Climate Finance Readiness: Lessons from Developing Countries 6 October 2014 NDB Workshop, Washington DC Prepared by: Chantal Naidoo, Senior Associate E3G – Third Generation Environmentalism Chantal@thomasgresham.co.za / chantal.Naidoo@e3g.org

Climate finance as a bridge to economic transformation? Strong momentum building in both developing & developed countries for climate action – regardless of the negotiation contexts Resources are available at various levels although their adequacy and predictability may be in question Ambitions in accessing finance for climate action Short term v long term International pressure v national imperatives Standalone actions v economic integration Playing fields are not level in developing countries Complex interaction of multiple variables Readiness / preparatory activities play a key role October 2014

Theme #1: Planning and national contexts Political leadership – planning & accountabilities Structure of economy and current challenges/opportunities National development priorities – job creation, conflict, economic priority shifts Climate vulnerabilities & needs (infrastructure, dependencies) State and structure of the domestic financial system Integration across government planning – national and sub-national Country examples: LAC e.g. Colombia, Peru Africa e.g. Ethiopia, Mali, Zambia October 2014

Theme #2: Process and stakeholders Multi-stakeholder engagements - developing a cohesive country proposition Public and private sector relationship - existing v future potential Involvement of international development partners – existing v future potential Awareness and building among key stakeholders – govt, private sector, CSOs Deepening impact – national and sub-national level Country examples: LAC e.g. Peru, Colombia, Chile Africa e.g. South Africa, Ethiopia October 2014

Theme #3: Institutions and then what? Institutional strengthening – natural extension of expanded government mandates Innovations emerging at institutions – national funds, new products Identification of appropriate entities and partners to support government Shift towards programmes v individual projects – scale and replication vision Accreditation for specific funds major focus – going through process Country examples: LAC e.g. Peru, Colombia Africa e.g. Ethiopia, Namibia, South Africa October 2014

View #1: Focus on a particular fund / financing proposal Investment Allocation Risk Institutions Reporting For example: would a country may be ready if it has … A climate investment plan aligned with its national development priorities that is supported by multiple stakeholders at country level with defined priorities that are aligned to core investment criteria – with a specific funding request ($$$) and where possible, identification of the key instruments needed for implementation (i.e. loans/grants/other) and implementing partners that are accredited by the Fund

View #2: Long term economic transformation Readiness for what? Source: “Resourcing NAMAs – Stepping stones in a national climate financing strategy”, June 2014, www.e3g.org October 2014

Where do NDBs fit into readiness? TRANSLATOR of government policy DEVELOPER of programmes INNOVATOR on financial products BRIDGE public and private sector INTEGRATOR of development and climate GENERATOR of policy feedback loops October 2014