1. Exercise: Pros and Cons of National Climate Funds

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

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4. 4 What you can expect to learn from this exercise  Get an understanding of :  Which criteria should be considered when deciding on establishing national climate fund(s)  Gain an awareness of:  The pros and cons of national climate fund(s)

5. 5  Overview of the assessment criteria for establishing national climate fund(s)  Group discussions  Presentation of results  Reflections Agenda

6. 6 Making a decision on establishing national climate fund(s) Source:UNDP 2011 UNDP Asia Pacific Regional Center 2012 There are different modalities for channelling climate finance… Through direct budget support:  A share of climate finance is already flowing through the formal budget system in a number of countries, e.g. Lesotho, Mauritius, the Seychelles, Solomon Islands, Bangladesh, Nepal, Thailand, etc. Using existing funds or public institutions  Creating a special funding window / program for climate change activities within an existing public fund or bank, e.g. Mexico green mortgage program for energy-efficient housing Project finance  Cash transfers are made directly into the bank accounts of the implementing organisations. Many NGOs receive funding in this way and multi- and bilateral partners provide support to government agencies through similar stand-alone projects Setting up national climate fund(s)  Establishing a new institution, specialised in climate change only, e.g. Bangladesh, Rwanda, Cambodia, etc. A combination of several modalities is possible and often necessary!

7. 7 Establishing national climate fund(s)? Source:UNDP 2011 UNDP Asia Pacific Regional Center 2012 A careful assessment is needed before making a decision on establishing national climate fund(s) Strategic role Political feasibility Institutional and human capacity Timing Financial sustainability

8. 8 Your task  Break up into groups of 4 people  Follow the instructions of the step-by-step guide which you will find in the hand- out Step 1: Carefully read the information provided in the hand-out Step 2: Select the arguments (pros / cons ) and structure them according to the assessment criteria presented Step 3: Think of additional factors based on your experience in your country Step 4: Prepare and share a short presentation that summarises your discussion Now it is your turn to do the exercise!

9. 9 What did you learn from this exercise? What aspects or arguments did you find useful for the context of your country? What aspects would present the biggest challenge? How do you assess the need of establishing a climate fund in your country? Reflections

10. 10 Checklist to get CLIF Ready According to what you learned from this exercise you could … Check what modalities for channelling climate finance are feasible in your country Check whether a national climate fund would be a competitive option in the policy and institutional context of your country Next Steps