1. Project Pipeline Development

2. 2 Imprint Published by: Contact adelphi Caspar-Theyss-Strasse 14a 14193 Berlin / Germany T +49 30-8900068-0 F +49 30-8900068-10 E clifit@adelphi.declifit@adelphi.de I www.adelphi.dewww.adelphi.de Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH CF Ready Program Godesberger Allee 119 53175 Bonn/Germany T +49 228-24934-111 F +49 228-24934-215 E info@giz.deinfo@giz.de I www.giz.dewww.giz.de Dennis Tänzler E clifit@adelphi.declifit@adelphi.de T +49 30-8900068-20 www.clifit.org Dorit Lehr E cf-ready@giz.decf-ready@giz.de T +49 228 24934-133 http://www.giz.de/exper tise/html/3041.html Any content written by named authors do not necessarily reflect the views of adelphi nor GIZ nor of the German Federal Ministry for Economic Cooperation and Development. Although the authors take all possible care to ensure the correctness of published information, no warranty can be accepted regarding the correctness, accuracy, reliability and completeness of the content of this information. August 2014

3. 3 Terms of Use This Training Material was developed by adelphi with financial support from GIZ’s CF Ready Program on behalf of the German Federal Ministry for Economic Cooperation and Development. If you would like to adapt this presentation to your needs, please respect the following terms of use: The imprint is mandatory. It may neither be altered nor removed from the presentation and should always be printed out as part of the presentation, if applicable. The German Cooperation, GIZ and adelphi logo must not be moved or removed. No other logos or further information may be placed in the footer area. If you wish to add your own content please indicate in the respective slides that the respective content has been added and that it was not part of the original version provided by the authors mentioned in the imprint. If you would like to make substantial changes to the content of this presentation or have other questions regarding the material, please contact cf-ready@giz.de or clifit@adelphi.orgcf-ready@giz.de clifit@adelphi.org

4. 4 Contents & Objectives

5. 5 Role of project pipelines Need for prioritisation Country examples Key questions Content

6. 6 What you can expect to learn from this session Understand the importance of project pipelines for the implementation of climate strategies and learn about selected examples in other countries Learn about the tools and criteria for prioritisation of projects through which to implement climate policies strategies (exercise)

7. 7 The role of project pipelines in climate policies

8. 8 Definitions Project pipeline: Projects that are between the starting point and the completion point are 'in pipeline‘. Examples of project pipelines: CDM project pipeline NAMA pipeline International funds have their project pipelines Ministries can have their project pipelines

9. 9 Strategic relevance International climate policies encourage the development & implementation of national climate strategies National strategies related to mitigation (Low Emission Development Strategies, NAMA frameworks) and adaptation (NAPAs, NAPs) require: national capacities to access and program climate finance capabilities to develop a pipeline of bankable projects and programmes (e.g. to access international funds) Financial relevance Public budget for climate investments is limited: Project pipelines at national level can help to engage international partners Need to select the most cost-effective projects that are feasible to be implemented within a given time-frame  project prioritization needed Project pipeline – starting point

10. 10 Project pipelines (mitigation/adaptation; sector-related) can serve as a tool for communication (national/international) for structuring the climate policy implementation process for selection what project to finance at what level Interesting for.. International climate focal points within the governments Line ministries Private sector (project developers, banks) International development partners Project pipeline – rationale and target groups

11. 11 The need for project prioritisation during project pipeline development

12. 12 Project prioritization: from a wish list to a short list Source: Cities Development Initiative for Asia (CDIA) 2010 Assessment and ranking Final selection

13. 13 Cost Benefit Analysis (CBA) Assessment of costs and benefits expressed in monetary values, with one main objective, e.g. economic efficiency. Allows the comparison of options across sectors Cost Effectiveness Analysis (CEA) Costs are valued in monetary terms, and benefits quantified in ‘physical’ units Costing of different options that achieve the same objective, producing a ranking in terms of cost Allows for cases with multiple objectives or criteria, but only if quantifiable Multi-Criteria Analysis (MCA) Ranking of alternative options by a number of priority criteria, where important benefits cannot be quantified and valued, e.g preserving biodiversity Allows combining financial/economic criteria with technical, environmental and social ones. MCA can complement CBA or CEA  Data availability will appear to be a major determinant of the method to be used. In practice, political decisions will probably determine selection and prioritization Methods for prioritization and selection of projects Source: UNFCCC Least Developed Countries Expert Group. Annotated guidelines for the preparation of national adaptation programmes of actionUNFCCC Least Developed Countries Expert Group. Annotated guidelines for the preparation of national adaptation programmes of action

