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Consolidated Country and Entity Work Programmes – Addendum I: Compilation of Country Programmes completed by countries

Meeting of the Board 1 – 4 July 2018 Songdo, Incheon, Republic of Korea Provisional agenda item 18(a)

GCF/B.20/11/Add.01

2 June 2018

Summary

This addendum provides a compilation of the 5 Country Programmes completed and vetted by Antigua and Barbuda, Federated States of Micronesia, Rwanda, Togo and Zambia, as of 31 May 2018.

Antigua and Barbuda Country Programme Date: 07.06.2017

Antigua and Barbuda

GOVERNMENT OF ANTIGUA AND BARBUDA

Department of Environment 13 June 2017Ministry of Health and the Environment#1 Victoria Park, Botanical Garden P.O, Box W693St. John’s Antigua, W.I.Tel: (268) 462-6265Fax: (268) 462-4625Email: [email protected]

Mr. Howard Bamsey Executive DirectorGreen Climate Fund (GCF) Songdo, IncheonSouth Korea

Re: Submission of Antigua and Barbuda’s Country Programme to the Green Climate Fund

Dear Mr. Bamsey,

On behalf of the Government of Antigua and Barbuda, I am pleased to hereby transmit the Country Programme presenting national priorities and plans for GCF engagement.

The Country Programme is a living document that will be revised on an ongoing basis, including through the GCF portfolio reviews that will be facilitated by the National Designated Authority (NDA) in Antigua and Barbuda on an annual basis. The Country Programme is a public document that can be shared and used to showcase Antigua and Barbuda as an example for other countries and stakeholders.

We hope that it will be a useful tool for communicating national priorities and that it will facilitate access to climate financing to meet our Nationally Determined Contribution (NDC) goals under the UN Framework Convention on Climate Change.

Sincerely,

Ambassador Diann Black-Layne DirectorDepartment of Environment


Antigua and Barbuda

Antigua and Barbuda is a small island state in the Eastern Caribbean whose economy is heavily dependent on natural resources for economic activities. While historically an agricultural island under colonial rule from 1632 to 1981, Antigua and Barbuda’s current economy is based on services, with tourism contributing approximately 70% of GDP. The twin island state is highly vulnerable to climate impacts, in particular coastal inundation, droughts, hurricanes, and increasing temperature. To respond to these challenges, the country has conducted vulnerability assessments and led goal-setting consultations, culminating in ambitious climate targets as well as innovative financing mechanisms for implementation. The national focal point for climate change, the Department of Environment (DOE) within the Ministry of Health and Environment, has coordinated these initiatives. The country’s policies and institutional capacity building efforts are exemplified by the development of three National Communications on climate change, five years of consultations culminating with the passage of the Environmental Protection and Management Act of 2015, and the enactment of a National Energy Policy by the Ministry of Energy. These efforts have culminated in ambitious mitigation and adaptation targets in Antigua and Barbuda’s Nationally Determined Contribution (NDC) to the United Nations Framework Convention on Climate Change (UNFCCC).

Figure 1. Geographical location of Antigua and Barbuda in the Eastern Caribbean

1. Country Profile

Geographical location Eastern Caribbean Land area 108 Sq Miles Population 92,738 Types of climate A moderately arid tropical climate with fairly constant

northeast trade winds. The island has low precipitation levels due to its low topography, receiving on average


990 mm per year of rainfall, with seasonal and annual variation

GHG emissions profile Inventory year 2006: 1917.07 Gg of CO2 equivalent. 92% of carbon emissions was from Fuel Combustion in the Energy Sector and 7% from Land Use Change and Forestry. Other emissions inventory data has been compiled for CH4, N2O, NMVOC and HFCs.

Key emitter sectors Electricity generation; Transportation; Deforestation Key climate risks Seal level rise; Extreme rainfall; Drought; Hurricanes;

Increasing temperatures Vulnerable sectors Water; Health (heat and vector-borne stressors);

Energy resilience; Coastal protection; Built environment (buildings and infrastructure); Financial services (insurance)

NDA/FP Department of the Environment, with responsibilities jointly administered with the Ministry of Finance

National/Regional AEs Caribbean Development Bank (CDB); CARICOM Climate Change Center

International AEs UN Environment; European Investment Bank (EIB); KfW

Potential AEs nominated Department of the Environment in Antigua and Barbuda; the Organization of the Eastern Caribbean States (OECS) Commission; and one Private Sector Entity in the OECS region

1.1 Climate change profile

Antigua and Barbuda is characterized by vulnerability to climate variability. Climate trends for which data is available and analyzed include temperature, rainfall, sea level rise and hurricanes. Results from the Hadley Centre PRECIS (Providing Regional Climates for Impact Studies) regional model have improved the availability of downscaled climate projections on a 25-km resolution for the Caribbean region. PRECIS model results for the Caribbean region project the following trends using SRES A2 (higher emissions) and B2 (lower emissions) scenarios:

- Increase in average surface temperature between 2.8 and 4.5°C by the end of the century - Average annual rainfall is projected to decrease - Rainfall variability is projected to increase, with more intense downpours as well as more extreme drought - Coastal erosion due to storm surge and sea level rise - Hurricane intensity is likely to increase; increases in hurricane frequency are uncertain

Higher Temperatures: Risks and Impacts on Public Health

Maximum and minimum temperatures have increased over the past 30 years in Antigua and Barbuda; trend analysis of average temperatures (1981 – 2013) by the Department of Meteorological Services indicates an increase of +0.6oC over the time period. Epidemiological research has linked dengue fever transmission to

Antigua and Barbuda Country ProgrammeDate: 07.06.2017

temperature, where warmer temperatures can shorten incubation periods in mosquitos from 12 days at 30°C to only 7 days at 32 – 35°C. Decreasing mosquito incubation periods by 5 days can lead to a threefold higher transmission rate of dengue and other vector-borne illnesses. Recent epidemics of Chikungunya and the Zika virus in Latin America and the Caribbean underscore the risks of vector-borne illnesses.

