Financing Climate Change Adaptation in Transboundary Basins

30 Financing Climate Change Adaptation in Transboundary Basins requirement beyond identifying and adequately addressing climate impacts: the proposal needs to demonstrate that it is necessary to address those impacts with a transboundary approach, rather than simply a national one. Project proposals must delineate the benefits of a trans- boundary basin approach and demonstrate how potential challenges are being addressed. Climate impacts for transboundary river basins can be found in numerous sources. The first source, if available, is a river basin’s climate impact assessment. Another source is compil- ing the national climate impact studies of every basin country. Every developing country has a National Communication produced for the UNFCC C 1 that details climate impacts, greenhouse gas inventories, and miti- gation and adaptation options, among other informa- tion. The Intergovernmental Panel on Climate Change (IPCC ) 2 also produces comprehensive reports every four to five years that contain topical, regional, and subre- gional information on climate impacts. Many research institutions, universities, local and international NGOs also investigate and report on climate impacts. Preparing a bankable project requires following the proj- ect eligibility criteria, application rules, and procedures: a simple yet fundamental step. Not every project is appro- priate for every financing source; this is especially true for transboundary basin projects and projects pro- posed by RBOs that face distinctive challenges. All cli- mate finance institutions provide detailed information on eligibility, application process, and other funding relevant instructions on their websites. Support for project preparation and to identify the right financing source is frequently provided by development partners and financing institutions. The inherent com- plexities of transboundary adaptation and resilience projects make technical assistance from development agencies and the availability of a project preparation facility especially attractive. If this kind of support is not readily available, an RBO or co-riparian countries could consider hiring an external consultant who spe- cializes in adaptation project preparation to optimize resource mobilization and avoid unwanted missteps. In addition to project preparation funds available through the GCF and the Global Environment Facility (GEF), institutions such as the AfricanWater Facility or regional UNDP offices support the preparation of detailed feasibility studies that will enable lending institutions to make a funding decision for the respec- tive project. 3.3 Using the Project Cycle as Guide Understanding the project cycle of the financing sources targeted with the proposal is an important first step to developing a bankable project. Every public or private institution that invests in project develop- ment has a project cycle that marks every step through which a project passes from conception to post-implementation assessment. Although they contain many similar components or steps, project cycles vary between institutions, and no single approach applies to all potential financing sources. General elements in most project cycles are delin- eated in table 3.1. The project cycle typically begins with project identification based on needs assess- ments, research, or other processes that identify needs and articulate a proposed response. For climate adaptation projects, the potential impact must be clearly and demonstrably linked to climate change and is not simply a development issue involving weather variability or customary climate causes. The project appraisal and design stage follow, during which proponents typically work with potential funders to assess viability and carefully design the detailed content of the project and its budget. After design and approval, the project moves to implemen- tation, funds are disbursed, and the project is carried out. During and after implementation, the project undergoes monitoring and evaluation that allows for adjustments, if needed, to improve effectiveness or provide lessons for future projects. Each stage includes numerous elements and varying degrees of involvement from the project proponents, funders, and other relevant partners or groups.