Financing Climate Change Adaptation in Transboundary Basins

29 Financing Climate Change Adaptation in Transboundary Basins focus, and procedures. As such, resource mobilization begins with identifying the correct financing partners and exploring compatibility. Some institutions provide direct access (e.g., Adaptation Fund [AF]; Green Climate Fund [GCF]; nongovernmental organizations [NGOs]; and private investors), while others require a national or international implementing agency, such as a national implementing entity (NIE) (e.g., GCF) or an international agency such as the United Nations Development Programme (UNDP), the United Nations Environment Program (UNEP), or the World Bank. Each type of access has its special characteristics. Further, financing institutions each have criteria for climate adaptation projects, such as (i) providing the most benefits to the greatest number of people; (ii) providing for effective implementation; and (iii) ensuring sustainability over time. Sustainability can be affected by such factors as a national govern- ment’s willingness and ability to carry projects beyond the period of initial investment or finance. When insti- tutions already finance related (or nonclimate change– related) projects in the basin, they might be eager to complement ongoing work with an additional climate adaptation project. European Investment Bank criteria for bankable projects: • Project meets at least one of the EIB’s objectives • Is technically sound • Is financially viable • Shows an acceptable economic return • Complies with environmental protection, social standards and procurement regulations 3.2 Stage 2: Project Preparation Climate change impacts on water resources are numer- ous, and actions required to avoid or address these impacts are often similar to traditional water resources management interventions. Climate adaptation financ- ing is typically designed to cover only those projects or project elements that address climate change impacts. Establishing an irrefutable link to climate change is essential in any climate finance proposal. While this may seemobvious, it is one of the most common errors or weaknesses in project proposals. These links should also be carefully considered when developing an adap- tation financing strategy. Climate finance, and especially financing for adaptation, is similar to yet distinct from development finance. Recognizing and being able to articulate the difference between climate and development finance are crucial to securing funds for climate-related activities. Climate change finance is any national, regional, or interna- tional financing provided for activities or projects that address the causes or impacts of climate change. Clearly articulating the “climate rationale” in a transboundary basin is critical to any bankable project. Test your climate rationale by asking the following questions for each project component: • What is the problem I am trying to solve? • How is the problem caused by the onset of cli- mate change (chain of causation)? • What is the proof (scientific data or climate infor- mation) for question 2? • Will project implementation prevent impacts, build resilience, or otherwise help the target group to adapt? And if so, how? To be eligible for climate finance, a project must clearly establish how it will respond to climate change impacts by stating the expected impacts, as supported by scientific findings, and by demonstrating how the project activities and elements directly address those impacts. Developing bankable project proposals for transboundary river basins arguably requires a third