In addition to increased risks of vector-borne epidemics, increases in minimum and maximum temperatures contribute to physical discomfort, mental and emotional stress, and are likely correlated with increases heat- and respiratory-related illnesses. Increases in temperature may result in heat stress-related deaths among vulnerable groups such as the elderly and children. In Antigua and Barbuda, only ten percent of homes have cooling through air conditioning. In consultations with communities, many schools and homes need air conditioning to cope with more extreme heat.

Rainfall Variability: Droughts and Floods

The major freshwater sources in Antigua and Barbuda are: i) surface water; ii) groundwater, and iii) desalinated seawater. During wet years, approximately 60-70% of Antigua’s daily water supply is obtained through seawater desalination, and dependency on desalination can increase to 100% during drought periods. Desalination is energy intensive and costly; the extended 2016 drought is estimated to have cost the Government millions of dollars.

Drought impacts sanitation practices and recent changes in the epidemiology of leptospirosis – a potentially fatal bacterial disease that affects humans and animals – have been detected. According to the IPCC, leptospirosis is linked to factors in ambient temperature, changes in precipitation, and water availability.

Projections using the PRECIS regional climate model indicate that along with the risk of drying, there is an increase in the intensity of precipitation events over the Eastern Caribbean – including extreme rainfall separate from hurricanes and tropical storms. The impact of floods is already becoming a critical concern for Antigua and Barbuda.

Storm Surge, Sea Level Rise and the Coastal Tourism Economy

As a coastal economy, one-meter sea level rise (SLR) would impact 10% of major tourism resorts, all seaports, and 2% of major road networks in Antigua and Barbuda. The fisheries sector sustains significant losses during hurricanes, and will be negatively impacted by ocean acidification, SLR, and increasing sea surface temperatures. The recent annual influx of Sargassum seaweed to Antigua and Barbuda’s windward shores, which may be a result of climatic factors, has caused economic loses in the tourism and fisheries sectors.

Figure 2. Antigua and Barbuda’s largest reservoir, Potworks Dam, in 2013 (above) and after two years of drought in 2016 (below). A community documentary on the impacts of drought is available here: http://bit.ly/1YfVZ6F


Costly Impacts of Hurricanes

Hydro-meteorological hazards pose a great risk to Antigua and Barbuda, and historic disaster records demonstrate that hurricanes and tropical storms are the highest-cost hazards in terms of loss of life and economic losses in the shortest timeframe. Hurricane Luis (1995), one of the most devastating systems, resulted in a 17% decrease in tourist arrivals, left 7,000 people unemployed, 90% of buildings damaged or destroyed, and economic losses amounting to US $128.35 million or 30.5% of GDP. It took three months to fully restore electricity, highlighting the need for resilient energy systems. In 2008, Hurricane Omar resulted in precipitation of 56.4 mm per hour at its peak, and flood water levels reached 4 to 12 feet in vulnerable communities.

Economic impacts of hurricanes and floods, and resultant costs of adaptation, are disproportionately costly to small island states. Climate models project that maximum wind speed of the strongest hurricanes is likely to increase between 5% (low scenario) and 15% (high scenario), which would increase loss of life and economic losses.

Priority Sectors for Adaptation and Mitigation

The key sectors for addressing vulnerability in Antigua and Barbuda are in the building sector (hotels, housing, businesses); wetlands, waterways and coastal ecosystems; potable water; and grid-interactive renewable energy systems. Cross-cutting areas include traditional livelihoods, in particular livelihoods for female headed households.

The key sectors for emissions are electricity, transportation, deforestation and land use change. The mitigation challenge for catalyzing mitigation interventions include legal and market structures for electricity, access to affordable financing, and access to appropriate low emission technology for island states. Antigua and Barbuda is also seeking to address the issue of sustainable consumption and production, targeting procurement practices as a tool for reducing emissions and building resilience through purchasing practices.

1.2 Development profile

Antigua and Barbuda currently relies heavily on the tourism sector as the main engine of growth. The strong performance of the industry and the closely related construction activity in previous years contributed to a

Figure 3. Flooding in the outskirts of the capital of St. John’s following the passage of Hurricane Omar in 2008.


relatively high standard of living in the domestic economy. The economy of Antigua and Barbuda experienced average real growth of 6.82% during the period 2003 to 2007. However, the onset of the global financial crisis and recession in major source markets, contributed to a steep decline of 10.7% in Gross Domestic Product (GDP) in 2009 from growth of 1.5% in 2008, while growth has remained weak thereafter. Furthermore, unsustainable debt levels (96.3% of GDP in 2009), have stifled our ability to effectively respond to the crisis and to address competitiveness issues, while severe structural vulnerability and governance capacity have reduced our resilience.

There is an urgent need to re-invigorate growth in the domestic economy of Antigua and Barbuda and to place it on a more sustainable path in the medium to long-term trajectory. This is critical if the country is to recover lost ground with respect to social and economic development; maintain its high level of human development; and reduce poverty and vulnerability.

The Government of Antigua and Barbuda will target growth in real GDP of 5% over a sustained period, and a decline in unemployment towards full employment levels. Accelerating growth will require, among others, stabilizing the economy, including resolving challenges in the financial sector; expanding the fiscal space for pursuing growth strategy; developing alternative financing vehicles; improving the competitiveness of enterprises, in particular for key resources of water and energy; improving the organization of productive activity; and strengthening the capacity of the domestic private sector to play a greater role in absorbing labour in order to relieve employment pressure within the public sector. Strengthening the capacity of the domestic private sector will in turn better position the public sector to finance important public sector investments and to pursue its growth strategy, sustainable development indicators and ambitious adaptation and mitigation goals.

Domestic Credit Levels and the Ease of Doing Business

The World Bank ease of doing business ranking indicates that, for a small island, Antigua and Barbuda is maintaining adequate standards in most areas except in the areas of tax collection, and in access to capital. A private sector assessment conducted by the Inter-American Development Bank (IADB) in 2013 found that access to finance was a critical challenge to private sector development. The report determined that:

Given the important role played by finance in the development process, the country’s poor ranking in terms of access to credit represents a significant risk to private sector development and growth … Antigua and Barbuda has attempted to fill the credit void through the establishment of a national development bank, but the credit needs of the private sector significantly outstrip the available resources.

