Challenges with climate change financing in the Pacific Introduction to the Pacific and the Green Climate Fund Espen Ronneberg Climate Change Adviser SPREP
Overview 1. Challenges to climate change finance in the Pacific 2. Process of accreditation 3. Status of accreditation 4. Role of SPREP 5. Types of projects 6. Moving Forward
Background why concern? Leaders have continuously reaffirmed that climate change is the single greatest threat to the livelihood, wellbeing and security of peoples of the Pacific. Leaders stressed the critical need for financing to effectively respond to urgent and immediate needs to adapt to the adverse impacts of climate change in PICs, which are the most vulnerable countries. Copenhagen commitments by developed countries (2009), reaffirmed in the Cancun Agreements (2010): To provide new and additional US$30bn over 2010-2012 (mostly public) as Fast-Start Finance ; and To provide new and additional US$100bn per year, by 2020 (from a variety of sources, incl. private sources) as Long Term Finance
FSF Difficult to assess if new and additional 30bn was delivered ($36.2bn were reported) most FSF reported was actually ODA SIDS (and LDCs) at disadvantage for Fast Start Finance, mostly delivered through bilateral and some multilateral channels and not through UNFCCC funds Limited representation for SIDS and LDCs Lack of readiness (no fundable projects and programmes ready) Continuing institutional barrier to access multilateral funds Not effective prioritization for the most vulnerable in Fast-Start Finance delivery (with some exceptions incl. AUS, NZ and Japan, prioritized SIDS) Continuation of the historical imbalance in the allocation of resources between adaptation and mitigation (UK is an exception) Not all developed countries contributed their fair share, this needs to be corrected in the long-term Enhancing coherence in reporting is important challenge in the coming years to improve transparency and trust-building that funding pledged is effectively delivered
Balance between mitigation and adaptation (2010-2012) Fallasch & De Marez, 2013
2009 FSF? Transparency gap in 2013-2015 ($36.2bn reported for 2010-2012) Lack of clarity on Climate Finance vs. ODA, share of private finance vs. public No predictability on pathway for scaling-up climate finance from US$10bn per year (2010-2012) to US$100bn per year by 2020 which sources?
MDBs World Bank Administrative Support GEF Operating Entity of the Financial Mechanism UNFCCC Operating Entity of the Financial Mechanism GCF Implementing Administers GEF Trust Fund Special Climate Change Fund (SCCF) Least Developed Countries Fund (LDCF) Kyoto Protocol Adaptation Fund (AF) Green Climate Trust Fund Climate Investment Funds (CIFs) Forest Carbon Partnership Facility (FCPF) Adaptation Window Technolog y Window Mitigation Window (not active) Response Measure Window (not active) Mitigation Window Private Sector Facility Adaptation Window Clean Technology Fund (CTF) Strategic Climate Fund (SCF) Landscape of Forest Investment Program (FIP) Pilot Program for Climate Resilience (PPCR) Scaling up Renewable Energy Program (SREP) Climate Finance A complicated landscape - Multiple funds, unpredictable resources and difficult to access
SIDS concerns How to ensure the most vulnerable will receive adequate support in the new agreement. Reference to SIDS is disappearing in donors interventions. Reassurance is needed esp. given the inadequate level of ambition of INDCs submitted so far and uncertainty on their status and review/ramping-up process post Paris. Less mitigation efforts means development setbacks, higher adaptation costs and losses and damages for SIDS, this reverse relation needs to be acknowledged in the agreement Loss and Damage: How to anchor L&D in the agreement in such a way that allow for further work, including on possible instruments and sources. Access and readiness: access remains a challenge for SIDS and LDCs (even with the GCF), direct access not feasible in a near future for many, readiness is not a one off but a continued effort to enhance country-ownership and effective national action, to improve institutional capacity, absorptive and management capacity, enhanced quality and impacts of climate strategies and projects/programmes.
