EXISTING FINANCE ARCHITECTURE AND CLIMATE FUNDS ALEX HEIKENS, UNDP

Managing climate finance: It’s a plumbing job - Get money flowing to those who need it

Translate climate policies into costed investments Prioritise climate investments through national planning and budgeting processes Implement climate investments whilst strengthening country capacities Account for climate related impacts to national and international stakeholders

Existing finance architecture Domestic and international, Private and public, National and local government Public funds flow through budget Private funds flow through banks Household funds flow as social protection

Advantages of climate finance through national budget Budget is existing process which engages all of government led by Ministry of Finance Much climate expenditure already flows through national budget Budget can disperse large volumes of finance Allows funds to “top-up” sector spending to support “mainstreaming” of climate

Proportion of 'climate relevant' expenditure Financed by domestic revenues Financed by external grants or loans Bangladesh77%23% Cambodia13%87% Nepal44%56% Samoa41%59%

When is separate climate fund useful? Allow funds to be “rolled over” each year Blending of different financing Reach out to marginalized groups Clear monitoring and reporting Fiduciary concerns Political commitment

Conclusions Use existing systems and institutions when possible to access and deliver climate finance When establishing a new fund, assure it has real added value