Financing Climate Change Adaptation in Transboundary Basins

35 Financing Climate Change Adaptation in Transboundary Basins 3.6 Recommendations for Developing Bankable Projects Identify the root of the climate change challenge. Identify vulnerabilities and the reasons for climate change–induced problems. What are the broad chal- lenges, and what are the root causes for vulnerability? Why are they not already addressed? Is there a trans- boundary component to why the problem has not already been addressed? Nonclimate-related factors are also at the heart of the matter. Understanding the causes of the problem in their causal relationship to climate change is critical for formulating an appropri- ate adaptation response. Ensure design and scope specific to climate adaptation . Define the problem. Describe the climate change impacts directly responded to by the adaptation proj- ect, including possible transboundary impacts. Make reference to existing assessments and studies as well as documents such as NAPS and NDCs, and demon- strate the benefits of a transboundary approach (such as sharing data and locating measures that may have an optimum effect). Understand the financing landscape and establish rela- tionships with financing partners . Resource mobiliza- tion for adaptation and resilience building in a transboundary context requires a strong knowledge of the full array of public and private financing sources and the many funds and options offered in each cate- gory. Not all funds and donors accept transboundary projects, or they may have restrictions about the types of institutions with which they will partner. Beyond understanding which funds exist, policy makers should develop direct relationships with people in each fund who are responsible for project selection in the respective region or for working in transboundary river basin contexts. Advocating for the benefits and opportunities inherent in transboundary approaches to resilience building and adaptation to climate change is a crucial step to capturing the interest of financing institutions. Understand and follow funding processes carefully and precisely to ensure eligibility and to maximize chances of success . Althoughmany funds serve similar target groups and issues, eligibility criteria and procedures for access- ing financing vary significantly and are often complex. Identify, communicate, and address potential risks . To strengthen bankability of a project, proponents of transboundary river basin projects should be able to identify risks and demonstrate their ability to manage these. Risk management can be quite technical and may require involving additional experts and advisers during project development and design. Support regional planning and mainstreaming . Aligning climate financing with existing river basin planning is critical to ensure the efficiency of resource use and the long-term sustainability of a project. Bankable climate adaptation projects will strive to complement and sup- port ongoing implementation of river basin develop- ment strategies and planning. As such, projects should reference the strategies or tools and how they either support or could be supported by climate financing. In turn, river basinmanagement plans and climate invest- ment plans can consider andmake reference to climate finance opportunities. Align projects with existing climate and development strategy and policy. Virtually all financiers require proj- ect proponents demonstrate alignment with existing policies. Capture co-benefits . It is possible, and often attractive to donors, for project proposals to identify multiple co-benefits. Without forcing the interlinkages, a mitiga- tion project that reduces carbon dioxide might also build the resilience of a community to the impacts of climate change. In other instances, mitigation or adap- tation projects can also protect human health, restore biodiversity, or advance economic development. These types of projects are attractive because of the exponen- tial benefits. They open opportunities for alternative sources of support and financing. Common examples of such projects are reforestation or forest protection