Reaching those that need it most: learnings for climate finance programmes

News, 2 April 2015
Representatives from Nepal, Bangladesh, Rwanda and Ethiopia, including government stakeholders, researchers, civil society groups and multilateral bodies, such as the Green Climate Fund, this week discussed how climate finance can better reach the people who need it most – the poorest in society.
"This workshop aimed to generate a shared learning on how climate financing for low-carbon climate resilient development can better reach the people who need it most" said Neha Rai about the event to discuss accessing climate funds for low-carbon resilience development projects (Photo: Neha Rai/IIED)

"This workshop aimed to generate a shared learning on how climate financing for low-carbon climate resilient development can better reach the people who need it most" said Neha Rai about the event to discuss accessing climate funds for low-carbon resilience development projects (Photo: Neha Rai/IIED)

Dr Bharatendu Mishra, the Government of Nepal's national planning commission member, opened the workshop, which was organised by Clean Energy Nepal (CEN) and the International Institute for Environment and Development (IIED) and held in the Himalaya Hotel in Kathmandu from 30-31 March.

The workshop looked specifically at the issue of accessing climate funds for low-carbon resilience development projects and how the needs of some of the world's poorest communities are impacted by their wider political environment and national decision-making.

Low-carbon resilient development policies aim to support climate-resilient development, while also addressing climate change by reducing carbon emissions and supporting development in what should be a win-win policy agenda.

In a world where developing countries are most impacted by climate change, this is increasingly being recognised as the most financially responsible way to invest in a country's infrastructure and wellbeing. 

In recent years, a number of countries have begun to develop and implement these strategies in an effort to promote long-term national development, but it is difficult to say that this finance is currently reaching the poorest of the poor. 

Investments can help families to adapt to the changing environment. New products, or investment in new technologies, can make a difference but come at a cost, which cannot be shouldered by the poorest families. 

Neha Rai, senior researcher in IIED's Climate Change Group, said: "This workshop aimed to generate a shared learning on how climate financing for low-carbon climate resilient development can better reach the people who need it most. We specifically wanted to look at how each country's political economy helps or hinders this process."

Many innovative programmes are taking place within developing countries, but the lessons learned rarely get shared at the all-important international level, where many of the funds originate. One emerging solution could be to tie incentives to encourage investments for the poor.

IIED has been conducting research on the political economy of climate-resilient development planning since 2013. 

This research focuses on countries such as Bangladesh, Ethiopia, Rwanda and Nepal, who are investing in low-carbon climate resilient development, and examines how the political economy constrains or enables the planning and implementation of this agenda.

Special purpose agencies have been set up by both Nepal and Bangladesh and national development banks have been engaged within Rwanda, Ethiopia and Bangladesh to ensure finance builds resilience among the poorest.

Among the examples are the Alternative Energy Promotion Centre (AEPC) in Nepal, the Development Bank of Ethiopia, the Bangladesh Central Bank and the Infrastructure Development Company Limited (IDCOL) in Bangladesh. IDCOL has provided 3.5 million solar home systems and, despite initial bottlenecks, changes to policies – including offering low-interest loans and smaller cost-effective products – have changed that (PDF).

Asif Iqbal, deputy director of Bangladesh Central Bank, said: "This event has focused on the better and more effective understanding of the required policy responses for public-private investment flow to low-carbon climate-resilient development in developing and least developed countries. Moreover, the cross-country experience sharing has widened the window of thinking towards future."

Rai added: "The next steps will be to share the valuable learnings from this workshop on how climate financing investments can be made more equitable, inclusive and reach out to poor.

"In a year when the global community hopes to achieve more for the world's most vulnerable people than ever before, we must make sure that the international solutions both fit and get to these groups."

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