Why can’t poor countries access the climate finance they were promised?

By Anoop Poonia

When the #GreenClimateFund (GCF) was announced at COP16 in 2010, the intention was to give small, developing countries direct access to finance to protect themselves from climate change. Yet many of the smallest and most at-risk countries in the world now claim that they do not have the means to access these funds directly.

“It’s a paradox,” said Anote Tong, the president of #kiribati in December. “We need [the funds] the most but we don’t have the capacity to get it because we’re not accredited.” Tong added that the accreditation process involves so much bureaucracy it is a significant challenge for low-resourced governments.

Later, when told of Tong’s words by the Guardian, representatives of the governments of #Tonga, the Comoros and Grenada all said they shared his concerns.

The GCF, which became operational in 2015, is funded by developed countries and aims to assist developing countries with climate change mitigation and adaptation projects, such as early-warning systems for climate-related disasters.

For a country to directly access GCF finance, it must first nominate a “national designated authority” – usually an existing government department like the finance or environment ministry – which then nominates an institution for accreditation.

That institution is reviewed by the GCF’s accreditation panel, self-described as independent and technical. The nominated institutions include a variety of local, regional, public and private institutions such as Rwanda’s ministry of national resources or Namibia’s Environmental Investment Fund.

The difficulty lies in demonstrating that these institutions comply with the GCF’s fiduciary and gender policy standards, and that they can apply the relevant environmental and social safeguards. These measures – to guard against corruption, among other problems – are outlined in the 52-page application form.

Institutions must prove they have: a track record of delivering mitigation and adaptation projects, a fully functional independent audit committee with plans for the past three years, various procurement committees, relevant guidelines and data on complaints handled in the past two years, examples of conflicts of interest in the past two years and how they were dealt with – and so on.

Kashmala Kakakhel, a #ClimateFinance fellow at the Women’s Environment and Development Organisation, says that some of the recently accredited national entities, from India and Namibia for example, had told her that the accreditation process was “excruciatingly painful”.

The pain doesn’t have to be endured alone, help is available. The World Resources Institute, for example, is working on climate-finance readiness in Kenya, the Philippines and Fiji – funded by the German government. In Kenya, it is working with the National Environment Management Agency (Nema) to help the government access and use GCF finance effectively. It has hosted workshops for Nema staff, helped clarify the agency’s decision-making process and connected it with institutions from other countries in a similar position, so they can learn from each others’ experiences.

The GCF also has a special US$30m “readiness programme” to support developing countries’ institutions through the accreditation process. As of December 2015, 95 countries had expressed an interest in support from this programme and 33 have had their requests approved. This financing will be distributed in 2016 and comes from the funds donated by developed countries – the maximum a country can receive is $300,000.

According to Anoop Poonia, climate finance coordinator at the Climate Action Network, support should be more long term and on-site than it currently is. Ideally, an expert should be present in the country for months, if not years, and ensure an institution is accredited before they leave. Micronesia is one of the first examples where this long-term support is being planned, and a local consultant will be hired to work on the country’s accreditation for two years.

But as two years is a long delay, other countries are opting for the alternative route of direct access – through multilateral institutions that have the means to become accredited quickly. For example, the GCF recently gave a $31m grant for a new river water intake station, waste water treatment plant and sewer coverage in Fiji. The Fijian government was only able to access the grant through a partnership with the Asian Development Bank, one of several international banks to have become accredited already.

This goes against the spirit in which the GCF was founded, says Poonia. “The purpose [of the GCF] was that any of these small nations should be able to access the fund directly,” he says. “In the past, the experiences of communities who have historically been facing injustice, whether indigenous peoples or communities in far-flung areas outside of the commercial mainstream, were always left out or their voices and concerns were never really heard.”

Simplifying the accreditation process would perhaps be the biggest help and this plea has been heard by the GCF’s executive director and secretariat. The final text of the Paris agreement also urges institutions like the GCF “to support country-driven strategies through simplified and efficient application and approval procedures”.

Despite this pressure, simplification is far from certain, according to ActionAid’s international climate policy manager, Harjeet Singh, and others. “Since accountability to donors as well as to poor people is of prime importance it is unlikely that the fiduciary standards will be relaxed for poor countries,” says Singh. “Instead of expecting the rules to be simpler, it seems that poor countries will have to learn to play the game the hard way.”

Declaration: The article was published first in The Guardian.

About the Author:

He is a former President of Indian Youth Climate Network and a Food Entrepreneur. He has wider experience in policy advocacy, education and ground initiatives in climate change.

He is the Programme Officer in CANSA and involved with Policy Advocacy & Capacity Building for key stakeholders in South Asia in the areas of Sustainable Development, Low Carbon Development Strategy, Climate Change Adaptation and Climate Finance.

#ClimateFinance  #GreenClimateFund  #Kiribati  #Tonga