African nations miss out on climate funding

Rich nations pledged more than a decade ago to pay $100 billion a year by 2020 to help developing countries cut their own emissions and reduce the already-felt impacts of climate change.

At the COP26 climate summit taking place in Glasgow, African negotiators want this financing for climate mitigation and adaption to be scaled up to $1.3 trillion per year by 2030.

But even if the financing is upped, African nations may not stand to benefit much more than they are already. That’s because they face huge hurdles accessing funds available through the Green Climate Fund (GCF).

“Many, many African countries are lamenting that they are not able to jump through the hoops [to access climate finance] because of the complexity and the technicality,” Chukwumerije Okereke, an economist at Alex-Ekwueme Federal University Ndufu-Alike in Nigeria told Nature magazine in an October 2021 article.

Because of this, the bulk of climate finance to date has gone to middle-income countries.

Just 18% of GCF financing went to projects in the world’s poorest countries, researchers from Scotland’s Glasgow Caledonian University found in 2019, while 65% went to projects in middle-income countries like Mexico or India.

Yet Africa often bear the brunt of climate events despite producing less less than 4% of the emissions responsible for climate change.

How can countries access the Green Climate Fund?

The Green Climate Fund is the single largest source of global climate finance today.

To directly access GCF financing, a country has to first nominate a so-called “national designated authority”. This is often an existing government department such as the treasury, which is the set up in Kenya, or the environment ministry, such as in Nigeria.

The national designated authority acts as the interface between governments and the GCF and it’s also the first point of contact in the country for any inquiries about the GCF.

This step isn’t too arduous, and 51 out of 55 African nations have designated a national authority since the GCF was established in 2015.

Where’s the problem then?

It’s the next step involving getting institutions accredited with the GCF that’s proving a major stumbling block.

These so-called “accredited entities” can include many different stakeholders, from public institutions to private companies and civil-society organizations. South Africa, for example, has two accredited entities, the Development Bank of South Africa and the South African National Biodiversity Institute.

The idea is that once accredited, these entities can directly apply to the GCF for climate financing.

Having a wide variety of local stakeholders with direct access to the GCF is supposed to ensure that projects match local needs and also help GCF-funded projects fit in with a country’s own national climate plans.

“This approach has opened the door to potentially a more equitable, efficient, and transformative use of climate funds,” finds a March 2021 working paper by the World Resources Institute (WRI).

But, the WRI paper criticizes, “the high level of interest in the fund, combined with the GCF’s current approach to facilitating access to funding, has led to bottlenecks and frustration for countries trying to access funding.”

And it’s mainly African nations are missing out. Only 13 African countries have accredited entities, including Kenya, Namibia, Ghana, the Ivory Coast and Senegal.

Yet seven of the 10 countries most vulnerable to climate change are located in Africa, according to the African Development Bank.

With limited expertise, less developed African nations struggle with the 67-page accreditation form, which requires a wide range of standards, including fiduciary compliance and anti-money laundering structures to environmental, social and gender policies and complaint mechanisms.

Lack of direct control

A further 25 African nations receive GCF funding for climate projects by using big intermediaries, such as regional development banks, the World Bank or UN agencies like UNDP.

This lack of “direct access” to financing by African countries goes against a central premise of the GCF’s formation.

For climate adaptation expert Emmanuel Seck, the Program Director at Enda Energy in Senegal, it is also a wasted opportunity.

“We expect the Green Climate Fund to help us to build our institutions, to strengthen the governance of climate finance in our countries by enhancing the institutions,” he said in a phone interview from Glasgow where he is attending the COP26 summit.

“So there is a lot to do in terms of building capacity for ourselves to gather the fund directly and not pass through an international organization.”

Running out of time

Africa still fails to attract much GCF funding, Seck points out, even when going through international bodies.

“The level [of financing] is very low if you look at the needs of [African] countries in terms of adaptation and in terms of mitigation,” he said.

Some African countries stand out, Seck said, such as Morocco which has received funding for 9 projects and Senegal, with 11 GCF projects.

“But if you look at other countries, we are not really well-prepared to access the climate fund,” he said.

Again, this comes often comes down to the lack of experience managing large-scale projects.

“We get access to micro-projects of between $10 to $50 million,” Seck said. “More than 60 million is a problem for our institutions.”

The Green Climate Fund offers financing through a so-called “readiness program” to help institutions prepare themselves for accreditation and writing funding proposals.

“The responsibility for African countries is is to use the readiness program to develop the capacity for our countries,” Seck said, warning though that this “may take time.”

With Africa experiencing a growing climate emergency with rising temperatures, droughts and destructive floods, many say time is running out.