Process of accreditation SPREP was accredited first to the Adaptation Fund as a Regional Implementing Entity in Nov 2013, after process started in Apr 2011 As a result and based on Green Climate Fund analysis SPREP was fast-tracked in the GCF accreditation process, accredited Mar 2015
Status of accreditation - GCF Direct, Fast Track Access Projects up to $ 50 million in grants Limited to low to negligible economic, social and environmental risk (but this can be revised) SPREP eligible for readiness funds (support for institutional issues, pipeline development)
Types of projects
Types of projects
Criteria of GCF investments
Role of SPREP GCF - Development of a strategic pipeline of national, sub-regional and/or regional projects, in consultation with Members. AF SPREP serves a implementing (not executing) entity. GCF SPREP can be either project implementing and/or executing. GCF Readiness support. RTSM available to support technical project development, management and implementation
GCF modality 1
GCF Modality 2
Climate Finance SPREP Approach Our focus is on two areas: (1) substantially increasing climate finance that goes directly to PICs; (2) supporting PICs that wish to become NIEs. Our Approach since accreditation has included: Invitation to PICs to provide comments and suggestions 3 proposals being developed for October, 2015 Board Meeting: (i) CC Adaptation, building on PACC; (ii) strengthening provision of Climate Services information through NMSs capacity; (iii) Biofuel project. Proposals involve around US$ 70 million, building on existing programmes and priorities and involving cooperation with other IEs (UNDP)
Climate Finance SPREP Approach Working on longer term pipeline proposals with Pacific island countries - Meetings in Nadi (end July) and Apia (September) Strengthening capacity at SPREP CF Adviser also support from Comm. Sec and USAID Support to PICs who wish to have direct access and become NIEs - communicating advice and lessons learnt (as for AF see SPREP website)
SIDS DOCK Funding SIDS DOCK is a SIDS SIDS institutional mechanism established to facilitate the development of a sustainable energy economy within the small island developing states. SIDS DOCK partners with the World Bank and the UNDP a model of cooperation between regions focused on demonstration projects that are attractive investments for the private sector Chaired by Ambassador Vince Henderson, Ambassador of the Commonwealth of Dominica to the United Nations with oversight from AOSIS Ambassadors to the United Nations and technical experts. Initial support from Governments of Japan and Denmark
SIDS DOCK Funding in Pacific USD 2million To support 6 countries through Tuvalu Energy Efficiency Demonstration House Solomon Islands Solar PV powered Rural Telecommunication systems Tonga Solar PV Powered Well Water Pumping systems on Haapai Islands North Pacific: Sustaining RE and EE measures in Micronesia (SREEM) FSM, RMI and Palau
List of Possible RE projects 1. Up-scaling wind developments in the Cook Islands, Fiji, Samoa, Solomons, Tonga, Tuvalu and Vanuatu. 2. Up-scaling solar PV developments for Cook islands, Fiji, Kiribati, Nauru, Niue, Samoa, Solomons, Tonga, Tuvalu and Vanuatu & Tokelau and Am. Samoa; 3. Up-scaling solar water pumping in Kiribati and Tonga; 4. Up-scaling hydro developments in Fiji, PNG, Samoa, Solomons, Vanuatu; 5. Up-scaling Biomass development in Cook Islands and Samoa;
List of Possible RE projects 6. Up-scaling Biofuel developments in Kiribati, Samoa, Solomons & Tokelau; 7. Conduct dynamic stability studies for Pacific Power utilities; 8. Conduct a study on the real cost of electricity in the PICs through RETs; 9. Assessment of the readiness of PICs to develop and implement RE grid connected Policy Frameworks; 10. TA for Institutional Strengthening of PICs Energy offices in regulatory frameworks and legislations including project appraisals and technical assessments of RE national projects; 11. Capacity Building Program on RE and EE in the PICs.
Support available SPREP and CROP have developed Regional Technical Support Mechanism (RTSM) can be used for TA to develop projects USAID Asia-Pacific ADAPT can also provide support for project development GCF readiness support programme Japan is also offering support
Overview of Component 3 RTSM support and strengthen capacities of PICs to effectively respond to CC risks and improve ability to access, manage & utilise CC resources; Strategic response from CROP agencies, World Bank and ADB to provide coordinated & timely technical capacity support in CC, on a needs basis; Countries request TA off RTSM who will consult with networked experts (CROP agencies, MDBs, Development Partners, National Country Experts, Independent Consultants) and procure available TA to deploy into requesting country. Paid for by the RRF; Initial partners CROP agencies, World Bank, ADB, GIZ. Potential for more development
Overview of RTSM RTSM a network 1 of technical experts 2 that will provide timely and quality CC technical assistance to PICs on a needs basis; The unit facilitates rapid access and deployment of experts into PICs; Does not replace the mandated TA roles of CROP agencies; Not a stand-alone entity; Supplements by building on existing relationships between the countries and their DPs, expertise within CROP agencies, other stakeholders and peer-to-peer exchanges between countries, where possible
Overview of RRF Managed through the RTSM. Revolving fund basis Finances rapid deployment of experts into PICs on request. USD$1.1million currently available. Funded through ADB by Strategic Climate Fund (SCF) of the Climate Investment Fund (CIF), Supports approved 3 TA for 14 4 PICs RTSM & RRF established with oversight and coordination of the WARD 5 & under the guidance of the CES-CCRD 6 Could evolve into a regional climate change financing facility
Overview of RRF RRF Funds 7 : (i) travel and per diem costs of partner experts to provide approved TA in PICs; (ii) travel and per diem costs of national government experts to provide TA where peer-to-peer support is requested; (iii) consultancy fees as well as travel and per diem costs where independent consultancy expert is required; (iv) employment of staff to manage the various administrative functions of the RTSM and RRF; and (v) procurement costs involved in securing the necessary TA requested by member countries.
Recent developments Reimbursable grants suggested as new modality Implications of absorption of AF into GCF maintain AF? New funding for AF? Benefits of AF structure vs GCF structure Number of projects being put forward by the Pacific and contrary advice from GCF Readiness support questions
Thank you Any questions? espenr@sprep.org