Maldives makes progress in securing direct access funds from the Adaptation Fund
Since the 2007 Bali Action Plan began to lay the foundations for international climate adaptation finance, finding effective mechanisms to channel funding to adaptation programmes in developing countries has emerged as a significant global challenge. Since 2009 the Adaptation Fund, one of such mechanisms, has provided direct access adaptation finance for developing countries that are signatories to the Kyoto Protocol. Direct access however remains a major challenge especially in the Asia-Pacific region as many countries lack the requisite institutional and financial management capacity to access finance.
Direct access allows countries to access climate finance directly from the Adaptation Fund – rather than applying through intermediary, regional institutions – when their national institutions, known as National Implementing Entities (NIEs), have met the high accreditation standards required to handle the funds.
The requirements or fiduciary standards include i) financial management and integrity, ii) institutional capacity; and iii) transparency and anti-corruption measures. Many developing countries in the region lack the capacity to meet one or more of these standards as they have been traditionally reliant on an intermediary to implement projects on the ground.
Maldives, whose economy is heavily reliant on tourism, the impending impact of climate change demands that the country adapt rapidly. Direct access to adaptation finance is one way of delivering adaptation actions immediately.
With financial support from the Ministry of the Environment of Japan, UNEP was able to provide support to 7 countries in Asia and the Pacific in developing the requisite capacity to access finance directly from the Adaptation Fund and other international funds.
UNEP has been supporting the Ministry of Environment and Energy, in consultation with the Designated Authority of the Adaptation Fund in Maldives and different stakeholders, to assess the capacity of potential NIEs. UNEP assessed the strengths and weaknesses of each potential NIE for Maldives and provided the findings to the Ministry of Environment and Energy, which is the Designated Authority for Maldives. Following this exercise, the Government of Maldives selected the Maldives Green Fund as NIE. The current agreement between UNEP and the Ministry of Environment and Energy, supports the Government of Maldives to develop capacity towards accreditation to the Adaptation Fund. The Maldives Green Fund, through technical assistance of UNEP is currently gearing for application for accreditation to the Adaptation Fund.
The effort situates Maldives ahead of other developing countries and provides valuable knowledge and experience for other countries seeking accreditation.
With the support of UNEP, the Government of Maldives is developing capacity of the Maldives Green Fund towards accreditation to the Adaptation Fund, which coupled with effective adaptation options will ensure Maldives’ resilience to climate change. The Maldives Green Fund expects to submit its application in 2015.
Similar initiatives are underway in 6 other countries in the region.