Environment Related Funding Mechanism - Part 2
Environment Related Funding Mechanism
CONTENT
CONTENT
Nagoya Protocol Implementation Fund
Green Climate Fund
Climate investment
fund
Clean Technology Fund
(CTF)
Strategic Climate Fund (SCF)
Special Climate Change Fund (SCCF)
Note: This is the second edition of the series "Environment Related Funding Mechanism". For First one Click here
Nagoya Protocol Implementation
Fund
The Nagoya Protocol Implementation Fund
(NPIF) is a new landmark fund to help developing
countries ratify and implement a key international agreement to conserve
and sustainably use biodiversity.
GEF established NPIF
The Nagoya Protocol Implementation Fund
(NPIF) is a multi-donor trust fund
that started operations on May 26th, 2011. It can receive voluntary
contributions of multiple governments
and the private sector.
The NPIF has been created to fund activities under the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization (the Nagoya Protocol).
The NPIF supports signatory countries and those in the process of signing the Nagoya Protocol, and that intend to ratify the Protocol in order to accelerate the ratification and implementation of the Protocol.
The Nagoya Protocol establishes the ground rules for how nations should cooperate to access and to share the many benefits that come from the sustainable utilization of genetic resources of all living organisms.
The projects funded under the NPIF encourages the engagement with private sector entities interested in exploring the economic potential of genetic resources and facilitate the transfer of appropriate technologies.
The fund will be operated by GEF.
Top Contributor: Japan, France, Switzerland, Norway, United Kingdom
Green Climate Fund
• With the
goal of keeping a watch on increase in the temperature and to maintain it below
2 degrees Celsius a fund name Green Climate Fund (GCF) was established formally as a financing mechanism by United Nations
Framework Convention on Climate Change (UNFCCC) in 2010. And its
governing instrument was adopted at Conference of Parties (COP) 17 in
2011.
GCF’s financial mechanism
channels funds from developed
countries to developing countries. The idea behind the fund is removing
the inequality and moving towards positive change.
The GCF was established
with an aim to support the policies, programmes, projects and other related
activities in developing countries to allow them to mitigate climate change and
also adapt themselves to the disruptions arising out of the climate change.
The Fund is a unique
global initiative to respond to climate change by investing into low-emission
and climate-resilient development.
It intends to raise $100 billion a year by 2020.
• The GCF finances activities to both
enable and support adaptation, mitigation (including REDD+), technology
development and transfer (including CCS), capacity-building and the preparation
of national reports.
• The important distinction of GCF is
that it has an independent legal status and personality and nationally
designated authorities have a paramount role to play. This has been achieved
after many rounds of different negotiations.
• The GCF follows a ‘country-driven
approach’, which envisages effective involvement of various stakeholders at all
levels and also enables the developing countries to evolve their climate policy
keeping in consideration their immediate development priorities like poverty
reduction and improving standards of living for a large proportion of their
population. The effectiveness with which a country is able to tap the resources
from the GCF and use them effectively is dependent on how well the country’s
government and its various institutions have prepared themselves to access the
Fund.
Ministry of Environment, Forests and Climate Change (MoEFCC) has been nominated as
India’s Nationally Designated Authority
(NDA) for the GCF. It, shall make recommendations on funding proposals in
the context of national climate strategies to the Board of the GCF. NABARD has been accredited by GCF Board
as the first Entity for sourcing financial resources from GCF for India.
Currently, In India only one project Installation of Groundwater Recharge
System in Odisha is underway using funds from GCF.
• Further NABARD has been accredited by
Green Climate Fund (GCF) Board as one of the National Implementing Entity (NIE) for GCF in India.
• NABARD will be responsible for
management and oversight of project implementation, which includes the
origination and preparation of a funding proposal, the subsequent management of
the necessary stages of the implementation process until its conclusion
(project management) on behalf of GCF, and reporting obligations.
• It is based in South Korea and governed
by a Board of 24 members and initially supported by a Secretariat.
• The World Bank serves as the interim
trustee of the GCF, and the Fund functions under the guidance of and remains
accountable to the UNFCCC Conference of Parties.
• The Fund will promote the paradigm
shift towards low-emission and climate-resilient development pathways by
providing support to developing countries to limit or reduce their greenhouse
gas emissions and to adapt to the impacts of climate change, taking into
account the needs of those developing countries particularly vulnerable to the
adverse effects of climate change.
Some
additional informations
- First mention of concept in
Copenhagen Accord in CoP-15
- Formally in CoP-16 at Cancun.
- WB is chosen as a temporary
trustee of the fund.
- HQ : Incheon, South
Korea
- It is intended to be the
centrepiece of efforts to raise Climate Finance of $100 billion a year by
2020. This is not an official figure for the size of the Fund itself,
however.
- No clarity about from where
money will come in this fund.