In addition, the difference between the interest rate charged by banks on loans and the interest rate paid by banks on savings deposits – the interest rate spread – is 8 percentage points in Antigua and Barbuda; one of the widest among its comparator group of countries globally, as reported by the IADB. Access to capital for climate change will therefore be a challenge and could drive up the already high cost of doing business unless new and additional sources of capital are made available to implement adaptation and mitigation.

Development Strategy

The Medium-Term Development Strategy (2016 to 2020) was prepared by the Ministry of Finance and Corporate Governance in September 2015 to outline progressive actions towards the vision of, “A harmonious, prosperous and modern Antigua and Barbuda founded on the principles of sustainability and inclusive growth; where equality


of opportunity, peace, and justice prevail for all citizens and residents.” The sustainable development plan strives to increase national wealth, support social systems, conserve a healthy natural environment cultural heritage, and enhance citizen security.

To improve the quality of life for all Antiguans and Barbudans, the Government is continuing an aggressive path of attracting foreign investments in the areas of tourism development, housing, and the service sectors. The Prime Minister’s 2017 Budget Speech called for renewed investments in critical infrastructure, including roads, schools, hospital and clinics.

The Government is seeking to manage risk in its new investments by using systematic approaches, including Environmental Management Systems ISO standards, developing a sustainable procurement policy for the public sector, reviewing the coastal zone management plan to consider the impacts of climate, reviewing the land use plan for wetlands and watersheds, and updating and implementation of the Building Code to include climate adaptation in built facilities.

In financial risk management, in addition to the traditional financial risks, there is an emerging need to address the issue of stranded assets caused by climate change. To address climate-related risks, the Government has operationalized the Sustainable Island Resource Framework Fund (SIRF Fund) as an important mechanism for channeling funds from different international and national sources that piloting and scale up innovative financing mechanisms that systematically manage risk.

Financial, Technology and Capacity Building Needs

Antigua and Barbuda requires international support from multilateral and bilateral sources, including through the Green Climate Fund (GCF), the Global Environment Facility (GEF), the Adaptation Fund, and other sources, for capacity building, climate finance and technology transfer to strengthen its current programs, policies and regulations; to develop and implement new initiatives; and to fully assess and address the impacts of climate change, as defined in the adaptation and mitigation targets.

Activities requiring support for implementation include inter alia:

Y Support for the development and implementation of a Low-emission Climate Resilient Technology Strategy and Road Map that includes repurposing, decommissioning, and disposing of stranded assets;

Y Comprehensive assessment of the cost of mitigation and the incremental cost of adaptation; Y Enhancing Measurement, Reporting and Verification (MRV) processes; Y Development of standardized baselines to assess and monitor the impacts of implementing INDC

adaptation and mitigation initiatives; Y Support for data collection, storage and management; and Y Support for education, training, public awareness, public participation, public access to information, and

international cooperation throughout implementation of the NDC targets.

1.3 Climate change policy response

Snapshot of national initiatives under the UN Framework Convention on Climate Change


Antigua and Barbuda has completed the following national initiatives under the UNFCCC:

./ Nationally Determined Contribution (NDC)

./ First, Second and Third National Communications

Antigua and Barbuda has applied for and/or secured funding to complete the following national initiatives:

./ Biennial Update Report (BUR)

./ National Adaptation Plan (NAP)

“Changes to the current systems of Governance and economic

management to allow Antigua and Barbuda to adapt to the impacts of

climate change such that the economy and the people can withstand a

Category 5 hurricane, one meter of sea level rise, and a drought lasting over

three years, while the core economy is still functioning at a capacity similar to

that as if climate change were not occurring.”

Box 1. Transformational Change – Our Definition


Table 1: Summary of INDC/NDC targets Estimated resources required USD $

Conditional Adaptation: 1. By 2025, increase seawater desalination capacity by 50% above

2015 levels. 2. By 2030, all buildings are improved and prepared for extreme

climate events, including drought, flooding and hurricanes.

3. By 2030, 100% of electricity demand in the water sector1

and other essential services (including health, food storage and emergency services) will be met through off-grid renewable sources.

4. By 2030, all waterways are protected to reduce the risks of flooding and health impacts.

5. By 2030, an affordable insurance scheme is available for farmers, fishers, and residential and business owners to cope with losses resulting from climate variability.

USD 450 – 670 million

Mitigation: 1. By 2020, establish efficiency standards for the importation of all

vehicles and appliances. 2. By 2020, finalize the technical studies with the intention to

construct and operationalize a waste to energy (WTE) plant by 2025.

3. By 2030, achieve an energy matrix with 50 MW of electricity from renewable sources both on and off-grid in the public and private sectors.

4. By 2030, all remaining wetlands and watershed areas with carbon sequestration potential are protected as carbon sinks.

USD 350 – 500 million

Unconditional 1. Enhance the established enabling legal, policy and institutional environment for a low carbon emission development pathway to achieve poverty reduction and sustainable development.

2. By 2020, update the Building Code to meet projected impacts of climate change.

USD 230 million

2. Country Agenda and GCF Engagement

The following section provides a summary of national plans and alignment with GCF operational modalities and investment criteria.

2.1 Institutional arrangements Antigua and Barbuda is a member of the Organization of the Eastern Caribbean (OECS), a nine-full member grouping comprising Antigua and Barbuda, the Commonwealth of Dominica, Grenada, Montserrat, St Kitts and Nevis, St. Lucia and St Vincent and the Grenadines. The cumulative population of the OECS member states (not including the associate


members) is 620,000 people. The Revised Treaty of Basseterre Establishing and Organisation of Eastern Caribbean States Economic Union (the Revised Treaty) provides the legal framework for integration.

