The race to get international climate finance: Is Bangladesh keeping up?

Over the years, Bangladesh has made significant progress in formulating climate friendly policies. The country evidently recognises the importance of integrating climate change with development interventions.

Bangladesh is one of the first countries to establish a government trust named Bangladesh Climate Change Trust (BCCT) that utilises domestic funds to take actions against problems caused by climate change and each year, the country allocates approximately $100 million to support different activities to build resilience of the vulnerable communities.

But in terms of accessing international climate finance, the country still lacks the capacity, particularly in monitoring and reporting on the impacts of the actions being taken. As a result, the rate of accessing international climate finance is not satisfactory, despite being one of the countries most vulnerable to the adverse impacts of climate change.

To date, the largest source of international climate finance for Bangladesh has been the Global Environment Facility (GEF). GEF has also played a significant role in providing both financial and technical assistance to formulate different key national documents.

The most attractive financing window right now both from private and public institutions is the Green Climate Fund (GCF). Still many organisations have limited capacity to integrate climate change in their projects particularly under GCF.

The other stakeholders, like the implementing partners at local level, also lacks in capacity on designing and implementing projects for GCF. This is mostly because, addressing climate change requires robust environmental and social safeguard (ESS) standards, gender policy and indigenous people's policy to meet the GCF standards at institutional level as well as project level, that many organisations cannot meet.

If we look at the 26th board meeting of GCF where 15 projects were approved in August 2020, or even in the 25th board meeting in March 2020, there were no projects from Bangladesh. It is not necessarily true that, in all the board meeting there will always be a project from Bangladesh, but we should plan and work in a way that at least one project is placed at the board per year for consideration.

If we cannot keep pace with the speed then there is a chance that government institutions as well as non-government organisations will lose interest in this most attractive funding window to tackle the adverse impacts of climate change.  

Bangladesh has already received several readiness support from GCF during 2015-2019, for example, to establish and strengthen the National Designated Authority (NDA), formulation and advancement of the national adaptation plan process, most recently in December 2019, Palli Karma-Sahayak Foundation (PKSF), one of the National Implementing Entities (NIEs) has received entity support to enhance capacity of PKSF and relevant personnel involved in GCF mechanisms for enhancing climate finance.

So, there are resources available to be more competent and prepared for better management of climate finance. If we look at the trend of the projects approved in the recent GCF board, most of the projects awarded out of the 15 went to Multilateral Entities like UNDP, FAO etc.

As a result, there is a chance that the projects are driven by the agencies rather than the actual needs of the most vulnerable and the capacity of the NIEs become questionable also.

Bangladesh NDA has developed Country Program (CP) for enhancing access to Green Climate Fund (GCF) over the next three years. It is very important that the concepts are enhanced with strong climate rationale and emphasise our vulnerability.

It is recognised that it is not only the vulnerability that attracts funders or donors, rather it is equally important to prove strong transparency and accountability for each dollar being spent. Several issues are particularly important, like, institutional capacity and coordination mechanisms to govern and coordinate climate finance, having comprehensive ESS policy, Monitoring and Evaluation (M&E) system, and other core components like addressing the need of gender and indigenous people.

Most of the organisations often hire international experts to articulate these issues which requires lengthy procurement process as well as organisations have to depend on the consultants.

Consultants are important to ensure good quality of work, but it is more important to improve the technical capacity of the organisation to increase the efficiency of climate fund management, both at the national and local levels, for better management of the project.  

In this regard, equal focus should be given on building the capacity of national and local institutions to access and manage climate fund. One of the important agendas should be organising lots of stakeholder consultation, particularly at local level, engaging community and local institutions in technical analysis and familiarising them with the process. It is important to think of long-term vision rather than having lot of projects in the short time without being capacitated to manage them properly. As a result, it is important to strengthen the overall governance and coordination mechanisms, institutional capacities, and planning and programming frameworks towards a transformational long-term climate agenda and focus more on "getting ready" for climate financing.

It is expected that considering the vulnerability, Bangladesh will be receiving more of climate finance in the future. To address these challenges, we should prepare to be compatible with the Green Climate Fund as well as requirements of other institutions such as the GEF, Adaptation Fund, the Climate Investment Funds, and new evolving financial mechanisms with the country's planning, programming, budgeting, and monitoring and evaluation mechanisms.

Besides, Bangladesh's institutional mechanisms related to climate finance will need to be compliant with the mentioned institutions, and be fully integrated with the country's national plans, policies, and sustainable development priorities. Otherwise, Bangladesh will fall behind in the race of getting international climate finance.

A S M Marjan Nur, Research Coordinator, Centre for Climate Change and Environmental Research (C3ER), BRAC University. The author can be reached at [email protected]