Who Needs Climate Finance Anyway?
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29 June 2018
Author :   Zeph Kivungi
Climate finance : >> Image Credits by:http://internationalaffairsbd.com

OPINION

NAIROBI, Kenya (PAMACC News) - The next few days and weeks are arguably historic in the emerging sector of climate finance. On June 23-29th, Green Environment Fund (GEF) is holding the Sixth GEF Assembly in Vietnam. The GEF was established on the eve of the 1992 Rio Earth Summit to help tackle our planet’s most pressing environmental problems.  Since then, GEF has provided over $17.9billion in grants and mobilized another $93.2billion in co-financing for over 450 projects in 170countries. One of the global environmental challenges in question is climate change. This meeting in Da Nang, Vietnam paves way for its 7th funding cycle, commonly called GEF-7.

During the same week, 1st to 5th July, The Green Climate Fund(GCF), the most capitalized, hence the largest international environment fund (focused on climate change), has historic events lined up. The 20thquarterly GCF Board Meeting (dubbed B.20) will be in the Korean smart city of Songdo. The Board Approves applications for funding made by both public and private entities seeking to safeguard sectors and entire economies from adverse impacts of a changing climate.

A third fund, also created under the Kyoto Protocol of the UN Framework Convention on Climate Change (UNFCCC) like GCF and GEF, is the Adaptation Fund. It helps countries build resilience and adapt to climate change. It has so far committed US$477million in 76countries since 2010.

Basics

Why should we even be talking about climate finance? Why is it becoming such a central topic in today’s global economy? It is because the climate has and is actually changing. What is causing this change is often open to debate. That the climate is changing is undisputed. Farmers are devastated by either too much rain or insufficient rain. Countries are unable to feed themselves because crops and livestock are failing year in year out. New diseases are developing and old ones spreading to geographical locations they never existed.

Sabotaged Development

So, countries often called developing or least developed(all African states fall under this) need to factor in the elusive climate risks. Kenya spent anunplanned KES245.3 billion (USD 2.45 Billion)in 2017 on foodstuff imports to address a food crisis because the country faced severe drought. In 2018, the country has faced the worst floods in 60years according to the Climate Change Resource Centre. What follows is famine because crops were destroyed. The infrastructure swept away will cost fortunes to fix and/repair. These resources would have gone to other development needs but have to be diverted to tackle these climate events and impacts leaving a big gap in financing national development like universal healthcare, manufacturing or education. So, climate change directly sabotages development. This financing gap is filled by climate finance.

The GCF

The GCF is now valued at USD 13billion. Applications for financial support can be made to the Fund, to implement transformational changes in their economies. For instance, most African states depend immensely on rainfed agriculture. The 2016 Climate Change Exposure Index (CCEI) by VeriskMaplecroft, a risk analytics firm, show that relying on rainfall posed “high” or “extreme” risks- up to 85 per cent. These risks mean economic shocks. Countries may therefore miss the sustainable development goals and national aspirations unless they mobilise sufficient climate finance to safeguard the economies.

GCF and Africa

To date, the GCF has 76 projects under implementation valued at USD1.4 billion. That is an average project size of USD 18.4million. Of these 76, only 28 (36.8%) are in Africa. Some African states have several projects funded. They include Egypt, Namibia, Morocco, Senegal, and Zambia with more than 10projects among themselves. Which leaves just 18 projects for the other over 45countries of Africa.

Since GCF is fairly new, the understanding and capacity in Africa to interact with the Fund remains acutely limited. The traditional methodologies of relying on external international entities such as UN Agencies and International Development Banks will not sufficiently deliver the urgent changes required to protect these fragile African economies from devastation. And GCF recognizes this.  That is why they have a strong emphasis on Direct Access Entities, which are local institutions being accredited to help the country to directly access GCF resources. There is just a handful in Africa so far. Overall, the pace is wanting.

Current Players

There are organisations in Africa playing a crucial role of offering support to both countries and to accredited entities to access GCF and other climate finance. Dr.Aliou Diouf, head of Climate Finance at Africa Sustainability Centre (ASCENT) says, “GCF recognizes the work we do;currently supporting over a dozen countries in Africa to understand and access GCF funds. We also support Direct Access Entities and others like UNEP and IFAD to better support countries.

Zeph Kivungi is a Senior Programme Officer at the Africa Sustainability Centre (ASCENT).

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