As the fund thrashes out niggling issues in Barbados this week, African countries must show they can use climate cash
By Sophie Yeo in Marrakech
African negotiators have said that if rich countries do not pledge at least US$ 7 billion in climate cash by December, there will be no deal in Paris.
The Green Climate Fund is the UN-backed bank that will channel this money, which is eventually supposed to amount to hundreds of billions. Many poor countries have pinned their hopes on it as the only way to avoid monumental human suffering in coming decades.
These countries are extremely vulnerable to climate impacts, but have limited capacity to deal with the problem.
They are unable to afford the clean energy and adaptation measures that will wean them off cheap coal and enable them to deal with changing weather.
Africa is particularly vulnerable, with almost 50% of sub-saharan Africans living on less than $1.25 a day, according to World Bank figures.
Yet the continent has struggled to attract climate finance, with only 2.8% of UN-backed clean development projects (CDM) being financed in Africa.
According to the International Energy Agency, sub-Saharan Africa needs US$3 trillion in energy investment by 2040, an annual average of $110 billion a year, double what it has seen since 2000.
This is due in part to governments’ lack of capacity to deal with the complex regulations and difficulties in identifying projects.
And while the Green Climate Fund aims to help developing countries adapt to climate change and reduce their emissions, in many ways it is a bank like any other: if countries are to benefit from its (anticipated) bounty, they must prove able to handle these large sums of money.
Is Africa ready?
The board of the Green Climate Fund meets in Barbados this week, aiming to resolve its issues so that money could potentially start to flow into projects during 2015.
The 36-item agenda includes which entities will receive funding and how projects will be monitored.
Countries have agreed to make an initial round of pledges to the GCF in November. These issues need to be resolved now if they are going to have the confidence to put their money in.
It is mainly African countries’ responsibility to live up to the demands of the fund. Not everyone thinks they are ready to do so.
“I don’t think they even know what it means to be ready for the Green Climate Fund [in sub-saharan Africa],” says Yogesh Vyas, a climate change consultant for the African Development Bank.
He said many government officials lack the technical expertise required to deal with UN and multilateral agencies, meaning those countries are unlikely to be “at the front of the queue” when it comes to collecting funds.
The problem is not so much a lack of projects, but the bureaucratic loopholes through which hard-pressed governments must jump.
There are three aspects to GCF readiness, says Belynda Petrie, CEO of OneWorld Sustainable Investments. These are the ability to ground the project in stable policy frameworks, to access the money through project proposals, and then to deliver it effectively and transparently.
“There are projects, there’s no doubt about that, but getting them into a state of usefulness does often require some work,” she said. “I think they’re getting readier but not ready.”
She cited Kenya, Rwanda and Ethiopia as countries that had made good progress, but added that Lesotho had “hardly started”.
When it comes to new projects, these could be recycled from the CDM, suggested Tosi Mpanu Mpanu, a Congolese climate negotiator and a board member for the GCF.
“These projects are good projects. Maybe countries should try to see what projects they have in the pipelines and, once they become operational, run to the GCF: ‘We have these projects, show us the money.’”
There is a risk that the countries which are most in need will be left out precisely because they have the least capacity to prepare for the fund.
This runs contrary to the aims of the GCF, which was established explicitly to help countries in Africa and beyond through providing “simplified and improved access to funding…basing its activities on a country-driven approach”, according to its founding text.
“Those countries that aren’t proactive may lose out, but at the same time, there’s some safeguards in terms of making sure there is money available for the least developed countries to meet their adaptation needs,” said Annaka Peterson Carvalho, who leads Oxfam America’s climate finance advocacy.
Countries could request small grants to help them set up projects and programmes, in advance of full roll-out, she said.
Many smaller African states are already working with the GCF and other development banks to build this capacity ahead of what could be a bitter bidding process in early 2015.
But there is one way in which Africa is ideally placed to receive the GCF’s funds, says Abdalla Hamdok, deputy head of the UN Economic Commission for Africa.
As a latecomer to economic development, it is not so locked into fossil fuels as its neighbouring continents. It can pioneer clean alternatives, with GCF backing.
Hamdok says: “We need not follow the old paths that destroyed the environment. In that sense we will be quite ready to chart a path that is embracing green technology, green development.”