In addition to supporting National Designated Authorities in the nine participating countries of the UN Environment/UNDP/WRI Green Climate Fund Readiness Programme, the Governments also requested support for direct access to the GCF, through the accreditation of qualified national direct access entities (DAEs). In the first half of 2017 alone, six banks and funds were supported to submit their accreditation applications to the GCF, and a further three are expected to submit before the end of the year. Having a DAE in place significantly helps countries to achieve their National Determined Contributions under the Paris Agreement, as DAEs are the materialization of country ownership of GCF finance.
The nine institutions seeking accreditation which have received support from the Readiness Programme include the Fiji Development Bank (FDB), the National Trust for Nature Conservation (NTNC) in Nepal and Development Bank of El Salvador (BANDESAL) in El Salvador.
Being accredited as direct access entities will enable these bodies to access and sequence finance from the Green Climate Fund to implement crucial climate change adaptation and mitigation interventions. This is significant as it enables the institutions to lead, in partnership with the NDA, national efforts to tackle climate change risks.
In Fiji, FDB already provides financing that contributes to the development of the Fijian economy as the sole Development Financing Institution (DFI) in the country. To date, the Bank’s core focus has been developing small and medium businesses in the agriculture and the manufacturing sectors. With the support of the programme, FDB has put in place important policies required by the GCF on environmental and social safeguards and gender inclusion for all climate investments, allowing it to be better placed to become accredited.
“By accessing the global funds directly, FDB will be able to mobilize financing that develops and uplifts small and medium business and corporates’ capacity to respond to the impacts of climate change and promote climate-proof development in the country,” said Nafitalai Cakacaka, FDB General Manager Business Risk Services, and FDB’s chief liaison personnel to the Green Climate Fund Secretariat in Fiji.
Mr. Cakacaka said accreditation would not only enable FDB to support small and medium Fijian businesses to incorporate climate risks into their operations and business plans, it would also position Fiji as a leader in climate finance in the region, inspiring its neighbours to follow their lead.
“As a Direct Access Entity, FDB will be able to support ‘green banking’ concept and principles and set exemplary standards for its neighbouring Pacific Small Island Developing States to also adapt to sustainable approaches that promote climate-proof development and Green Banking concept and principles as well,” said Mr Cakacaka.
In Nepal, the National Trust for Nature Conservation has a long history of leading on climate change adaptation, working with people living in protected areas to change their farming practices to adapt to climate risks and reduce negative impacts on the environment.
“We have very good experience in dealing with different climate change issues, which is why it made sense for us to seek our Government’s nomination to apply to become a direct access entity for Nepal. We are also in a good position to help build the capacity of other national institutions to deliver climate change related projects,” said Dr. Manish Raj Pandey, NTNC Senior Conservation Officer.
Dr. Pandey said accreditation was an important first step in a country’s ability to lead its own efforts to meet its Nationally Determined Contributions made under the Paris Agreement.
“Accreditation is simply the beginning. The next step is to develop projects based on needs, and then to deliver them. Not only is this good for our organisation, it is good for our country as well.”
BANDESAL has provided over USD 73 million in climate investments in the last decade, funding mitigation efforts such as renewable energy initiatives. According to Haydee Mendoza, BANDESAL Marketing Intelligence Officer in El Salvador, the process of becoming a DAE has allowed BANDESAL to “become a more solid and robust institution, especially after taking advantage of all the support provided by [the Programme] to strengthen the Bank’s administrative, operating and control areas.”
Through this process, BANDESAL was able to verify “the soundness of its transparency policies, as well as its fiduciary management and environmental and social safeguards policies,” said Ms. Mendoza. It also provided an opportunity to “reinforce those areas in which some weaknesses were found, including in our gender and social policies. This process is also helping us to build a more robust institution”.
Ms. Mendoza said accreditation would enable processes to be more nationally led.
“If BANDESAL becomes an accredited entity, a national institution will structure and request funds for projects which meet national climate priorities in line with our commitments to the Paris Agreement, thus providing a valuable contribution to society and environmental solutions and social projects that can be used by national companies,” she said.