OECS Member States have pursued regional unity, solidarity and cooperation, including in climate change, environmental protection and sustainable development. The St. George’s Declaration of Principles for Environmental Sustainability, adopted by Member States in April 2001, provides a regional framework response to climate change for the OECS. The OECS Council of Ministers for Environmental Sustainability (COMES) meets annually to implement the regional agenda, and in 2016 the Ministers established a Climate Change Working Group with representatives from each Member State. Antigua and Barbuda is an active member of this regional architecture to implement the climate priorities in the St. George’s Declaration.

In Antigua and Barbuda, the national project management framework consists of two implementation/management units, and one coordination/oversight unit. The management entities are the Project Management Unit (PMU) and the Technical Advisory Committee (TAC), while the overseeing entity is the Project Management Committee (PMC). The institutional arrangements and outlined within the draft No-objection Procedure.

The Department of Environment has also been nominated by the Government of Antigua and Barbuda as Antigua and Barbuda’s direct access National Implementing Entity (NIE).

National Designated Authority and No Objection Procedure

The Department of Environment (DOE) in the Ministry of Health and the Environment is responsible for the coordination and implementation of all multilateral environmental agreements (MEAs) including climate change, biodiversity, land degradation, among others. The DOE is also the focal point of the Adaptation Fund and the Global Environment Facility (GEF). The Government’s strategy is to build capacity for MEAs in one agency to provide for enhanced accountability and coordination across agencies and stakeholders, and to accommodate Antigua and Barbuda’s small island context that requires streamlining of institutional structures.

Antigua and Barbuda’s National Designated Authority (NDA) to the Green Climate Fund is the DOE, and the Ministry of Finance serves as a co-signatory for the No Objection procedure for the GCF. The No Objection procedure was developed with Antigua and Barbuda’s first Readiness grant, and was approved by the PMC in March 2017. In 2016, the Ministry of Foreign Affairs and the office of the Attorney General’s Office prepared and completed the Privileges and Immunities (P&I) agreement with the GCF.

The DOE is the national coordinating agency with its roles and responsibilities established under the Environmental Protection and Management Act of 2015. The Ministry of Finance provides a role in the in ensuring that all financing risk for projects being implemented by Accredited Entities are known, have undergone comprehensive consultation, and the proposals are approved based on agreed criteria.

The Ministry of Foreign Affairs chairs the National Coordinating Mechanism (NCM), which provides a forum for the political coordination of the country’s engagement with the Green Climate Fund. As such, Antigua and Barbuda’s Ambassador for Climate Change presents annual reports to the Minister of Foreign Affairs.

Other agencies and stakeholders that assist the NDA to performs its responsibilities are the oversees Missions in New York and London, the Ministry of Public Work, the Antigua Public Utilities Authority, the private sector and the non-governmental organizations including the Marine Ecosystems Protected Areas Trust (MEPA Trust). The Department of Environment therefore coordinates the work of the NDA with established multi-stakeholder technical and oversight committees.


National Climate Change Engagements with other International Partners

The Department of Environment (DOE) is the national focal point for climate change, and has a responsibility for coordinating climate finance initiatives in Antigua and Barbuda. Climate change projects are developed to align and further the implementation of national policies, goals and strategies. The SIRF Fund is the designated national fund for climate change, and is the mechanism through which international climate finance catalyzes sustainable interventions and leverages national sources of financing to achieve transformational outcomes for the country (see Box 1).

The DOE is assisted in its climate coordination work by the consultative body of the Technical Advisory Committee and the oversight of the Project Management Committee, and the legally appointed National Coordinating mechanism (NCM). This system is designed for efficient programming of climate finance, technology transfer and capacity building.

Table 2. Relationships with existing Accredited Entities and relevant partners Entity/Partner Name

Area/s of focus Engagement in country Efforts to strengthen engagement

Organization of Eastern Caribbean States (OECS) Commission

Vulnerability; Adaptation; Sustainable Development

The OECS Commission is implementing a sub- regional GCCA project that is developing the climate change policy for Antigua and Barbuda. The Commission is the Secretariat for the OECS Climate Change Working Group.

Antigua and Barbuda has allocated USD 100,000 of its Readiness support for the OECS Commission to be accredited to the GCF.

UN Environment

Ecosystem Based Adaptation, Sustainable Procurement, enabling activities for the GEF.

There is no in-country presence for UNEP. UNEP however assists Antigua and Barbuda to program the country’s GEF Portfolio.

The engagement with UNEP is very strong and will utilize funding from project development facility to assist the partnership to develop projects in the program.

CARICOM Climate Change Center (5Cs)

Renewable energy and adaptation.

There is no in country presence for 5Cs, however Antigua and Barbuda has participated in several regional projects being executed by the 5Cs.

Antigua and Barbuda plans to identify a project for the 5Cs to program on behalf of Antigua and Barbuda.

UNDP Sustainable Financing, Environment and Social and gender. Protected areas Management.

The UNDP country office is in Barbados. Antigua and Barbuda has a long-standing and productive relationship with UNDP, which implemented the first full size GEF project with the DOE serving as Executing Entity.

The NDA plans to continue to build the relationship with UNDP.

Caribbean Development Bank (CDB)

Loans for RE and EE ongoing with Antigua and Barbuda.

The Bank is based in Barbados and has a significant loan portfolio with Antigua and Barbuda.

The Ministry of Finance intends to engage actively with the bank to further promote the Climate portfolio.


2.2 Roles and contributions of key stakeholders

Key Stakeholder Groups and Consultations

Antigua and Barbuda’s national circumstances facilitate consultative engagement; as a small country, key stakeholders meet in person monthly via the Technical Advisory Committee (TAC). The TAC includes representatives from 17 key government agencies, 3 non-governmental organizations and one private sector coalition, and provides technical guidance, policy recommendations and support; facilitating communication, cooperation and coordination among relevant stakeholders and other projects. The TAC has been meeting monthly since 2014 and has been a key consultative body in the NDC formulation and designing Antigua and Barbuda’s engagement with the Green Climate Fund.

