Latest update on climate adaptation finance

The SDG Knowledge Hub of the International Institute for Sustainable Development (IISD) provides the July update on global developments in climate adaptation finance.


Adaptation Finance Update: Experience Sharing Enhances Access to Climate Finance, Improves Adaptation Practices

During the month of July, several adaptation programmes around the world achieved access to climate finance. The Adaptation Fund approved a pilot South-South cooperation readiness support package to foster cooperation on adaptation project development, accreditation and access to climate finance. The Asian Development Bank (ADB) finalized its long-term corporate strategy to 2030, with 75% of its committed operations supporting climate change mitigation and adaptation.

Adaptation Fund Enhances South-South Cooperation on Adaptation Project Development, Approves Projects Over US$35 Million Worth

The Adaptation Fund has a growing community of 28 accredited national implementing entities (NIEs) sharing similar intents and needs. According to Mikko Ollikainen, Manager of the Adaptation Fund Board (AFB) Secretariat, learning from each other’s lessons can be mutually beneficial in enhancing access to climate finance and improving adaptation practices.

In line with this idea, and building on the Fund’s South-South Grant Programme, the AFB approved a pilot South-South cooperation readiness support package, including a US$100,000 grant to enhance access to climate finance. Specifically, the Fund’s national implementing partner in Senegal will provide peer guidance to the Governments of Burundi and Mali throughout the process of having NIEs in each of those countries apply for accreditation with the Fund.

The AFB also approved US$35 million for four new climate change adaptation projects across Latin America, West Africa and Asia. The Board further endorsed three climate change adaptation project concepts with US$257,200 in project formulation grants for implementing partners in: Côte d’Ivoire and Ghana; Kazakhstan, Tajikistan and Uzbekistan; and Djibouti, Kenya, Uganda and Sudan.

In Ecuador, the Development Bank of Latin America (CAF) will implement a US$2.4 million project to strengthen adaptive capacity of local populations in the Toachi-Pilatón watershed with ecosystem- and community-based integrated adaptation approaches.

In Chile and Ecuador, the CAF will implement a US$13.9 million regional project to reduce climate vulnerability in urban and semi-urban areas in three coastal cities. The project also aims to lessen vulnerability to floods, mudflows and landslides by mainstreaming risk-based approaches to adaptation.

In Benin, Burkina Faso, Ghana, Niger and Togo, the West African Development Bank (WADB) will implement a US$14 million regional project to promote climate-smart agriculture, disseminate innovative and regional agricultural best practices and knowledge.

In Mongolia, a US$4.5 million project by the UN Human Settlements Programme (UN-Habitat) seeks to enhance climate resilience to flooding in seven vulnerable Ger (nomadic tent) settlements in Ulaanbaatar, and to reduce their vulnerability to wind and dust storms and air pollution.

ADB Builds Resilience in the Region, Agrees Long-Term Corporate Strategy 2030

ADB and the Philippines National Economic and Development Authority and Department of Finance signed a memorandum of understanding (MoU) covering an indicative US$7.1 billion sovereign lending program to the country from 2019-2021 to support the government’s ‘Build, Build, Build’ program. US$4.5 billion will be allocated for projects that connect regions and communities and manage urbanization, such as railways, bridges, roads and flood management. The remaining third of the pipeline will focus on policy support and social assistance in the areas of inclusive finance, capital market development, local government development and youth employment.

Cambodia received a US$90 million ADB loan supporting projects aimed at strengthening climate resilience and modernizing the agriculture sector using advanced technologies. The Climate-Friendly Agribusiness Value Chains Sector Project received an additional US$10 million loan and a US$30 million grant from the Green Climate Fund (GCF). Cambodia and beneficiaries contribute US$11 million. The project, to be completed in the third quarter of 2024, focuses on climate resilience of critical agricultural infrastructure while helping improve the competitiveness of the value chains of rice, maize, cassava and mango production. Activities include: rehabilitation of irrigation and water management infrastructure; upgrading of agricultural cooperatives’ value chain infrastructure; improvement of farm-to-market roads; upgrading of infrastructure for safety and quality testing; and promotion of renewable energy.

