New life has been breathed into the Adaptation Fund, currently the most significant, albeit not the singular, source of capital for climate change adaptation financing in the developing world.
This is thanks to a donation of Euro 50 million from Germany, made during the recent international climate talks, held over the last two weeks in Lima, Peru.
The donation puts the AF within US$19 million of its US$80-million fundraising target for this year.
“The AF got a strong endorsement from this COP (Conference of the Parties to the United Nations Framework Convention on Climate Change) when the German Government contributed — and it is not a pledge, it is already a contribution because it is paid…” said Marcia Levaggi, manager of the AF Board Secretariat.
The money, she said, will allow them to clear a number of projects in their pipeline — including from Ghana, Mali and Nepal.
At the same time, Levaggi said the donation to the AF was an indication of its continued relevance, despite having struggled under the weight of a slump in the carbon market — reliant as it is on financing through two per cent of proceeds from projects under the Clean Development Mechanism.
This is also despite the scheduled coming on stream next year of the Green Climate Fund (GCF), which some anticipate will subsume, if not replace, the AF.
“I think the GCF is becoming operational but the AF still has role to play. The AF has pioneered [direct access funding for adaptation financing for developing countries] and there is a lot of interest still in getting accreditation with the AF and with submitting projects to the AF,” Levaggi told Environment Etc.
“The NIEs [national implementing entities, so designated under the AF to implement approved country projects] appreciate the network that has been built through the Readiness Programme of the AF and they appreciate the interaction they can continue having through the fund. So we are confident that next year, we will continue with this programme and that we will get more projects,” she added.
Since 2010, the AF has allocated some US$232 million to assisting 40 countries adapt to climate change.
Projects to date have included disaster risk reduction as seen in Colombia and Pakistan; agriculture and food security as seen in Mauritania and Djibouti; coastal zone management as seen in Samoa and Jamaica; and water management as seen in Honduras and Mongolia.
In addition to being the first to allow direct access financing for developing countries, the AF is also celebrated for its active engagement of civil society. This it does, according to a September 2014 overview of the fund, through “soliciting comments for all proposed projects, maintaining an active dialogue with civil society and globally webcasting all Board meetings”.
“At the last meeting, we got 13 applications from the NIEs. We approved six. But the remaining seven will come back. So we will have more projects for NIEs and we are exchanging a lot of information and knowledge with the GCF Secretariat,” Levaggi continued.
Meanwhile, she said that the first step toward harmonisation between the GCF and the AF was made “when the GCF Board have decided to approve the decision to fast track the accreditation of the AF NIEs with the GCF”.
“That’s also an acknowledgement of the procedures of the AF, that they are sound and good and so we expect to continue building with the GCF, some kind of linkage that allows the two funds, at least during a transitional period, to interact and to find a way of working together and in coordination,” the AF Board Secretariat manager said.
She added that the AF Board has also requested of the secretariat that it write a paper outlining options on possible linkages.
“We are working on that and we expect to submit it to the board inter-sessionally,” Levaggi said.
She could not provide precise details on options but suggested that “at least some small and micro projects that are up to US$10 million, that could be where the AF could make a difference and would complement the work of the GCF, if the GCF aims at scale, at bigger projects”.
Beyond that, Levaggi said the plan was to continue to fundraise for the AF, which has increasingly become reliant on contributions from donor countries, including Sweden, Finland, Belgium, and France, to continue its work.
“The plans are keeping the contacts with donors, trying to sensitise them and also our recipient countries, which many of them have been vocal in the plenary, advocating for more resources to the AF,” she said.
The AF’s fundraising target for 2015 remains US$80 million.