Stakeholder engagement being conducted on a continuous sustained basis allows for insight into the social consequences of the project, an appropriate gauge on the expectations that stakeholders have of the project; identification and analysis of social, political, environmental, economic contexts in the target area; and the determination of their appropriate responses and strategies for mitigation of conflict.

Consultations on the country programme began with the development of the INDC in 2015. The process included reviewing and synthesizing consultation reports and household surveys from the CARIBSAVE climate change vulnerability assessment, TAC and PMC discussions, and two meetings of the Cabinet of Antigua and Barbuda. Special meetings with non- governmental organizations were held in community centers as well as jointly with Government stakeholders on specific projects identified in the country programme. In addition to multi-sector technical input, targeted stakeholder consultations on the national Climate Change Policy and Action Plan, which is currently under development with support from the Global Climate Change Alliance (GCCA), provided valuable input into the country programme.

While the government and civil society consultations delivered fruitful results, engagement with the private sector has not been as successful as that of the other stakeholders. The country programme, which includes the reimbursable grant program designed for the private sector, will require additional consultations. Antigua and Barbuda’s second Readiness grant will deliver a scoping study and targeted consultations with the private sector.

(i) What are their expected roles in the implementation of the country programme?

Continuous stakeholder involvement throughout the project cycle is important to bringing about behavioural change in tandem with project interventions, and achieve the transformational goals of the country programme in line with GCF priorities. Stakeholders are expected to participate in project implementation, and technical and policy advice. Sectors of the projects will be implemented by the NGO Community. It is expected that the private sector will play a role in the sustainable procurement approach and make sustainable produced products available in their inventory.

(ii) Is there particular technical assistance, policy dialogue support, or other support that might enable national stakeholders to take processes forward? Is there a role that GCF support could play in this context?

Antigua and Barbuda’s NDA and nominated NIE will be taking steps to include funding for the respective stakeholders in the Readiness program, to build capacity and facilitate the successful implementation of the country programme. To this end, Antigua and Barbuda’s Readiness program includes support and capacity building for the multi-sectoral committees and partners that are core to the consultative process.


Table 3: Overview of consultation processes Stakeholder group Date of consultation Type or objective of consultation Outcome National stakeholder consultation

20 November 2014 Consultations on the National Vulnerability Analysis for Antigua and

Validation of the National Vulnerability

Barbuda: Vulnerability Impact and Adaptation Analysis in the Caribbean (VIAAC)

Impact and Adaptation Analysis for Antigua and Barbuda

National stakeholder consultation

25 February 2015 Climate change workshop under the Regional Gateway for Technology Transfer and Climate Change Action in Latin America and the Caribbean

Capacity building in climate change

Parliament of Antigua and Barbuda

March – April 2015 Parliamentary consultation and discussion on the Environmental Protection and Management Act

Passage of the EPMA (2015) in Parliament

Multi-sector Committee 26 August 2015 INDC stakeholder consultation workshop Submission of the NDC Cabinet of Antigua and Barbuda

23 Sept 2015 A high level presentation on Climate Change and the Paris Agreement

Approval of NDC targets

Multi-sector Committee 30 March 2016 Consultations under the first Readiness proposal on the implementation plan for project activities

Strategy for implementing Readiness capacity building support

Communities on the northwest coast of Antigua

June – August 2016 Door-to-door household surveys on climate vulnerabilities and their demand for concessional loans for adaptation

Market research paper on the demand for concessional loans for adaptation

Parliament of Antigua and Barbuda

September 2016 Ratification of the Paris Agreement Ratification of the Paris Agreement

Key climate change stakeholders in all sectors

Decemerb 2016 Launch of the Special Climate Change Fund (SCCF) project in Antigua and Barbuda

Approval of the project implementation plan

Multi-sector Committee 7 February 2017 Review of Antigua and Barbuda’s country programme to the GCF

Official submission of country programme

Cabinet of Antigua and Barbuda

21 March 2017 Presentation to Cabinet on the draft Regulations for the SIRF Fund and the Revolving Fund Programme for Adaptation

Cabinet noted the draft Regulations

2.3 Identification of country priorities for the GCF

Y Summarize national priorities derived from policies identified in Section 1.3

Adaptation:

Water – Antigua and Barbuda needs to move towards 100% reverse Osmosis for the islands. Droughts are more frequent and lasting longer. There is also a need for additional on-site storage for community buildings such as schools and clinics; Resilient energy – already Antigua and Barbuda has about 25% redundancy at the national level. This will have to increase over the next 4 years; Resilience in buildings – the revised Building Codes for climate resilience will establish guidelines for


buildings that can withstand category 5 storms. The private homes and businesses will need access to financing at reasonable rates for this to take place. This is the key area of concern for Antigua and Barbuda; Protection of beaches and coastal areas; and Protection of watersheds and waterways to reduce flooding and control surge in the population of vectors

Mitigation:

Energy – electricity and transportation sectors; Protection of last remaining forest and watershed areas; Energy Efficiency and Renewable Energy in Buildings; and Sustainable procurement policy to reduce the use of carbon intensive products.

Capacity Building:

Land use zoning and local area planning; and Short- and long-term training in all areas of climate adaptation and mitigation.

Y Summarize the process of distilling these priorities into projects and programmes that are consistent with GCF policies.

Some questions to be addressed in defining these priorities: o Is there early alignment with GCF’s fund level strategic impacts across mitigation and adaptation?1 o Is there alignment with the investment criteria (impact potential, paradigm shift potential, sustainable

development potential, needs of the recipient, country ownership and efficiency and effectiveness) 2

Antigua and Barbuda’s approach to achieving transformational change towards a low emission climate resilient development pathway is to understand the island’s core vulnerabilities to climate change and sources of emissions; to develop a programme and pipeline of projects that will have the greatest impact on the ground, demonstrating innovative and sustainable financing mechanisms for long-term impact; to incorporate interventions into national law, standards, policies and regulations; and to implement projects that work collaboratively with all sectors – government, NGOs and the private sector – to maximize local buy-in and ownership.