ADB and Switzerland agreed to support Pakistan’s National Disaster Risk Management (DRM) Fund which finances high-impact investments in disaster risk reduction (DRR) and preparedness. The Swiss Agency for Development and Cooperation (SDC) will provide 1.5 million Swiss francs and technical assistance to the fund. The initial financing of the fund was made through an ADB loan to Pakistan, equivalent to US$200 million, and a $3.4 million grant from the Government of Australia. The fund will finance up to 70% of the cost of eligible projects that will enhance Pakistan’s resilience to extreme weather events and other natural hazards.

ADB adopted its long-term corporate strategy, Strategy 2030, which aligns with the SDGs, Addis Ababa Action Agenda (AAAA), Paris Agreement on climate change and Sendai Framework for DRR. Under the strategy, by 2030, 75% of ADB’s committed operations will be supporting climate change mitigation and adaptation. Climate finance from ADB’s own resources is expected to reach US$80 billion for the period 2019-2030.

Focus on support for the region’s poorest and most vulnerable countries as well as infrastructure investment remain the Bank’s priorities. ADB will expand operations in social sectors and strengthen its country-focused approach, promote the use of innovative technologies, and deliver integrated interventions through a mix of public and private sector operations.

Specifically, ADB’s support will focus on seven operational priorities: 1) addressing remaining poverty and reducing inequalities; 2) accelerating progress in gender equality; 3) tackling climate change, building climate and disaster resilience and enhancing environmental sustainability; 4) making cities more livable; 5) promoting rural development and food security; 6) strengthening governance and institutional capacity; and 7) fostering regional cooperation and integration.

World Bank Improves Resilience, Food Security, Inclusive Growth in Mali

The World Bank approved US$172 million of International Development Association (IDA) financing to improve agricultural productivity and resilience of drylands communities, foster inclusive growth and support social protection in Mali.

US$60 million in IDA grant and credit finance is allocated to the Mali Second Poverty Reduction and Inclusive Growth Development Policy Operation. The project aims at increasing security of tenure and improving competition in the telecommunications sector through policy reforms with respect to land tenure, energy, agricultural subsidies, telecommunications, social protection and microfinance.

Another US$60 million goes to the Mali Drylands Development Project, which aims to reduce the impact of drought and climate change on poor populations in the country’s northern region through various interventions. These measures combine direct and productive cash transfers with the delivery of agricultural inputs, services and infrastructures while supporting community and national institutions.

The Mali Safety Nets Project received additional financing of US$52 million through an IDA grant. This project aims at increasing food security and resilience of poor and vulnerable households by providing quarterly cash transfers to over 390,000 individuals, of which 49% are women.

CDB Enhances Climate Resilience in Road Infrastructure Projects

The Caribbean Development Bank (CDB) expanded the scope of an ongoing road transport project to include Dominica, given the devastation caused by Hurricane Maria in 2017. The project consists of a study on approaches for mainstreaming climate resilience into the road transport sector in the Bank’s borrowing member countries (BMCs) as well as the piloting of these approaches in Guyana, Saint Lucia and now Dominica. The aim is to assist governments in investment decisions in their road networks to improve their resilience to climate-related events.

The Project is being implemented under the African Caribbean Pacific-European Union-Caribbean Development Bank Natural Disaster Risk Management in CARIFORUM Countries (ACP-EU-CDB NDRM) Programme. In the aftermath of Hurricanes Irma and Maria, CDB and the EU agreed that €500,000 would be provided to support recovery efforts in affected BMCs.

UN-Habitat, UK Collaborate on Urban Resilience

UN-Habitat announced a collaboration with the UK Government on the Strategic Development Phase of the Global Future Cities Prosperity Fund Programme. The focus of the Strategic Development Phase, led by UN-Habitat’s Urban Planning and Design Lab, is to support sustainable urban development while achieving inclusive prosperity. The project involves assessing the viability of urban interventions related to urban planning, transportation and resilience, and assessing levels of stakeholder engagement.

The Global Future Cities Programme aims to promote sustainable and inclusive economic growth in 19 cities across ten countries worldwide, including Turkey, Brazil, South Africa, Nigeria, Indonesia, Malaysia, the Philippines, Viet Nam, Myanmar and Thailand. It supports overcoming development challenges that arise with increasing rapid urbanization, climate change and urban inequality, which can lower long-term growth prospects of cities. The Programme contributes to achieving the SDGs and implementation of the New Urban Agenda (NUA).

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