14. 14 Multi-Criteria Analysis: potential criteria for selecting projects (I) CountriesFunders Site-specific context (e.g. urgency, social acceptance) High-level political support and / or local priorities Objectives set for mitigation or adaptation planning (e.g. poverty reduction or emission reductions) Potential for transformational change Development benefits Cost-effectiveness Environmental impacts Ease of implementation Stakeholder support Attractiveness to funders Robust MRV or M&E systems Potential for transformational change Embedded in national policy Share of national co-financing Private sector leverage Institutional capacities of implementing entity Replicability Innovation Source: Adopted from: Ecofys 2013. MRV Summer School training materialsEcofys 2013. MRV Summer School training materials

15. 15 Multi-Criteria Analysis: potential criteria for selecting projects (II) Source: Adopted from: Global Climate Change Alliance: Intra-ACP Programme. Module 5. Costing, assessing and selecting adaptation and mitigation options and measures OptionTotal cost / benefit ratio Political support Technical feasibility Development benefits Environ- mental impacts ….Total score Project 1 Project 2 Project 3 Project 4 Scores: For qualitative criteria: range, e.g. from 1 (poorest performance) to 5 (highest performance) For quantitative criteria: monetary or physical units

16. 16 Example I: Investment criteria of Green Climate Fund (I) Coverage area Criterion Impact potential Paradigm shift potential Sustainable development potential Mitigation impact Adaptation impact Environmental co-benefits Social co-benefits Economic co-benefits Gender-sensitive development impact Potential for scaling-up and replication and overall contribution to global low- carbon development pathways, consistent with a temperature increase of < 2 degrees Potential for knowledge and learning Contribution to the creation of an enabling environment Contribution to the regulatory framework and policies Overall contribution to climate-resilient development pathways consistent with a country’s climate change adaptation strategies and plans Source: GCF Decision B.07/06. Annex XIV: Initial investment framework

17. 17 Example I: Investment criteria of Green Climate Fund (II) Needs of the recipient Country ownership Efficiency and effectiveness Vulnerability of the country Vulnerable groups and gender aspects Economic and social development level of the country and the affected population Absence of alternative sources of financing Need for strengthening institutions and implementation capacity Existence of a national climate strategy Coherence with existing policies Capacity of implementing entities, intermediaries or executing entities to deliver Engagement with civil society organizations and other relevant stakeholders Cost-effectiveness and efficiency regarding financial and non-financial aspects Amount of co-financing Programme/project financial viability and other financial indicators Industry best practices Coverage area Criterion Source: GCF Decision B.07/06. Annex XIV: Initial investment framework

18. 18 Example II: Adaptation Fund project eligibility criteria Country Eligibility  Has the government endorsed the project through its Designated Authority? Project Eligibility Resource Availability Eligibility of Implementing Entity Implementation Arrangements Eligibility of Implementing Entity Implementation Arrangements Review Criteria  Does the project support concrete adaptation actions to address the adverse effects of climate change and build in climate change resilience?  Does the project provide economic, social and environmental benefits, with particular reference to the most vulnerable communities, including gender considerations, while avoiding or mitigating negative impacts, in compliance with the Fund policies?  Is the project cost-effective?  Is the project consistent with national strategies for sustainable development, national development plans, poverty reduction strategies, national communications or adaptation programs of action, or other relevant instruments?  Does the project meet the relevant national technical standards, where applicable, in compliance with the Environmental and Social Policy of the Fund?  Is there duplication of project with other funding sources?  Does the project have a learning and knowledge management component to capture and feedback lessons?  Has the project provided justification for funding on the basis of full adaptation cost?  Does the project align with the AF results framework?  Has the sustainability of the project outcomes been taken into account when designing the project?  Does the project provide an overview of environmental and social impacts / risks identified? Source: Adaptation Fund Project/Programme Review CriteriaAdaptation Fund Project/Programme Review Criteria