Antigua and Barbuda’s country programme is aligned with the eight investment priorities of the GCF, and the projects will achieve significant co-benefits. The programme will achieve impact potential by integrating adaptation into development processes, thereby avoiding lock-in of long-lived, climate-vulnerable infrastructure, in particular coastal infrastructure that is vulnerable to sea level rise.

Antigua and Barbuda’s NDC mitigation analysis indicated a potential to reduce national emissions by 36% below Business as Usual by 2025:

1 The 8 GCF Fund level strategic impacts are listed on the GCF website, here. Detailed information is provided in the mitigation and adaptation performance measurement framework, found here. 2 Initial guidelines on the investment criteria are provided in the GCF Investment Framework provided here with detailed activity- specific sub-criteria and indicative assessment factors further defined here.


GHG Emissions (Thousand tCO2e)Scenario 2025 2030

BAU 1 955 1,161BAU 2 (includes

Adaptation)973 1,178

Mitigation 1 866 1,033Mitigation 2 644 786Mitigation 3 619 737Mitigation 4 607 711

Total GHG Reduction 348 450% Reduction

(compared to BAU)36% 38%

Figure 4. Analysis of the mitigation potential of Antigua and Barbuda's NDC targets using the LEAP model (October 2015). The waste-to-energy facility NDC target will have a significant impact on emissions (Mitigation 2)

The interventions are designed to a suite of projects to achieve long-term impact, and to leverage Government co-financing and resources in the private sector, to achieve paradigm shift potential. The sustainable development potential of the country programme is reflected in the strategic targeting of vulnerable sectors such as the dual vulnerability of water and energy. Antigua and Barbuda’s high debt-to-GDP ratio and constraints accessing capital, contrasted with the island’s disproportionate vulnerability to climate change, underscore the needs of the recipient.

Having established a strong understanding of the project or programme at the endorsement phase, Antigua and Barbuda’s NDA and Committees will be well positioned to continue to facilitate country ownership and stakeholder buy-in throughout project implementation.

Finally, mainstream the No Objection procedure and the consultative processes into established and proven decision- making processes of the GEF and Adaptation Fund and other national processes will support efficiency and effectiveness of GCF programming.

o What are the benefits of GCF intervention relative to other financiers?

Antigua and Barbuda is applying for the climate-relevant portion of funding for each of the projects. As a party to the Paris Agreement, Antigua and Barbuda is now applying to the Financial Mechanism of the Convention of which the GCF is an operating entity. The country understands that the GCF serves this Agreement and therefore the first steps in Antigua and Barbuda’s request is meeting the contributions outlined within its NDC.

The country has some access to capital and only expects that the GCF would fund the sections of the projects that is caused by climate change.

o Have all financing options been explored?

Antigua and Barbuda is a highly indebted country with limited access to capital. Further, the country is a Party to the Paris Agreement and the GCF is the funding mechanism for this Agreement. Other options are being explored but the GCF is one of the first options since it is designated by the UNFCCC.

o Are financing needs commensurate to the country’s needs?

The financing requested is consistent with the predicted and actual impacts of climate change in Antigua and Barbuda, as outlined in the climate section of this document, and financing is determined to be at the levels that can trigger


transformational change for Antigua and Barbuda as a small island state to achieve the objectives of the Paris Agreement in the national context. While the financial needs for adaptation in particular are significantly higher than the amount being requested, it has been determined that the proposed program will place the Country on a path to a more resilient and low emission economy.

o Which options for leveraging the private sector have been assessed?

The Sustainable Island Resource Framework Fund (SIRF Fund) is designed to leverage private sector financing at the household and small business level through a revolving reimbursable grant program to reach the private sector at the appropriate level. The private sector, in particular the tourism sector, will be engaged through consultations under the Readiness programme, and the NDA will facilitate private sector engagement with the regional and international AEs of the GCF with on-lending and blending accreditation.

Y Where possible an analysis of the methodology used in the prioritization process can be provided as an Annex to the Country Programme.

The country programme present projects that are designed to implement the adaptation and mitigation priorities submitted in the NDC in 2015. The NDC actions were prioritized leading up to the negotiations of the Paris Agreement.

Antigua and Barbuda’s No Objection procedure is designed to embody the principle of country ownership and as such presents criteria for evaluating GCF proposals. These criteria have also been applied to the development of the country programme.

Criteria 1. The funding proposal is in conformity with Antigua and Barbuda’s national priorities, strategies and plans.

- Is the funding proposal in compliance with national law and policy? - Will the funding proposal advance national adaptation and/or mitigation targets? - Will the funding proposal incur a debt burden by the Government of Antigua and Barbuda?

Criteria 2. The funding proposal complements, and does not duplicate, ongoing projects and programmes.

- Does the funding proposal duplicate an existing project or programme? - Does the funding proposal complement and add value to an existing project or programme?

Criteria 3. Affected communities, relevant local civil society, public and/or private sector entities have been consulted and actively involved in planning and implementation.

- Have relevant stakeholders been consulted in the preparation of the funding proposal? - Are there measures in place to manage any potentially significant negative impacts to relevant stakeholders? - Has the funding proposal identified opportunities to build local capabilities and competencies?

2.4 Country Portfolio

Y Overview of the pipeline for projects and programmes, Project Preparation Facility requests, Readiness and accreditation.

The country program will rely on the partnering with Accredited Entities that can program the range of grants, reimbursable grants and loans. Antigua and Barbuda will accredit one national direct access entity, and this entity is expected to program about one third of the projects in the country programme. Antigua and Barbuda is in the process of identifying the appropriate AEs to be engaged, including AEs that are in the pipeline for accreditation.


The NDA/pending NIE will apply to the project preparation facility (PPF) for funding to develop the projects identified in the country programme. The implementation of the National Adaptation Plan (NAP) Readiness support is expected to generate the information for the ecosystem-based adaptation projects in the programme pipeline, and will complement the PPF application.

