Public international climate finance flows have steadily increased, especially since 2010, in particular for the agriculture and forestry subsectors. Finance of climate change adaptation exceeds mitigation. The priorities, engagement structure and project development process is described of the Green Climate Fund (GCF), as an example of a multilateral climate fund to support CSA. © FAO: http://www.fao.org

1. Financing Climate Smart Agriculture
Central Asia Climate Smart Agriculture Workshop
Bishkek, 12-14 July 2016
Astrid Agostini
Climate and Environment Division, FAO
1

2. Investment and finance in the agriculture sectors
Agricultural investment
• Private investment, in particular on farm
investment in agricultural capital, is the dominant
source of agricultural finance
• ODA is a fraction of public investment in
agriculture – domestic budgetary resources for
public investment are significant
Climate finance
• ODA for climate finance exceeds ODA for
agriculture sectors
• Domestic public finance for climate action is
significant/may exceed international finance
ODA
Domestic
public
investment
Private investment
Domestic finance is key
– use your own resources!

3. Public international climate finance flows
increasing… especially since 2010…
• USD 16 bn cumulative
2002-2015
• Major increase since
2010 – fast start
• Predominantly grants,
in particular bilateral
and dedicated
multilateral funds
Figure 3 Annual international climate tagged commitments over time by reporting source and donor type (2002-2014)
Source: OECD DAC (2015) Credit Reporting System (CRS)[1] and Climate Funds Update, 2015
[1] https://stats.oecd.org/Index.aspx?DataSetCode=CRS1
0
500
1000
1500
2000
2500
3000
3500
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
FinanceinmillionsofUS$
Bilateral CRS Multilateral CRS Multilateral CFU

4. Agriculture receives most finance overall, but
forestry receives the greatest share of dedicated
climate funds… fisheries marginal….
• Bilateral public finance is dominant
source for all three sub sectors
– Approx 25% tagged as “principally”
supporting CCAM outcomes
• Annual averages (bilateral):
– US$1.9 billion for agriculture,
– US$552.7 million for forest
conservation
– US$37.5 million for fisheries
• Five main donors: GER, EU, USA,
UK, JAP; for fisheries: Norway
International public climate finance commitments by funder, source and sector (2010-2014)
0
500
1000
1500
2000
2500
3000
Bilateral CRS Multilateral CRS Multilateral CFU
FinanceinmillionsofUS$
Agriculture Forests Fisheries
Source: OECD DAC (2015) Credit Reporting System (CRS)[1] and Climate Funds Update, 2015

5. Adaptation finance exceeds mitigation
finance, but in forestry mitigation dominates
How different donors and sources support climate mitigation and
adaptation outcomes in the sector (total finance in millions of US$
between 2010 and 2014)
Source: OECD DAC (2015) Credit Reporting System (CRS)[1] and Climate Funds Update, 2015
[1] https://stats.oecd.org/Index.aspx?DataSetCode=CRS1
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Agriculture Forestry Fishing Agriculture Forestry Fishing Agriculture Forestry Fishing
Bilateral CRS Multilateral CRS Multilateral CFU
FinanceinmillionsofUS$
Mitigation Adaptation Both

6. What is being financed
Limited availability of aggregate data/information. Some
indications:
• Capacity development, including policy and institutional
strengthening
– Particularly pronounced in forestry – dedicated climate funds
allocated approx. 75% of forest finance to REDD+ readiness
• Bilateral finance programmed to deliver multiple benefits
– biodiversity and gender commitments, especially in agricultural
and fisheries adaptation programmes

7. Prospects and pledges
• USD 100 billion in annual climate finance to developing
countries by 2020, more after 2025 – reiterated in Paris
• COP21 USD 5.6 billion pledged to new and existing initiatives –
unclear how much to ag sectors
• Renewed commitments to cross cutting forestry and ag sector
programmes, especially GEF (USD 3 billion climate finance across focal areas)
– at least US$300m dedicated to coastal and marine issues over the next four years.
– US$250 million to flow through the GEF’s SFM/REDD+ Incentive Mechanism, which will
mobilize US$750 million in grants from other focal areas to tackle the drivers of
deforestation and forest degradation, while supporting the role of forests in national and
local sustainable development plans
– USD 45 m –address key global drivers through sustainably managed commodity chains
– more than US$116 million - food security, resilience, carbon sequestration in SSA