19. 19 Example III: International Climate Initiative (ICI) Thematic relevance Partner country benefits Efficiency and effectiveness General alignment with one/more of thematic priorities of the ICI Contribution to the creation of enabling political conditions Coherence with and integration into national and/or regional/transnational strategies, international cooperation and synergies with other projects/ sectors Contribution to economic and social development in the partner country Contribution to bilateral cooperation on climate and environment Solidity of the concept, quality of presentation and of the anticipated project management and monitoring Amount of self-financing and third-party financing Coverage area Criterion International Relevance Sustainability of outcomes and replicability of the concept and/or results Contribution to international cooperation (e.g. UNFCCC, Montreal Protocol, CBD) Source: ICI 2015; Information on support for projects under the International ClimateInformation on support for projects under the International Climate Initiative (update 2015)

20. 20 Examples from selected countries

21. 21 Example: Prioritizing mitigation and adaptation options in Kenya Source: Prioritising mitigation and adaptation options as part of the development of a National Climate Change Action PlanPrioritising mitigation and adaptation options as part of the development of a National Climate Change Action Plan Adaptation optionsMitigation options The long-list of adaptation actions were screened based on the following criteria: 1)Is the action timely? 2)Does the action enable climate resilient decisions to be made? 3)Does the action build adaptive capacity? The screening process resulted in a top-10 list of adaptation actions for each of the plan “themes” and incorporated into ‘resilience pathways’ A ‘long list’ of 60 possible abatement options was screened using three criteria: 1)Substantial emission reduction potential; 2)Significant sustainable development and climate resilience co-benefits; 3)Alignment with Government of Kenya development priorities. Screening resulted in 25 options that would be assessed according to their abatement potential, costs, and evaluated against a set of sustainable development and climate resilience indicators. National Climate Change Action Plan (NCCAP) development

22. 22 Messages to take away from a readiness assessment: Limited human capacity to enable climate change mainstreaming. Capacity needed in research and in the public sector and use the great potential of private sector Country is effective in identifying many potential climate change activities through plans and strategies, however it is not clear how these should be prioritised or funded Hence: greater prioritisation and the costing of interventions needed to provide a stronger basis from which to facilitate implementation of climate change activities Project pipeline – Example of needs (I): Tanzania Source: GIZ/ODI 2013a NAPA 2007: ‘wish list’ of six projects with hardly any implementation due to a lack of financing, technological problems and poor governance-related constraints National Climate Change Strategy identifies over 200 ‘strategic interventions’

23. 23 Zambian National Climate Change Response Strategy (NCCRS) draft outlines activities by sector, with estimated costs and outputs. Planned action: ‘Bankable actions/projects development for specific funding opportunities’. Expected output: at least 3 funding proposals developed to request min. USD 200 million Project pipeline – Example of needs (II) Zambia Messages to take away from a readiness assessment: Need for improved capacity and processes to translate the key areas of the NCCRS to a programme of action. Zambia’s climate project track record mainly dominated by international support. Source: GIZ/ODI 2013b Lack of a project pipeline has apparently led to donor competition: agencies have funding available to support climate change actions, but struggle to find viable investments Momentum created by donor projects is reported to be hard to maintain due to lack of domestic resourcing to sustain or scale-up projects

24. 24 Training example of prioritization of adaptation options (a) Source: Mounira Boussetta. CLIFIT Training materials in Togo. PNUD-Maroc, manuel de formation en changement climatique, juillet 2014 Adaptation optionCostsIntensity of reduction in vulnerability Scope of reduction in vulnerability 'No regret' measures Control of the implementatio n of the option Total Adoption of water-efficient and drought/temperature- resistant crops 2452114 Adoption of more resilient livestock breeds 1352112 Adoption of no-till seeding2552115 Strengthening and protection of agricultural conveyance structures 2332212 Diversification of livelihoods2433112 Compensation and insurance system to minimize CC-related losses 1451213 New water impoundment structures (small and medium dams) 1552215 Maintenance of hydraulic structures 2452215