Y In the action plan below each project or proposal outline the next steps for taking it forward, along with the lead actor

for taking the action forward and a timeline by which the action should be completed.

Table 4: Country projects/programmes pipeline Project Title Description Accredited Entity Submission

timeframe Demonstrating Enhanced Direct Access in the public, private, and civil society sectors of Antigua and Barbuda, Dominica, and Grenada in the Eastern Caribbean (EDA)

The project will be implemented in three (3) countries within the Eastern Caribbean – Antigua and Barbuda, Dominica and Grenada. The overall goal of the project is to contribute to the achievement of the provisions enshrined in Article 24 of the Eastern Caribbean’s Revised Treaty of Basseterre governing environmental sustainability, namely addressing the causes and impacts of climate change, by piloting an integrated and collaborative approach to increasing adaptive capacity of vulnerable communities.

The objectives of the project are three-fold: (i) to demonstrate the benefits of enhanced direct access in the public, private and non- governmental sectors for supporting concrete action at the local level in selected Member States of the Eastern Caribbean, (ii) to achieve open, transparent and multi-stakeholder decision-making systems that allocate climate finance to vulnerable communities, and (iii) to increase the adaptive capacity of ecosystems and built infrastructure in vulnerable communities to the projected impacts of climate change.

Department of Environment, Antigua and Barbuda (pending accreditation)

Re-submission in October 2017 (B.18)

Fund level strategic impacts

Total financing: 23M

Status

6, 7 with obenefits for 1

and 3

GCF: 20 M

Other: SCCF, Adaptation Fund

First draft submitted to the GCF in August 2016; Readiness support to develop the EDA project document was secured; the Department of Environment has applied for Accreditation (fast- track).

Action Lead Timeline Submission of revised funding proposal

National Implementing Entity (pending) October 2017 (B.18)


Project Title Description Accredited Entity Submission timeframe

Resilience to Hurricanes, Floods and Droughts in the Building Sector

Physical infrastructure in Antigua and Barbuda must be adapted to the dynamic threats of water scarcity, heavy rainfall events, and more intense storms and hurricanes.

The project will implement the NDC target, By 2030, all buildings will be improved and prepared for extreme climate events, including drought, flooding and hurricanes. The project will build the resilience of key Government and community buildings to Climate Change to support services in health, education and emergency response (police, fire stations, etc.).

UN Environment October 2017 (B.18)

Fund level strategic impacts:

Total financing: Status

6, 7 with cobenefits for 1 and 3

GCF: $35 M

Other: Government of Antigua and Barbuda ($TBD)

Concept Note will be submitted to the GCF in June 2017.

Full project proposal anticipated for B.18

Action Lead Timeline Submit Concept Note to GCF UN Environment June 2017Full funding proposal UN Environment October 2017 (B.18)


Transformational Adaptation Programme for Water in Antigua and Barbuda (TAP)

Antigua and Barbuda, already an arid island state, lie in a zone that is expected to receive 30 – 50% less rainfall in 2090 compared to late twentieth century rainfall norms. Surface water will be an increasingly unreliable source of potable freshwater in Antigua and Barbuda due to climate change impacts, with implications for both household storage and cisterns, and nationally with surface water catchments.

The programme will achieve transformation of the water sector to cope with projected climate impacts through an integrated approach of increasing water storage, addressing distibution loses, imrpoving surface catchment, wastewater treatment and recycling, and increasing desalination supply.

Selection in process 2019



6, 7 with co benefits for 1 and 3

GCF: 50 M

Other:UN-HABITAT; Government of A&B; GEF

PPF application under development

Action Lead Timeline Project Preparation Facility National Implementing Entity (pending) 2017



St. John’s as a model Sustainable City catalyzing a low- emission development pathway

A national sustainable land use framework was developed and approved by Cabinet in 2012, outline a sustainable spatial development strategy for the country (SIRMZP, 2012). This project will develop and implement a local area sustainable urban areas plan to transition Antigua and Barbuda’s urban areas into low- carbon, resilient sustainable communities using sustainable procurement practices.




7 with cobenefits for 1, 3

GCF: 35 M

Other: UN-HABITAT; Government of A&B; GEF

Concept is being developed

Action Lead Timeline Project Preparation Facility application

National Implementing Entity (pending) 2017


SIRF Fund Revolving for Adaptation

This project will build upon Adaptation Fund and GEF-approved projects that established the Adaptation Revolving Fund for Antigua and Barbuda’s Sustainable Island Resource Framework Fund (SIRF Fund). The national Fund targets adaptation activities in the building sector and funds are provided to traditionally high-risk groups that are unable to access credit. Communities in Antigua and Barbuda use a “box hand” as a local microfinancing for persons who cannot get financing through traditional sources. The project will support low-income home and building owners, single-headed home (including female-headed homes), farmers and fishers.




6, 7 with cobenefits for 1 and 3

GCF: 10 M

Other: Government of antigua and Barbuda 13M

The Revolving Fund is being piloted with funding from the GEF and the Adaptation Fund as well as the proposed GCF Enhance Direct Access program.

Action Lead Timeline Finalization of feasibility studies; Technical Feasibility Studies for Project focus.

National Implementing Entity (pending) 2017


Protecting and Restoring Watersheds,

This project will reduce exposure to projected climate change impacts by implementing ecosystem-based adaptation to protect coastal



Coastal Wetlands and Beaches for Ecosystem-based Adaptation and Sustainable Livelihoods

areas and wetlands for flood alleviation (restore buffer zones, physical setbacks) to reduce flood risk zones, restoring vegetative cover to reduce erosion, re-engineering waterways and restoring coastal areas as critical natural assets. Coastal wetlands will be protected as carbon sinks, and sustainable livelihood opportunities will be supported.



