Financing Climate Change Adaptation in Transboundary Basins

31 Financing Climate Change Adaptation in Transboundary Basins TABLE 3.1. Elements of the Project Cycle Preparatory phase • National and basinwide climate impact studies • Stakeholder consultations • Transboundary climate change study (mitigation and adaptation) • Development of transboundary adaptation strategy • Identification of relevant national policies, regional development strategies, and so on • Review of national and transboundary development plans, policies, and projects to identify alignments and synergies • Information gathering on existing adaptation practices and tools • Identification of potential funds, private sector partners, institutional partners, other financing sources Project identification • Priority setting • Cross-governmental and stakeholder consultation: RBO or other transboundary body carries out stakeholder consultation, including with relevant national authorities • Aligning or complementing existing projects • Risk assessment with climate lens • Climate impact and needs assessment (based on impact studies) Project preparation and review • Acquisition of information on project proposal rules and instructions • Design of project components in cooperation with transboundary stakeholders and according to donor requirements • Development of budget • Development of compelling arguments for transboundary project • Approval of NDAs in all concerned countries, as applicable depending on funding source • Design of monitoring and evaluation component • Preparation or revision of proposal with the financing institution or adviser Financing negotiation (loan, grant, or other sources, if applicable) • Definition of financing terms • Setting of loan repayment period (as applicable) • Conditions for reporting or repayment • Procurement and decision-making rules table continues next page It is critical to conduct climate-lens analysis at all design stages of the project cycle, as each stage has a distinct role toplay. Table 3.1 summarizesmainelements and subcom- ponents of a project cycles (based on project cycle criteria from various institutions) and illustrates how climate change adaptation can be integrated at each level. Some aspects of the project cycle are prepared exclu- sively by the recipient, some are carried out by the finan- cier, and other stages are cooperative or co-generated. An institution with its own discretionary funding, such as an RBO, could have its own project cycle to identify and implement projects funded internally. Typically, however, an RBO will be a project proponent for support from a financing institution, for which the latter’s project cycle will therefore apply. 3.4 Managing Risk Managing risk is a key measure to improve the bankabil- ity of a transboundary river basin project. Helping with removal of obstacles to investment by the private