resources Institute (WRI), the Centre de Suivi Ecologique, and the African Development Bank, and moderated by Louise Helen Brown, Coordinator of the Africa Climate Change Fund, a fund hosted by the AfDB which is supporting several African countries to strengthen their capacities to access international climate funds.

Adaptation funding needs to reach the local level

As a continent highly vulnerable to climate change, adaptation is a priority for Africa. “It is imperative to channel funding to the local level in order to build resilience to climate change” emphasized Gnacadja. LoCAL, funded by the UN Capital Development Fund (UNCDF), is doing so in five African countries, and looking to the Green Climate Fund (GCF) to scale up its successes in decentralising finance for adaptation to the local level.

Fatoumata Sangare Toure of the West African Development Bank (BOAD), a regional Bank accredited to the Adaptation Fund (AF) and GCF, also emphasized the importance of engaging and understanding the needs of communities through a participatory approach in order to identify and develop strong projects.

“When programs are designed with local stakeholders, it leads to more ownership and sustainability,” said Gnacadja. “The AfDB and BOAD should help local governments to invest in adaptation and resilience in a programmatic manner”.

Direct access a revolution for Africa

Panelists from left to right: Dethie Soumare Ndiaye, CSE; Luc Gnacadja, LoCAL Board.

Direct access by national institutions to climate finance has been a revolution for African countries. What was regarded as a risky and pioneering approach to channelling funding to climate projects when the Adaptation Fund (AF) first piloted it in 2010 is now widely recognised as a good practice in climate finance. 

This according to Dethie Soumare Ndiaye of the Centre de Suivi Ecologique (CSE), a national institution in Senegal which was the first to pilot direct access when it went through the rigorous process to become accredited to access funding from the AF, and more recently from the GCF.

However, the journey to accessing climate finance is lengthy and tough. In order to be accredited to access funding, an institution has to demonstrate that it has sound financial management capacities as well as safeguards to protect against environmental and social harm.

Out of 48 (according to the GCF’s last Board meeting) accredited entities to the GCF around the world, nine are national or regional entities in Africa. “African entities are competing with the gold standard,” said Zaheer Fakir, Co-Chair of the Green Climate Fund Board. “They are demonstrating that they have the same standards (as the international entities), with less people and fewer resources”.

Still, many African countries have not yet succeeded in getting a national institution accredited, or in accessing finance at the scale they aspire to. Many national institutions can only take on small (US $50 million or less) and low-risk projects. As a result, less than 10% of the funding approved by the GCF to date is being channelled through direct access entities. “I can understand why the proportion of GCF funding through direct access is low,” said Wangare Kirumba of the Kenyan National Environment Management Authority (NEMA), accredited to the AF and the GCF. “But what are the interventions that can ensure that this proportion grows to 70 or 80% in the next 15 years?”

We need to empower African institutions and build African capacity

African institutions need support in order to build their capacities to access climate finance, according to Ndiaye Cheick Sylla, alternate Board member of the GCF and Advisor to the Senegalese Government on climate change. “The GCF is providing this support through its readiness programme”. Several other institutions including WRI, the AfDB, the German development agency, GIZ, and others are also supporting such initiatives.

At the same time, national institutions are learning from each other’s experiences. “We learned from CSE’s innovations in managing executing entities, and of the importance of learning by doing,” said Kirumba about a recent study visit by NEMA officials to learn from CSE’s experience as an accredited entity to the AF and GCF. “There is a need to formalise this South-South cooperation and develop a platform for exchange so that many national institutions can learn from the experience of their peers. We are trying to mobilise support for such a platform,” said Dethie Ndiaye.

“The accreditation process was lengthy and complicated, but it was worth the effort,” claimed Kirumba. “Every African country can have a national accredited entity,” insisted Fakir. “We need to empower African institutions and build African capacity”. The AfDB, accredited national entities, and other partners have an important role to play in achieving this ambitious goal.