Regional: Enhancing Knowledge on Climate Technology and Financing Mechanisms

Sovereign Project | 45113-001

Summary

The TA will support the convening of 2 to 3 workshops to facilitate dialogue among stakeholders in Asian and Pacific countries regarding design of the Green Climate Fund (GCF) and other climate change financing issues. Topics to be discussed in these workshops will include governance systems for climate finance, the efficiency and effectiveness of climate finance, public and private financing, access and "country ownership", balancing adaptation and mitigation financing, and financing modalities/instruments. The gatherings may also be used to share experience on best practices in the region for utilizing climate mitigation and adaptation technologies to facilitate understanding on the feasibility of and financing needed to achieve low-carbon and climate-resilient societies.

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Project Name Enhancing Knowledge on Climate Technology and Financing Mechanisms
Project Number 45113-001
Country Regional
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7842-REG: Enhancing Knowledge on Climate Technology and Financing Mechanisms
Clean Energy Facility - Asian Clean Energy Fund US$ 1.50 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector Energy - Energy efficiency and conservation - Energy sector development and institutional reform
Industry and trade - Industry and trade sector development
Water and other urban infrastructure and services - Urban solid waste management - Urban water supply
Gender Equity and Mainstreaming No gender elements
Description

The TA will support the convening of 2 to 3 workshops to facilitate dialogue among stakeholders in Asian and Pacific countries regarding design of the Green Climate Fund (GCF) and other climate change financing issues. Topics to be discussed in these workshops will include governance systems for climate finance, the efficiency and effectiveness of climate finance, public and private financing, access and "country ownership", balancing adaptation and mitigation financing, and financing modalities/instruments. The gatherings may also be used to share experience on best practices in the region for utilizing climate mitigation and adaptation technologies to facilitate understanding on the feasibility of and financing needed to achieve low-carbon and climate-resilient societies.

ADB will co-facilitate the seminars with other resource organizations and partners. The first workshop will be organized at the latter part of 2011 to allow for consultations among interested stakeholders on climate change financing in general and Green Climate Fund in particular as input to the GCF design process and COP-17 in Durban in December 2011. The second workshop can be convened in early 2012 to share the outcomes of the Durban conference to a wider group and get feedback and inputs for the next steps towards operationalizing the GCF. The third meeting may be convened around the end of 2012 as a final TA activity.

The TA will support development of knowledge products related to the financial and technology mechanisms of the UNFCCC and their linkages - both as inputs to the regional workshops and for wider application. To prepare these knowledge products, a review of existing research, analytical work, and studies on the economics of climate change, clean energy, climate financing, and other related topics will be undertaken by ADB and others, with results incorporated into the analysis. Some of the anticipated knowledge products include:

(i) Background on Climate Financing. A general review of climate change financing mechanisms that have been applied by developing countries both within the region and worldwide. This would include but not be limited to the Clean Development Mechanism, Global Environment Facility, Climate Investment Funds, etc. This will also include review of factors or barriers for why certain countries/regions are behind others in benefiting from these sources of financing and quick assessment of the situation in all ADB's regions will be carried out. Similarly, a review of how the private sector can participate and the barriers if any will also be undertaken. Several other short papers will be prepared covering governance systems for climate finance, financing modalities, access and country ownership issues, etc. These knowledge products will provide direct inputs to the workshops.

(ii) Access to Finance for Climate Technologies. This study will undertake an assessment of current access to financing in Asia for climate technologies as well as climate financing needs of developing countries in the region, taking into account currently available technologies. This will also analyze the barriers faced by companies to access financing within and outside the country. A few selected countries will be examined more thoroughly regarding their access to finance, demand and ways to mobilize innovative financing for climate technologies. This may include public and private project finance, private capital, pension funds, etc. within the country/region as well as global climate funds. The study will also propose adjustments to current financing instruments, such as the use of partial credit guarantees, that may help to more effectively deploy climate technologies.

(iii) Climate Technologies Information and Market Analysis. The report will provide a synopsis of the state of various technologies for climate change mitigation (on the supply as well as demand sides) and adaptation, including technological developments, experiences, costs, and greenhouse gas (GHG) emissions reduction potential in participating DMCs. An understanding of markets for climate technologies, especially where there is no expressed consumer demand, will be crucial in designing new interventions to support climate technologies deployment.

