This article was originally published on the CFR website on August 18, 2016

CDKN and its partners have been sharing experiences with each other on how developing countries can become more ‘climate finance ready’. As part of this programme, we interviewed Mikko Ollikainen of the Adaptation Fund Secretariat about what he’s looking for in a project proposal.

What makes a good proposal?

A proposal that responds to the needs of the recipient and includes needs and priorities of the country and specific stakeholders the project is targeting; one that understands the specific mandate and preferences of the funder.

In the case of the Adaptation Fund, good proposals are for projects with concrete adaptation activities, noting that the Adaptation Fund is a country-driven fund and does not have a very top- down approach.

Project developers should review the criteria closely:

  • how will the project use the resources to reach targets?
  • how will the project be sustainable over time?
  • how will it demonstrate cost effectiveness?
  • how will it meet national technical standards?

Generally what is a good project is based on typical project management standards – like many other funds, having a strong project team is very important. So a good project is one that understands what is needed, how it can be funded and has a good design.

Which requirements do countries find the most challenging?

With respect to which requirements of the Adaptation Fund countries find most challenging, we have noted that the environmental and social risks associated with the Adaptation Fund policy are often not detailed enough in the proposals, because proposals always focus on the good things. They don’t give enough consideration and mention of the negative outcomes – for example ‘maladaptation’ associated with the implementation of the project. (Editor: maladaptation is climate adaptation action with unintended negative consequences.)

Another requirement that is often difficult to fulfil relates to the need to have extensive stakeholder consultation to ensure that the project is shaped according to needs of the community.

What does ‘bankable’ mean for the Adaptation Fund?

The Adaptation Fund doesn’t typically use the word ‘bankable’ very often and because the focus of the fund is on grants and hence no need for projects to be bankable per se.

The Adaptation Fund speaks instead about a fundable project: a project that has impact, co-benefits, makes a contribution to longer-term resilience of the project area and one that has considered the possible risks of the project.

Also it is important for the fundability of the project that it speaks to the needs of the country and is aligned with the fund priorities and mandate. The project must be concrete in that the majority of funding should go to producing solid and tangible results.

For example, funds towards capacity building should only represent a small component of a much larger project. Finally, the project should be targeted towards adaptation and improving resilience to climate change impacts.

However, it is worth noting that the project criteria are not set in stone and one can expect that the criteria applied to project proposals will continue to evolve as new learning emerges.

Find out more about our South-South learning exchange on developing bankable projects in the related blog by Virginie Fayolle of Acclimatise: Climate funds face tension between country ownership and pressure to disburse funding.