This article was originally published on the CFR website on December 3, 2014
National Implementing Entities (NIE) initiatives have started to kick off all over the world, and are a direct access option that could help accelerate climate compatible development projects and policies in developing countries. Ronald Mukanya of CDKN draws some key lessons from NIEs’ recent experience.
Developing countries can only access the Adaptation Fund (AF) via accredited implementing entities, whether multilateral, regional or national. Implementing entities are accredited via a thorough process undertaken at the Board level, in this case at the Adaptation Fund and the Global Environmental Facility (GEF). Accredited NIEs or countries receiving funds are, in fact, more numerous in Africa than anywhere else. Domestic climate change funds such as FONERWA in Rwanda and the Climate Resilient Green Economy (CRGE) Facility in Ethiopia have likewise started grappling with this implementation challenge.
Cross-country learning on NIEs is a useful way to enhance best practice and can lead to emergence of a regional voice to inform ongoing developments in the international climate finance architecture.
It’s against this background that CDKN undertook a research project in partnership with the Climate Governance in Africa programme of the Heinrich Boell Foundation. For the first time, the project brought together accredited implementing entities of the Adaptation Fund in Africa as well as selected domestic climate finance facilities and aspiring NIEs seeking AF accreditation, with two goals in mind:
1. To facilitate research and derive important lessons for current and future operations of Climate Finance Funds, for adaptation and resilience projects in particular and climate change projects in general.
2. To facilitate a forum where NIEs and other accredited implementing entities of the Adaptation Fund, including other domestic climate funds in Africa can engage, network and share knowledge, experiences and lessons learnt – Community of Practice.
In September 2011, as part of this project, the Government of Senegal hosted a CDKN-supported UNFCCC workshop , focusing on capacity building around the accreditation process of NIEs. Bringing together the AF Board and secretariat, accredited as well as aspiring African NIEs, MIEs (multilateral implementing entities) and RIEs (regional implementing entities) and other domestic climate funds, the workshop discussed common obstacles that African Implementing Entities were faced with during the execution of projects, as well as the opportunities, strategies and insights for effective use of available funds.
Before the workshop, research was carried out to identify and assess progress of the accredited implementing entities on the projects and programmes that they had developed. The analysis focused on the approaches adopted by these agencies to programming direct access at the sub-national / community level. The research provides a summarised analysis of the existing literature as well as updated information and a thorough analysis of six selected NIEs and domestic climate funds on the African continent.
All the stakeholders that convened in 2011 are now forming part of a Community of Practice that meets annually.
Among this Community, some common challenges are evident. For example, many countries struggle to complete the transition from institutional strengthening to an actual accreditation by the AF. The Community of Practice is actively involved in facilitating this process by sharing of best practices among its members.
It has managed offering aspiring NIEs like FUNAB in Mozambique the opportunity to directly engage with the Adaptation Fund on their ambitions to become accredited and to get technical support on the detail of the accreditation requirements and process.
A number of countries accredited several years ago have not yet been able to get any projects funded: this has made it evident to the members of the Community of Practice that, beyond gaining accreditation, they have to be thinking about actual project proposal development and implementation, another key focus in their current discussions.
Beyond a solid trust relationship amongst its stakeholders, the Community is hoping to see more institutions seek AF accreditation strategically or utilise other direct access modalities base on their climate finance needs.
The Adaptation Fund itself has shared some useful reflections regarding the advantages of NIEs (by comparison with multilateral entities) for vulnerable countries:
• Despite their lower levels of capacity, NIEs appear to be able to kick start projects faster than MIEs, a key consideration for direct access.
• Administrative costs are lower with NIEs, again a key advantage for countries with limited resources.
• The accreditation process is important to give countries a chance to improve the governance process of their national institutions and is therefore, a crucial exercise.
• African countries need to have a long-term vision beyond NIE accreditation, to facilitate project implementation.
• Building on the existing Community of Practice, a proper platform for the African region could be created in order to keep the exchange on South-South cooperation for accreditation going.
• Another key element of discussion for the future concerns the relations between governance institutions and research institutions, and whether this should be managed from national level or at the AF level.
It is worth noting that beyond the newly built trust relationship between the Adaptation Fund and a large number of existing and potential African NIEs, this project has also laid a foundation for CDKN’s growing portfolio of climate finance readiness projects in Africa and other regions related to the Green Climate Fund (GCF) and other sources of financing.
Image courtesy of Neil Palmer (CIAT).