Access to Green Climate Fund: Opportunities and challenges for Bangladesh

There is a perception in Bangladesh that the Green Climate Fund (GCF) has a severe scarcity of financial resources. Hence, many organisations are frustrated and do not try to get access to the fund. Though the GCF resource is limited, it is the single largest and dedicated climate fund in the world under the United Nations.

It is expected that the GCF financial resource will significantly be increased and strengthened over the next decade. Right now it has around $12 billion for the period from 2020 to 2023. It is the dedicated and largest climate fund in the world. The fund was established by the decision of the United Nations Framework Convention on Climate Change (UNFCCC) in 2010 at COP (Conference of Parties) 16.

The purpose of the fund is to finance countries to tackle climate change as well as to adapt to it. The UNFCCC decided to raise $100 billion annually from different sources (public, private, multilateral, bilateral etc.) from 2020 to restrict GHG emission and to support adaptation activities of the developing world, particularly for the climate-vulnerable countries. The GCF Board has approved 124 projects of $5.6 billion, so far.

The GCF has various windows for funding projects related to climate change. These include common funding window, Enhanced Direct Access (EDA) mechanism, Simplified Approval Process (SAP) (under this window only $10 million is allowed from the GCF) and Private Sector Facilities (PSF). In addition to funding projects, the GCF provides financial support to enhance the capacity of NDA and DAEs under its Readiness Support mechanism and developing a funding proposal under Project Preparation Facilities (PPF).

The GCF has four categories of projects in terms of budget size. These are- micro-scale project (less than $10 million), small scale project ($10-50 million), medium-scale project ($50-250 million) and large scale project (more than $250 million). The unique feature of the fund is that 50 percent of it supposed to be used for mitigation and 50 percent for adaptation. Out of that adaptation portion of the fund 50 percent is supposed to go for LDCs, SIDs and African countries.

This approach creates opportunities for the Least Developed Countries (LDCs), Small Island Developing States (SIDs) and African countries to get access to the green climate fund to partially fulfil their adaptation needs. Despite the opportunity, the LDCs and SIDs are still struggling to get access to the GCF due to the complex nature of the fund's governance system.

The complexities include a different tier of the project evaluation, weak understanding of the country context by the GCF, and limited resources of GCF. There are also problems like limited technical and financial data and lack of strong commitment and capacity constraint to prepare GCF standard projects by different ministries.

Bangladesh is equipped with policy and institutions to get access to the GCF finance. The government has formulated National Adaptation Programme of Action (NAPA) in 2005 (revised in 2009); Bangladesh Climate Change Strategy and Action Plan (BCCSAP), 2009; the Third National Communication (TNC) under UNFCCC and the Nationally Determined Contribution (NDC) under the Paris Agreement and Country Programme (CP) for GCF.

These are dedicated to climate change policies and strategies in the country. Other development policies including the five years plans, vision 2021 and the delta plan 2100 have incorporated climate change. Thus, the country has a strong policy environment to get access to the GCF.

Like policies and strategies, the country has also institutional set up required to get access to the GCF. The government nominated the Economic Relations Division (ERD) as National Designated Authority (NDA) (the focal point). Palli Karma-Sahayak Foundation (PKSF) and Infrastructure Development Company Limited (IDCOL) are the two national-level accredited entities to GCF in Bangladesh.

Besides, 16 international and regional entities including the World Bank, UNDP, KfW, ADB, FAO etc., are working in Bangladesh. The importance of accredited entity is that the GCF accepts project proposal only through the accredited entities.

Getting accreditation is a complex and time-consuming process. The GCF maintains global standards fiduciary management system. It requires international standard policies and practices with evidence. It includes but not limited to audit policy (including internal audit), procurement policy, implementation strategy and policy, monitoring and evaluation policy, environmental and social policy, fund disbursement policy and procedure, grievance redress mechanism, complaint handling mechanism and so on.

All these policies must be supported by evidence of practices. These pieces of evidence and practices must maintain international standards. Few organisations in Bangladesh use to maintain global standards of practices of these policies. So, any government and non-government organisations who are willing to get access to the GCF should submit a project proposal through these organisations.

Despite having a policy and institutional advantages, the country is facing enormous challenges for getting access to the GCF resource due to a lack of enough capacity of the Bangladeshi organisations. The GCF mechanism is quite different from other development assistance provided by various development partners like ODA, IDA, bilateral funds etc. ODA, IDA or bilateral funds come to the government and their stakeholders with specific mandates.

They help develop projects by their consultants. They also help implement projects and carry out monitoring and evaluation. Participation of recipient countries or stakeholders is negligible. The GCF is unique in this case. It is a globally competitive financial source. We can get access to the fund only by formulating a high-quality project. We have to compete with global organisations. Hence, there is no alternative but a clear understanding of the requirements of GCF as well as the technical capacity for designing projects.

Any organisation aims to receive fund from GCF will require dedicated staffs to deal with GCF mechanism. Multi-disciplinary (climate change, environment specialist, sociologist/gender expert, financial analyst etc.) team increases opportunities of the organisations to develop a high-quality proposal. Financial capacity to invest in preparing the project proposal and annexure is an additional quality of the applicant organisation. Few organisations in Bangladesh dedicated multi-disciplinary team and financial ability to invest in project design.

One of the critical elements of GCF proposal template is that it requires many supporting documents. The most technical documents that challenge the stakeholders are feasibility study, environmental and social risk assessment and action plan (ESAP), and Gender Assessment and Action Plan (GAAP) and stakeholder consultation report. Each of the documents requires intensive data and analysis and involves significant human and financial resources.

The NDA and accredited entities should organise a series of seminars and training sessions for enhancing the capacity of the government, non-government organisations and private sectors. Institutional commitment and dedication is the prerequisite to get the GCF funding. The CP of Bangladesh for the GCF (prepared by NDA of Bangladesh) should be implemented in a faster way. A coordinated effort of the stakeholders in Bangladesh is essential to fully implement the CP of Bangladesh.

Dr Fazle Rabbi Sadeque Ahmed is a director (Environment and Climate Change) of Palli Karma-Sahayak Foundation (PKSF)

Md Rabi Uzzaman is the deputy Manager (Environment and Climate Change) of Palli Karma-Sahayak Foundation (PKSF)