8. Multilateral climate funds likely to support CSA
• Green Climate Fund (GCF)
• Global Environment Facility (GEF)
– Climate change focal area
– Land degradation focal area
• Least Developed Countries Fund (LDCF)
– Funding National Adapation Programmes for Action (NAPAs)
• Special Climate Change Fund (SCCF) (adaptation)
• Adaptation Fund (AF)
– Developing countries particularly vulnerable to climate change
– Funded by CDM; direct access for national entities

9. What is the GCF?
• Established in 2010 as a financing
instrument under the UNFCCC.
• important role expected in reaching the
USD 100 bn per year climate finance target.
• Secured USD10.3 billion in pledges.
• Aiming to allocate USD2.5 billion in 2016
• allocated USD 424 million to 16 projects
(USD 256 million to 8 projects in 2016).
• The GCF Secretariat submits decisions to a
24-member Board (split 50:50 between
developing and developed countries).
Mitigation
(50%)
Adaptation
(50%)

10. GCF priorities
• Programmes and projects are expected to contribute to one (or
more) of the following strategic impacts

11. GCF Engagement
Infrastructure
11

12. accredited entity can submit project
and programme proposals for funding
no-objection(s) from the NDA(s) or
focal point(s) for funding proposals
GCF Secretariat evaluates funding
proposals against its investment
criteria
quality proposals are submitted to the
Board for consideration/potential
approval
GCF project development
process

13. Identifying viable project ideas (1 of 2)
• Alignment with the GCF Results Management Framework
• Make a substantial contribution to low-emission and/or climate-
resilient development.
Mitigation Adaptation
Energy and power generation Vulnerable people and communities
Low-emission transport Health, well-being, food & water security
Buildings, cities, industries and appliances Infrastructure and built environment
Forestry and land use Ecosystems and ecosystem services

14. Identifying viable project ideas (2 of 2)
• Contribute to a paradigm shift in the response to climate change.
– Projects should be innovative, and have a catalytic impact.
• Focus first and foremost on climate change.
– Clear differentiation from other projects aimed at (e.g.) developing the agricultural
sectors, reducing poverty and food insecurity.
• Ensure alignment with national climate change policy priorities
– including INDCs, NAPs, etc.
• Country ownership and leadership are vital
– Close collaboration with National Designated Authorities (NDAs) from an early stage is
a pre-requisite to further work.
– Involvement of national stakeholders during project design is essential. Their
involvement in project implementation is desirable.
Co-financing!

15. Project Preparation Facility (PPF)
• Provides up to USD 1.5 million (or 10% of requested GCF funding)
to support project development.
• All accredited entities can submit requests for PPF resources.
– The Secretariat approves PPF requests, ensuring a fair geographic distribution
and balance between international and direct access entities.
• PPF request must be built on a well developed project idea (e.g.
concept note and PPF form).
• PPF to finance e.g. feasibility studies, E&S screenings, gender
studies and action plans, risk assessments and M&E framework

16. GCF Readiness Programme
• up to USD 1 million per year to capacitate local stakeholders and
support the development of a programme/project pipeline (maximum
USD 300,000 per readiness project).
• wide range of delivery partners can develop and implement readiness
initiatives, - with the explicit consent of (and in close coordination
with) the country’s National Designated Authority (NDA)
• four ‘activity areas’ for readiness support.
1. Capacitating the NDA
2. Building a country programme framework
3. Supporting accreditation of regional, national and sub-national entities
4. Building the project pipeline

17. GCF projects in agriculture - examples
• Scaling up the use of modernized climate information and
early warning systems in Malawi ($12.3 million).
– climate phenomena (flooding, droughts, storms) which have been worsening in recent
decades, while 85% of the population mainly rely on agriculture for a living in rural areas.
• Increasing the resilience of ecosystems and communities
through the restoration of the productive bases of salinized
lands in Senegal ($7.6 million).
– low rainfall levels are threatening groundnut production which is a crucial sector in the
country’s economy.
– GCF is funding the ecological monitoring centre (CSE), a State body whose mission will be
to “develop knowledge and the spread of suitable technologies” to farmers and to “reduce
the salinity” of arable land.

18. Making a little go a long way
….… invest climate finance strategically
• Enabling environment/public goods and services to underpin
climate-smart agricultural development
• Supporting climate mainstreaming into domestic investment
– Public expenditure reviews; Budgeting process; Project/investment appraisal
• Unlocking private capital for climate-smart agricultural investment
– Prove viability of CSA investments
– Funds with layered capital structures where public funds partially de-risks
private capital for innovative investments with public benefits
– Strengthen capacity of financial services providers to manage agricultural
risks and

19. Thank you