(iv) Policies to Promote the Spread of Climate Technologies. Given the vital role that governments play in promoting the use of climate-friendly technologies, another paper will look at current policy frameworks across the region, government plans and commitments for promoting climate-friendly technologies in their development context as well as standards and regulations for the transfer and deployment of new climate technologies. The paper will also look at institutional capacity among DMCs in promoting the use of climate friendly technologies and potential cooperation among these countries in promoting climate friendly technologies that will facilitate technology roadmap at regional level, and identify policy-related barriers in doing so. The report will also propose appropriate policy and regulatory frameworks necessary to promote the use of climate-friendly technologies, using selected country examples. Successful models can be shared with other countries.

(v) Right Climate Technologies and the Poor. This study will assess growing energy demand among the poor of rural and urban areas in Asia and the Pacific and look at energy supply options that are both cost-effective and low-carbon. The paper will also assess the factors that limit the capacity to access and ability to adopt climate technologies among the poor in addition to assessing their energy demand. The study will also look at the financial and economic returns of these technologies. The main output of this study will be an energy curve to help national/local authorities choose the optimal sequencing of energy supply options for the poor in given circumstances and to determine climate financing needs.

Project Rationale and Linkage to Country/Regional Strategy

Issues of technology were a major part of the COP-16 agreements, with another key outcome being decision to establish a Technology Mechanism. This is meant to facilitate the implementation of actions to enhance technology development and transfer, while respecting nationally determined technology needs and based on national circumstances and priorities. The components of the Technology Mechanism are a (i) Technology Executive Committee, that will provide leadership and, among other functions, decide the priority areas for the mechanism to focus on; and (ii) Climate Technology Centre and Network (CTCN), that shall facilitate a network of national, regional, sectoral and international technology networks to aid developing countries with the identification of technology options and their implementation.

ADB's support for climate change in the Asia Pacific region has focused on innovative finance and technologies, and it has stressed enhanced cooperation through regional and sub-regional bodies such as the Association of Southeast Asian Nations (ASEAN) as well as North-South and South-South cooperation to address this challenge that stretches beyond any single nation's borders. ADB with UNEP is also establishing a pilot center to facilitate investments to deploy climate mitigation and adaptation technologies in Asia and Pacific with support from GEF and others. While this TA is directly relevant to the global dialogue on climate change finance, it is meant to complement, not duplicate, related national and regional efforts. The proposed TA will also complement other ADB initiatives that address climate technology needs. This includes facilitating technology and climate change financing cluster TA being processed, as well as other initiatives such as the Asia Climate Change and Clean Energy Venture Capital Initiative, etc. ADB's Regional Departments are working with DMCs and partners to develop the architecture for their constituent countries and regions to access local, regional, and global climate change financing needs and sources. The workings of the GCF and other similar efforts will benefit Asian and Pacific developing countries more if the region can build a common voice for interactions at the international level through discussion and the sharing of knowledge on financing and the use of technology.

Impact Enhanced capacity of DMCs in addressing climate change.
Project Outcome
Description of Outcome Higher awareness and better participation of regional stakeholders in global discussions on climate financing, including the development of the Green Climate Fund and the operations of the Technology Mechanism.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Organization of a series of workshops that will facilitate knowledge sharing among national climate change institutions in ADB's DMCs.

Development of knowledge products on the issues of climate change financing and best practices of climate-friendly technology in Asia and the Pacific

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services Total of 78 person-months of consulting services will be required: 60 person-months of international consulting services and 18 person months of national consulting services.
Responsible ADB Officer Xuedu Lu
Responsible ADB Department SDCC
Responsible ADB Division SDCD
Executing Agencies
Asian Development Bank6 ADB Avenue, Mandaluyong
Metro Manila, Philippines
P.O. Box 789, 1099 Manila,
Philippines
Timetable
Concept Clearance 15 Jul 2011
Fact Finding -
MRM -
Approval 01 Aug 2011
Last Review Mission -
Last PDS Update 14 Jul 2011

TA 7842-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
01 Aug 2011 - 01 Aug 2011 30 Jun 2013 30 Jun 2015 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 1,500,000.00 0.00 0.00 0.00 0.00 1,500,000.00 01 Aug 2011 1,488,761.65

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