Catalyzing climate finance for the Southern African Development Community
Lead institution(s)
Summary
One of the biggest barriers to sustainable development in the Global South is access to finance to support the implementation of climate action.Read more
One of the biggest barriers to sustainable development in the Global South is access to finance to support the implementation of climate action. In southern Africa, countries are still struggling to draw together feasible and bankable projects that comprehensively address their Paris Agreement targets. Consequently, the Green Climate Fund — established within the UN’s Framework Convention on Climate Change to assist countries in the Global South to adapt to and mitigate the effects of climate change — remains constrained by a limited pipeline of effective country-owned project proposals, and it is falling short of its commitment to channel 50% of total funding through direct access in recipient countries. Relatively few efforts are directed towards overcoming the barriers facing climate finance practitioners in the Global South.
In response to this challenge, this project seeks to enhance access to international climate finance by Botswana, Lesotho, Namibia, South Africa, Zambia, and Zimbabwe. The project builds on the Southern Africa Climate Finance Partnership, which aims to support country-owned and managed climate finance portfolios that can be financed through the Green Climate Fund and other avenues, mobilizing private investment where appropriate. Among the activities supported by the project are knowledge generation and synthesis, targeted capacity building, and country programming support (including South-South bilateral exchanges). Support for gender-responsive climate finance will be a cross-cutting theme in all three activities.
Research outputs
Access full library of outputs Opens in new tab
In pursuing access to climate finance from the Green Climate Fund, entities seek to become accredited as Direct Access Entities (DAEs) to channel the flow of catalytic climate finance to begin addressing national climate change priorities. The GCF’s accreditation process for DAEs is based on the ‘fit for purpose’ approach. This approach promotes the identification and matching of appropriate entity capacity with the relevant GCF requirements at several categories of accreditation. Becoming accredited as a DAE is often seen as the only gateway to accessing the GCF, one that takes significant time and resources to pass through. Understanding and addressing the wide array of capacity constraints DAEs and nominated entities seeking accreditation are faced with is therefore a critical concern for the southern Africa region.
This report considers how National Development Bank of Botswana (“NDB”) can integrate climate finance into its organisational strategy and across all its systems. Climate change challenges can be addressed more effectively though improved access to climate finance that utilises the opportunities it presents for driving both business growth and impact in alignment with the country’s Nationally Determined Contribution (NDC) under the Paris Agreement to which Botswana is a party.
The focus on the Green Climate Fund (GCF), as one of the main operating entities of the financial mechanism of the Paris Agreement is increasingly necessary, as developing countries require financial support to implement their Nationally Determined Contributions (NDC), most of which are conditional on access to finance and means of implementation. Taking into consideration the multiple development challenges facing countries in the region, including unemployment, poverty, food security, all of which are exacerbated by climate change, and more recently the COVID-19 pandemic, access to catalytic multilateral finance like the GCF is of paramount importance. Africa’s special needs and circumstances means that not only is access to climate finance a necessity, equally important is the application and alignment of these funds with meeting these multiple challenges.
