The large number of different climate funds and their different funding approaches and requirements make the climate financing landscape very confusing and seemingly inefficient. But this diversity also offers opportunities. Countries have skillfully combined funding flows from multiple sources for some time, and with significant success: climate projects in developing and emerging countries can have a greater impact, become more efficient or make their impact more sustainable if they can combine more and different types of funds synergistically in specific areas of climate action.
What does that mean exactly? How have countries proceeded to get the best out of several climate funds? Which factors promote (or hinder) possible synergies?
Arepo has addressed these questions in a study for the Green Climate Fund (GCF) and the Climate Investment Funds (CIF). For this purpose, Arepo examined synergies and interactions between projects of these two climate funding mechanisms, the Global Environment Facility (GEF) and the Adaptation Fund. In four case studies examples from Kazakhstan, Mongolia, Cambodia, Namibia, and Brazil were documented and analyzed. A synthesis report summarizes the results of the analysis on a meta-level.
The study shows that is it possible to combine funding from different climate funds in the energy efficiency, renewable energy and climate change adaptation fields such that pilot approaches can be more frequently replicated and / or upscaled and that greater continuity in action can lead to enhanced impact. Improved knowledge and capacity building leads to higher sustainability. The best results were observed when funded initiatives built on each other and complemented each other thematically or geographically. Important success factors were competent and committed local actors, but also deliberate knowledge sharing and the question of what kind of funding was available at what time were also very relevant.
The study is intended for all those who want to make more out of climate financing: Climate fund managers, governments interested to coordinate climate initiatives, but also project implementers will find many valuable tips on how to make the best use of different climate financing sources. The study is available for download.
Type and scope of services
First, a comprehensive project portfolio analysis of the considered four climate financing mechanisms gave insights into how often funding flows were possible converging.
For four clusters of projects in Kazakhstan, Cambodia, Namibia, and Mongolia, country studies identified potential and existing links between the projects. For this, synergies, their mechanisms, but also drivers and obstacles were examined and described in detail in country case studies. Interviews with country stakeholders (e.g. development banks, NGOs, competent authorities) and climate fund practitioners complemented the desk review.
Finally, the findings and recommendations from the study were summarized in a published synthesis report and presented to the GCF and CIF.