Climate investment fund
The Climate Investment Funds (CIF) are a
collaborative effort among the Multilateral Development Banks (MDBs) and
countries to bridge the financing and learning gap between now and a post-2012
global climate change agreement. Designed through extensive consultations, the
CIF are governed by balanced representation of donors and recipient countries,
with active observers from the UN, GEF, civil society, indigenous peoples and
the private sector.
·
These
include four key programs that
help 72
developing countries pilot
low-emissions and climate resilient development: Clean technology Fund (CTF);
Forest Investment Program (FIP), Pilot Program Climate Resilience (PPCR),
Scaling up Renewable energy Program (SREP)
o
The
$1.2 billion Pilot Program for
Climate Resilience (PPCR) is helping
developing countries integrate climate resilience into development planning and
offers additional funding to support public and private sector investments for
implementation.
o
The
$780 million Scaling Up Renewable
Energy in Low Income Countries Program (SREP) is
helping to deploy renewable energy solutions for increased energy access and
economic growth in the world’s poorest countries.
o
The
$775 million Forest
Investment Program (FIP) supports efforts of
developing countries to reduce deforestation and forest degradation and promote
sustainable forest management that leads to emissions’ reductions and
enhancement of forest carbon stocks (REDD+).
·
The CIF are comprised of two Trust Funds viz., Clean Technology
Fund (CTF) and Strategic Climate Fund (SCF).
·
CTF promotes investments to
initiate a shift towards clean technologies, whereas SCF serves as an
overarching framework to support targeted programs with dedicated funding to
pilot new approaches with potential for scaled-up, transformational action
aimed at a specific climate change challenge or sectoral response.
·
Government of India has agreed
in principle to access Climate Investment Funds. In the process of accessing
these Funds, Climate Investment Plan (CIP) of India has been endorsed in the
Trust Fund Committee meeting held on 4 November, 2011.
India’s Investment Plan which
contained four proposed projects has been approved. Since all the funds under
the CTF have already been pledged, projects under India’s Investment Plan will
be funded from additional resources as and when made available by the donors.
Climate
Investment Funds
|
|
Funding Source
|
Multi-lateral
banks (Word Bank, AfDB, AsDB, EBRD, IDB)
|
Focal Sector/s
|
All sectors
|
Nature of
disbursement
|
Loan, grant
|
Cofinancing
|
Yes
|
Eligible Region
|
Asia-Pacific,
Africa, SIDS, South and Central America, Europe
|
Summary Note
|
The CIFs are
being established by the Bank jointly with the Regional Development Banks
(AfDB, AsDB, EBRD, and IDB) to promote international cooperation on climate
change and support progress towards the future of the climate change regime.
The CIFs consist of the Clean Technology Fund (CTF) and the Strategic Climate
Fund (SCF). The SCF will provide financing to pilot new development
approaches or to scale-up activities aimed at a specific climate change
challenge through targeted programs. The first program to be included in the
SCF would pilot national level actions for enhancing climate resilience in a
few highly vulnerable countries
|
Clean Technology Fund
(CTF)
The Clean Technology
Fund (CTF), one of two multi-donor Trust Funds (other being Strategic
Climate Fund) within the Climate
Investment Funds (CIFs), promotes scaled-up financing for
demonstration, deployment and transfer of low-carbon technologies to developing and emerging economies with
significant potential for long-term greenhouse gas emissions savings.
Channeled through the African Development Bank, Asian
Development Bank, European Bank for Reconstruction and Development,
Inter-American Development Bank, and World Bank Group, the CTF finances 15 to 20 country programmes and regional programme.
Basic Description
| Name of Fund |
Clean Technology
Fund (CTF) |
| Date Created |
Date fund
proposed:
February 2008. Date fund made operational: 1 July 2008 (approved by the World Bank Board of Directors). |
| Proposed Life of
Fund |
The design of
the CTF includes a “sunset clause”
which stipulates that necessary steps to conclude CTF operations shall be
taken once a new (UNFCCC) financial architecture takes effect. Any
remaining CTF funds may be transferred to another fund with a similar
objective. Should UNFCCC negotiations result in a renewed mandate for the
CTF, operations may continue with appropriate adjustments. |
| Administrating
Organisation |
The World Bank is the Trustee and
Administrating Unit of the CTF Trust Fund. The World Bank Group, the African Development Bank, the Asian Development Bank, the European Development Bank, and the Inter-American Development Bank are the implementing agencies for CTF investments. |
| Objectives |
The Clean
Technology Fund (CTF) seeks to promote scaled-up financing for demonstration,
deployment and transfer of low-carbon technologies with significant potential
for long-term greenhouse gas emissions savings. It aims to:
1. Provide positive
incentives, through public and private sector investments, for the
demonstration of low carbon development and mitigation of greenhouse
gas emissions;
2. Fund low carbon
programs and projects that are embedded in national plans and strategies,
scaling up development and accelerating the diffusion and transfer of clean
technologies;
3. Realize
environmental and social co-benefits, illustrating the potential for
low-carbon technologies in contributing to sustainable development and the
Millennium Development Goals;
4. Support
international cooperation on climate change;
5. Utilize skills
and capabilities of the MDBs to raise and deliver new and additional
resources, including official and concessional funding, at significant scale;
and
6. Share
experiences and lessons learned in responding to climate change challenges.
