A Namibian research organization was granted five million dollars last month to provide clean water to villages in need, using power from the sun and wind. A Senegalese organization received $1.35 million earlier in the year to help coastal communities prepare for the impacts of rising sea levels. And a Mongolian bank was granted an $8.7 million loan for the construction of a large-scale solar plant.
These financing recipients were all so-called "direct access" entities. The funding they received came from the Green Climate Fund and Adaptation Fund, two funds that channel finance to help countries shift their economies and societies toward greater climate compatibility. These funds play a central role in ensuring that developing countries have access to necessary funds to implement their climate goals, including the commitments they made under the Paris Agreement.
The Green Climate Fund, in particular, has several billion dollars of resources to distribute over the next few years. It is looking for strong funding proposals for innovative climate mitigation or adaptation projects.
The Role of Direct Access
That's where "direct access" comes in. Direct access is a way for developing country actors to receive money from these global funds without having to go through an international financial intermediary (like the World Bank or UN Development Programme).
Before being granted direct access, entities must undergo an accreditation process to make sure they are able to properly handle the funds. Right now, 26 direct access institutions are accredited to the Adaptation Fund and 35 to the Green Climate Fund. This includes all types of institutions, from environment agencies and non-profit organizations, to private companies and national development banks.
Receiving direct access to the climate funds has brought several benefits to these organizations. In addition to providing a new source of potential funding, the accreditation process itself has often helped strengthen the quality of the entities' management systems.
That said, receiving finance through direct access is not without real challenges. Even after receiving accreditation, the entities have to submit project proposals that can pass the funds' quality controls. Drafting successful proposals is a challenging process for many institutions. L ess than half of the funding proposals approved by climate funds have come from national and regional direct access entities—the rest come from international organizations.
Direct Access Community of Practice
On Sunday, on the sidelines of the UN climate negotiations in Bonn, Germany, WRI helped convene a group of direct access entities and their partners to share experiences and discuss future collaboration. Under the umbrella of the Direct Access Community of Practice, the meeting marked an opportunity for entities accredited to the GCF and Adaptation Fund to share their recent successes and challenges.
Peer exchange between entities seeking access to funding from the climate funds is of vital importance because the process of constructing innovative climate initiatives is not easy. This challenge made worse by the fact that these funds are still so new and not well understood. While the Adaptation Fund celebrates its 10th anniversary this year, it did not approve its first projects until 2010. The GCF approved its first proposals at the end of 2015. As a result, there are relatively few people around the world who thoroughly understand the process involved in accessing these funds. Those that do often work within the organizations that have already received funding. These people are thus a valuable source of expertise for their peers. This is particularly true for direct access entities, who often face slightly different challenges from those of international organizations.
Sunday's meeting marked the launch of an online platform for the Direct Access Community of Practice to support continued knowledge exchange and cooperation between direct access entities. The platform will provide news updates and information on accessing the climate funds, as well as chat rooms and other tools for virtual interaction between direct access entities, their peers, partners and the fund secretariats themselves. At the meeting, community members also discussed the creation of training materials and programs to ensure a more systematic capturing and sharing of lessons learned to date.
There's money out there to finance climate-compatible development. This Community of Practice can help get it into the hands of the organizations who need it most.