The challenge: building readiness for climate finance

The global architecture of climate finance is fast evolving. The Green Climate Fund is taking shape and is likely to change the scale and delivery of climate finance. Other sources of private and public finance are also emerging.  As this landscape develops, a crucial question arises: To what extent are developing countries capable of tapping into and managing these financial flows?  Considering the range of capacities, which are mostly inadequate, and conditions prevailing across the developing world, enhancing the climate finance readiness of countries has become a challenging new task for planners and finance developers

Assessing climate finance readiness

Against this backdrop, CDKN and GIZ have collaborated to identify opportunities for supporting the governments of Indonesia and Vietnam in climate finance management.  At the behest of policy partners, rapid scoping studies were conducted to map relevant climate finance architecture and performance in both countries and on the basis identify next steps in readiness building. The country assessment reports for Indonesia and Vietnam, completed in 2013, give an overview of existing climate finance systems and conditions in Indonesia and Vietnam and address a broad set of questions based on current concepts of readiness, such as: What are relevant policy strategies and laws? Which institutions are responsible for what? What is the level of private sector engagement? What are the key challenges in monitoring and tracking climate finance?

Based on this rapid stock take, GIZ (supported by adelphi) engaged in dialogue with key climate institutions in both countries. Relevant climate finance measures already being carried out were mapped and possible activities to complement these initiatives were elaborated. Instead of coming out with new initiatives and strategies, the focus of these conversations was on utilizing existing programmes and institutions for more efficient use of resources. A set of readiness building activities was jointly identified with stakeholders in both countries through the consultative process, guided by the issues highlighted in the country assessment studies.  Further development and ultimate uptake of these proposals is under consideration with country partners.