Climate Investment Funds: Understanding the PPCR in Bangladesh and Nepal

May 27th, 2013 | By | Category: Adaptation, Development and Climate Change, Financing, Information and Communication, International Agencies, Lessons, Mitigation, News, Publication

Adaptation fund logoIIED: The Pilot Programme for Climate Resilience (PPCR) now operates in nine countries and two regions. It aims to support these countries and regions to prepare and implement climate resilience programmes that are long term and integrated into wider poverty reduction and development planning. Sharing early insights gained from the experiences of two pilot countries — Bangladesh and Nepal — can help to inform the on-going PPCR implementation process and offers early guidance on issues that may arise in delivering transformative programmes.

Developing countries’ vulnerability to climate risks, and their growing need for climate finance to support adaptation measures, is widely acknowledged. The scale of ‘climate finance’ available at the global level has increased in recent years and the Pilot Programme for Climate Resilience (PPCR) is an example of one of the largest resources. The PPCR is the ‘adaptation arm’ of the Strategic Climate Fund, funded through the World Bank-administered Climate Investment Funds (see PPCR in a snapshot, overleaf).
The PPCR was introduced in 2008 to bridge the finance gap between developing countries’ needs and responses to climate change. It was designed to take an innovative and programmatic approach, in comparison with short- term project-focused approaches. But the PPCR has its critics who disapprove of the role given to the multilateral development banks (MDBs) and the inclusion of non-grant finance (concessional loans) for adaptation.
Despite these tensions, the PPCR anticipates providing a model for innovative global adaptation finance. It has introduced several novel features designed to address the limitations of previous climate programmes.
  • Tailored and flexible programming. Funding is designed to be tailored according to a country’s needs, by developing a country-specific Strategic Program for Climate Resilience (SPCR).
  • Country led. The programme aims to facilitate country ownership when planning and implementing the SPCR, including integrating funding into existing development strategies.
  •  Private sector involvement. The PPCR aims to foster private sector involvement, using donor finance to leverage further private sector finance.
  • Programmatic approach. The aim is to support a programme of interventions that together deliver a transformational approach, going beyond ‘businessas usual’ interventions that usually take a sector by sector, or project by project, approach.
This initial assessment of how Bangladesh and Nepal are interpreting the PPCR’s aims shows clearly how objectives can be differentiated across participating countries. Political economy dynamics, country leadership, varying interests and country circumstances all heavily influence interpretation and implementation. Further work will explore the political economy
dynamics of implementing the PPCR, but for now, the lessons emerging from this preliminary assessment are:
  • Flexibility over how climate finance should be disbursed is crucial for ensuring continued government ownership, but should not neglect essential prerequisites, including appropriate planning, that are key for delivering actions.
  • Overall, it seems managing stakeholder expectations from the start is vital to fostering country ownership, and hence the leadership needed for smooth implementation. Where country leadership is strong, care must be taken that one or two lead actors do not dominate the planning process.
  • Given the complexities involved in engaging the private sector, a new approach may be necessary. As well as preparing private actors and providing incentives for them to provide climate services, it is clearly important to prepare the public sector to harness private sector involvement. Public-private partnerships are one way to foster greater trust.
  • Tansformational change may be interpreted according to country needs, but needs to integrate climate resilience right across national development planning. It will be important to ensure pressure for quick results does not discourage policymakers from creating an enabling environment for transformational change. Prioritising investment into short-term, ‘quick result’ infrastructure projects risks maintaining ‘business-as-usual’, rather than piloting long-term transformations.

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