Resource: NDC Quick-Start Guide (finance module)
Published by: CDKN
When we speak to Emelia Holdaway, who leads the international climate change policy team at Ricardo Energy and Environment, she has just returned from a trip to West Bank, supporting the Palestinian government in the first phase of financing its draft NDC. If it’s true that the best learnings come from the most challenging circumstances, then there is probably no better place to start than the newest Party to the UNFCCC, which the State of Palestine joined in March 2016.
“As with many countries,” Holdaway says, “the first step in Palestine is capacity building.” And the very first step towards that is getting the right people in the same room. The State of Palestine has set up its National Committee on Climate Change, which brings together all the relevant ministries, as well as academia, NGOs and the private sector. Holdaway was asked to work with five of the ministries that are key to NDC implementation – agriculture, energy, environment, transport and water.
Hands on capacity building
“This is ‘on the job’ capacity building,” Holdaway says, “working with the ministries on their first applications to the GCF. For each of these ministries, it’s one of the first times they have developed a climate finance proposal, for any donor. What we are doing in this process is starting to convert the NDC into a project pipeline, with different ministries picking out projects from the NDC and scoping those into concrete funding proposals.”
“What’s coming out of this,” Holdaway goes on, “is how important it is to find quick wins, that satisfy development as well as climate needs. So I have been saying to these ministries, what are your top development projects? Let’s find ones that align with the NDC that we can then put in front of climate finance providers.”
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One project that leapt out in this regard was a desalination plant in the Gaza Strip. With the lack of ready access to water and energy, this plant, which is proposed to be partially solar-powered, has the potential to double water availability in the Strip. “Significant financing looks possible from various sources,” Holdaway says, “but because of the mitigation and adaptation elements of the project, the GCF could now be the funder that closes the final gap and gets this hugely important development initiative under way.”.
That’s something I always do – signpost potential private sector involvement
She has also suggested to those leading the funding proposal that if there are revenue streams available from the plant in due course – such as sales of water or power – there could potentially be a private sector interest in the financing. “That’s something I’ve done for each of the projects we have looked at in Palestine, to signpost possible private sector angles and suggest these be given consideration where appropriate.”
Turning to the Quick-Start Guide to NDC implementation (QSG), of which she authored the finance module, Holdaway says that pilots are under way in Kenya, Zambia and Uganda, supported by the Climate and Development Knowledge Network. A large part of the purpose of the pilots will be to develop the capacity of local consultants to use the QSG to contribute to NDC implementation over the longer term.
“It’s too early to say exactly how the QSG is working in terms of a full implementation plan in any of these countries, but feedback to date has been positive.” The QSG will also be used in workshops in Rwanda and Ghana, supported by GIZ (the German development agency). “So we are seeing take-up of the QSG in various ways.”
On the ground implementation in Thailand
How the process for NDC implementation might work itself through at country level is exemplified in another project, also GIZ-funded, in Thailand. “There,” Holdaway says, “we are working with the government to do an initial gap analysis on all aspects of NDC implementation, using the QSG as the framework for undertaking this analysis. The main work will be with the NDC focal point in the government (the Office of Natural Resources and Environmental Policy and Planning) but we will also be interviewing people in other departments to identify gaps in their capacity to implement the parts of the NDC relevant to them, including the back-end monitoring. On the finance side specifically, the Thai government is looking to us to help them understand what the logical steps would be towards developing a climate investment plan.”
And the next steps after this phase? “That’s for them to judge,” Holdaway says, “but typically we would advise that they prepare an overall NDC implementation plan, drawing on the gap analysis, then put together a capacity building plan for all the ministries that will be involved. “In Thailand, because the local financial markets are relatively well developed and there are some very capable national institutions, you would also hope that the country could move quite quickly to develop a climate investment plan, not just looking at international finance, but also ways of scaling up domestic fiscal support and engaging with the private sector.”
To date, even in the more advanced countries, it has been about developing the overall NDC implementation plan
Holdaway says that she has yet to see a country that has got much beyond this planning and preparation phase since Paris. “To date, even in the more advanced countries, it has been about developing the overall NDC implementation plan, developing sectoral action plans and working with the ministries that will have to implement them. Challenges differ greatly from sector to sector, even within the same country. I’ve yet to see a country develop a full national climate investment plan, one that covers all economic sectors, but the concept definitely has wind under its wings, so watch this space.”
Holdaway notes the importance of countries doing their homework and thinking strategically about how they seek funding. “Different climate funds are set up in different ways, with different ticket sizes and criteria for what they can finance, so it’s important to think strategically about which projects are put in front of which funders.” In this way, countries can start to piece together a co-ordinated programme of projects that are likely to appeal to selected finance providers. “What can I send to the GCF? What would be better going to the Adaptation Fund? What’s the agenda of the various bilateral funders that my ministry works with?”
The work she has been doing in Palestine has shown Holdaway that the ‘hands-on’ challenges of making funding applications has been a great way to build capacity while at the same time securing some quick wins.
“No one should hold off on everything else and just do NDC planning for the next two years,” she says. “Look for those quick wins and seize the momentum behind Paris to get ministries on board with getting their top three or five projects funded for their sectors. They may not be the projects with the greatest greenhouse gas reductions or biggest resilience impacts, and it might involve ‘greening’ a development project, but let’s get them funded to create broader buy-in across government for climate change action – building that buy-in will be as important as anything else we do to implement NDCs.”
Emelia Holdaway leads the International Climate Change Policy team at Ricardo Energy & Environment, with 20 years of environmental sustainability and climate change experience. She has specialist knowledge in energy and climate change policy development and analysis, climate finance, international negotiations and capacity building. Emelia oversaw Ricardo’s Intended Nationally Determined Contributions (INDC) support to over 15 countries in the lead up to Paris, and was the lead author for Ricardo/CDKN’s ‘Quick-Start Guide to NDC implementation’. She is now involved in supporting countries to implement and finance their NDCs.