25. 25 Training example of prioritization of adaptation options (b) Source: Mounira Boussetta. CLIFIT Training materials in Togo. PNUD-Maroc, manuel de formation en changement climatique, juillet 2014 Adaptation options – Ranking 1  New water impoundment structures (small and medium dams)  Upkeep and maintenance of hydraulic structures  Irrigation water saving programs (localized irrigation). Transition to localized irrigation  Drinking water saving programs  Adoption of no-till seeding Adaptation options – Ranking 2  Action plan against flood damages  Adoption of water-efficient and drought/temperature-resistant crops  Treatment of brackish waters  Rainwater harvesting  Artificial groundwater recharge  Watershed treatment programs  Combatting agricultural pollution Adaptation options – Ranking 3  Compensation and insurance system to minimize CC-related losses  Recycling of waste water  Depollution at household and industrial level  Controlled garbage dumping  Supporting rural populations' access to drinking water (boreholes, wells...)  Supporting urban populations' access to RE-supplied air conditioning Adaptation options – Ranking 4  Adoption of resilient livestock breeds  Strengthening and protection of agricultural conveyance structures  Diversification of livelihoods (off-farm activities)  Networks for air quality monitoring and early warning

26. 26 Key questions What is the status of the overall status of project pipelines on climate change adaptation or mitigation in your country? What are processes of prioritising climate investments in your institution/country?

27. 27 List of references: Cities Development Initiative for Asia (CDIA) 2010: City Infrastructure Investment Programming & Prioritisation Toolkit. User Manual: From wish list to short list: prioritising urban infrastructure projects for local development GIZ/ODI 2013a: Understanding Climate Finance Readiness Needs in Tanzania GIZ/ODI 2013b: Understanding Climate Finance Readiness Needs in Zambia

28. 28 BACK UP

29. 29 What do we mean by paradigm shift or transformational change? Source:GCF Decision B.07/06. Annex XIV: Initial investment framework NAMA Facility (2014): Potential for Transformational Change, NAMA Facility factsheet Large international facilities, e.g. GCF or NAMA Facility, have transformation potential or “paradigm shift” as their funding criterion Green Climate Fund: degree to which the proposed activity can catalyze impact beyond a one-off project or programme investment NAMA Facility: projects are considered as conducive to transformational change if they  contribute to enabling either a significant evolution in terms of scope (e.g. scaling-up or replication), or enabling a faster and/or a significant shift from one state to another;  have a catalytic effect and include mechanisms to ensure the sustainability of the impacts, local ownership and political will, the involvement of the private sector and the use of innovative technologies and approaches, and;  allow for systematic learning processes.

30. 30 Example II: Climate Actions Prioritization (CLIMACT Prio) tool Approach: climate awareness, decision support and capacity building tool for the prioritization and assessment of climate mitigation and/or adaptation actions at a local level Excel tool available onlineonline Source: University of Rotterdam ; Institute for Urban Management http://www.ihs.nlhttp://www.ihs.nl http://toolbox.climate-protection.eu/search/?cmd=view&uid=e74e081d

31. 31 Example: Prioritisation of projects – NAPA approach Step 1. Four general criteria to select priority adaptation activities from a long list of potential activities: Level or degree of adverse effects of climate change; Poverty reduction to enhance adaptive capacity; Synergy with other multilateral environmental agreements; Cost-effectiveness Step 2. Criteria to prioritize and subsequently to rank the selected activities: Loss of life and livelihood; Human health; Food security and agriculture; Water availability, quality and accessibility; Essential infrastructure; Cultural heritage; Biological diversity; Land-use management and forestry; Other environmental amenities; Coastal zones, and associated loss of land.

32. 32 Example III: International Climate Initiative (ICI) General alignment with one/more of thematic priorities of the ICI Transformative impact, level of ambition, innovation potential (technological, economic, methodological, institutional) Sustainability of project outcomes and replicability of the concept and/or results Contribution to international climate cooperation (e.g. UNFCCC, Montreal Protocol, CBD) Contribution to the creation of enabling political conditions in the partner country Coherence with and integration into national and/or regional/transnational strategies, international cooperation and synergies with other projects and sectors Contribution to economic and social development in the partner country Contribution to bilateral cooperation on climate and environment Solidity of the concept, quality of presentation and of the anticipated project management and monitoring Amount of self-financing and third-party financing Suitability of project Source: ICI 2015; Information on support for projects under the International ClimateInformation on support for projects under the International Climate Initiative (update 2015)