|
| Activities
Supported |
Activities
supported by the CTF include programmes within the:
Additionally, there are options for private sector engagement or
public-private partnerships.
|
| Conditions &
Eligibility Requirements |
Country access
requires:
|
Relationship with Official Development Assistance
| Inclusion as
Official Development Assistance |
Yes. The application of all CIF finance (concessional loans, grants, and guarantees through the MDBs) can be classed as ODA by MDBs if:
|
| Financial
Instrument/ Delivery Mechanism Used (e.g. grant, loan) |
The CTF uses a
blend of financial instruments, including grants, concessional loans and guarantees to make investing in low
carbon technologies more attractive to both public and private sector
investors in developing countries. CTF financing provides a grant element
tailored to cover the identifiable additional costs necessary to make the
project viable, thereby providing the appropriate incentive to facilitate
deployment of low carbon technologies at scale. The share of funding allocated to an MDB will be based on country requests, the quality of proposals, the comparative advantage of the MDB and experience in a region/country. |
| Nature of
Recipient Country Involvement |
CTF investment
programs are developed on a country-specific
basis to achieve nationally-defined objectives. CTF investment plans
build on existing country-owned strategies or action plans and demonstrate
complementarity to activities under other available programs, including those
that are aimed at enhancing the enabling environment. |
India
plans to reduce 2020 GHG emissions by 20–25% compared to 2005 levels. To
support these efforts, the government of India drafted an investment plan that
will tap US$775 million from the Clean Technology Fund (CTF) for transformative
investments to improve and expand India’ s hydropower operations, develop
untapped solar resources, and improve energy efficiency.
Strategic Climate Fund (SCF)
The Strategic Climate Fund (SCF)
is one of the two funds of the Climate Investment Funds. It serves as an
overarching framework to support three targeted programs with dedicated funding
to pilot new approaches with potential for scaled-up, transformational
action aimed at a specific climate change challenge or sectoral response.
Targeted programs under the SCF
include:
·
The Forest Investment Program (FIP),
approved in May 2009, aims to support developing countries’ efforts to
reduce emissions from deforestation and forest degradation by providing
scaled-up financing for readiness reforms and public and private
investments. It will finance programmatic efforts to address the
underlying causes of deforestation and forest degradation and to overcome
barriers that have hindered past efforts to do so.
·
The Pilot Program for Climate
Resilience (PPCR), approved in November 2008, was the first
program under the SCF to become operational. Its objective is to pilot
and demonstrate ways to integrate climate risk and resilience into core
development planning, while complementing other ongoing
activities.
·
The Program for Scaling-Up
Renewable Energy in Low Income Countries (SREP), approved
in May 2009, is aimed at demonstrating the social, economic, and environmental
viability of low carbon development pathways in the energy sector. It seeks to
create new economic opportunities and increase energy access through the
production and use of renewable energy.
Through its targeted programs,
SCF is designed to:
1.
Provide experience and lessons
through learning-by-doing.
2.
Channel new and additional
financing for climate change mitigation and adaptation.
3.
Provide incentives for scaled-up
and transformational action in the context of poverty reduction.
4.
Provide incentives to maintain,
restore and enhance carbon-rich natural ecosystems, and maximize the
co-benefits of sustainable development.
Special Climate Change Fund
(SCCF)
Introduction
The Special Climate Change Fund (SCCF) was established under the
Convention in 2001 to finance projects relating to: adaptation; technology
transfer and capacity building; energy, transport, industry, agriculture,
forestry and waste management; and economic diversification. This fund
should complement other funding mechanisms for the implementation of the Convention
The Global Environment Facility (GEF),
as an operating entity of the Financial Mechanism, has been entrusted to
operate the SCCF.
The Special
Climate Change Fund (SCCF) was established in response to guidance from the
Conference of the Parties (COP7) in Marrakech in 2001. The SCCF complements the
Least Developed Countries Fund (LDCF). Unlike the LDCF, the SCCF is open to all
vulnerable developing countries. In addition, it funds a wider range of activities
related to climate change. As of 2017, the SCCF has a portfolio of nearly
US$350 million in voluntary contributions supporting 77 projects in 79
countries.
Adaptation
is the top priority. But the SCCF also funds, through separate financing
windows, technology transfer, mitigation in selected sectors including: energy,
transport, industry, agriculture, forestry and waste management; and economic
diversification.
Through the GEF, and with
guidance from the United Nations Framework Convention on Climate Change (UNFCCC),
the SCCF targets key sectors for adaptation and technology transfer.
The SCCF is the only adaptation
fund open to all vulnerable developing countries.
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