5, 8 with cobenefits for 4

GCF: 45 M

Other: Government of Antigua and Barbuda

The DOE submitted the NAP readiness application for USD 3 M in January 2017

Action Lead Timeline NAP Readiness support for technical studies

National Implementing Entity with approval from the GCF

April 2017

Full project proposal submission to the GCF

National Implementing Entity 2018


Reducing Emissions through a Blue Economy: Establishing a Ridge to Reef Sustainable Management System for the Southwest Area of Antigua

In 2006, land use change and forestry contributed 7% of national emissions. Land use change can be mitigated through removal of GHG emissions by carbon sinks. The Environmental Act of 2015 establishes the legal backing such that, “Where the area is protected as a carbon sink it shall follow the principles developed by the UNFCCC.”

The project will implement the NDC target, By 2030, all remaining wetlands and watershed areas with carbon sequestration potential will be protected as carbon sinks. The demonstration area will be Antigua’s southwest watershed and reef system. The goal is to reduce vulnerability of communities and businesses, by increasing the ability of the watersheds to handle extreme rainfall and reduce the incidences and impacts of coastal erosion, while increasing the resilience of the built environment simultaneously to cope with the multiple stressors of climate change.

Department of Environment, Antigua & Barbuda

2019




GCF: 10 M

Other: Government of A&B

Baseline studies have been conducted

Action Lead Timeline NAP Readiness support to collect baseline data

Department of Environment 2017

Concept and full proposal submission to the GCF

Accredited Entity 2018



Reducing Emissions in the Transportation Sector

Reduction of GHG emissions from the transportation sector by urban planning, emissions standards in vehicles, and converting mass transit vehicles from fossil fuel to electric, using renewable energy sources. The project will establish an incentives framework for the private sector to transition to electric vehicles.

The reimbursable grant component will be programmed as a revolving fund with the DOE operated SIRF Fund for the purchase of electric vehicles for public sector transportation. Grants will be programmed for the establishment of the infrastructure in public places and to prepare the policy and legal framework for the transition to sustainable transportation including public transportation for Schools, health, and Government sectors.




1, 2 with cobenefits for 5, 7

GCF:

40 M

Other: Bilateral support; Government of Antigua and Barbuda

Antigua and Barbuda has received USD 625,000 through bilateral support to conduct financial, technical and EIA studies

Action Lead Timeline Financial, technical and environmental and social feasibility studies

National Implementing Entity with partner agencies

2017

Concept and full proposal AE to be identified 2018


St. John’s as a model Sustainable City catalyzing a low- emission development pathway

A national sustainable land use framework was developed and approved by Cabinet in 2012, outline a sustainable spatial development strategy for the country (SIRMZP, 2012). This project will develop and implement a local area sustainable urban areas plan to transition Antigua and Barbuda’s urban areas into low- carbon, resilient sustainable communities using sustainable procurement practices.




7 with cobenefits for 1, 3

GCF: 35 M

Other: UN-HABITAT; Government of A&B; GEF

Concept is being developed





Waste-to- Energy Facility for emissions reductions

The project will implement the NDC target to, By 2020, finalize the technical studies with the intention to construct and operationalize a waste to energy (WTE) plant by 2025.

The project will finalize technical studies for an anaerobic digester/waste to energy (WTE) plant to process 80,000 tonnes/yr sorted municipal solid waste and 13,000 tonnes/yr organic waste from distillery; construct and operationalize the plant. Emissions savings from this project are estimated at 200,000 tonnes CO2-e per year.





GCF: 50 M

Other: Concept is being developed



Table 5: Country Project Preparation pipeline Project Title Description Accredited Entity Submission

timeframe Designing a Climate Secure Future for Water in Antigua and Barbuda

Antigua and Barbuda is applying for funding to conduct the baseline studies for the water sector transformation programme.

Antigua and Barbuda will augment the PPF request with support from the Government and other bilateral and multilateral sources.

National Implementing Entity (pending)

July 2017



6, 7 with cobenefits for 1 and 3

GCF: 800,000

Other: Gov’t of A&B

PPF application under development

Action Lead Timeline Application for PPF NIE (pending) July 2017

Table 6. Country Readiness programme pipeline Title Description Delivery Partner Submission timeframe Realizing direct

ccess climate financing in

ntigua and Barbuda and the

astern

Antigua and Barbuda’s second Readiness proposal will support the accreditation of a national direct access entity; support the further development and submission of the Enhanced Direct Access (EDA) funding proposal; host a sub-regional Structured Dialogue for the Organization of Eastern

Department of Environment

Initial submission in 2016.

Total financing: Status USD 620,250 Approved March

2017; currently under Implementation


Caribbean (ATG RSS 002)

Caribbean States (OECS); and conduct preliminary studies to inform project design.

Action Lead Timeline Readiness (2) implementation Department of Environment March 2017 – 2018

Table 6. Country Readiness programme pipeline Title Description Delivery Partner Submission timeframe National

daptation Planning in

ntigua and Barbuda (NAP)

The project consists of four outcomes: 1) Adaptation baselines via data collection and comprehensive climate change risk mapping. 2) Vulnerability Risk Assessment and Adaptation Plans for up to 3 Government agencies, 3 communities/NGOs and Private Sector entities using a learning by doing capacity building approach. 3) The National Adaptation Plan is developed and approved by Cabinet, and published in the Gazette. 4) A sustainable financing strategy is developed to facilitate NAP implementation via the SIRF Fund in the Government, community, and the Private Sector.

Department of Environment

Application submitted January 2017

Total financing: Status $3 million Application under

review

Action Lead Timeline Revise and resubmit application Department of Environment June 2017

Table 6. Country Readiness programme pipeline Title Description Delivery Partner Submission timeframe Supporting inancial

institutions n Antigua and

arbuda and the Eastern

aribbean to ccess the GCF

The NDA is partering with UN Environment Finance Initiative to mobilize financial institutions to access the Green Climate Fund in Antigua and Barbuda and the Eastern Caribbean.

United Nations Environment Programme

August 2017

Total financing: Status $600,000 over 30 months Under development

Action Lead Timeline Issue No Objection letter NDA June 2017 Submit Readiness proposal UN Environment Programme August 2017

Table 7. Accreditation pipeline Entity Name Type Action Lead Timeline


Department of the Environment

Government of Antigua and Barbuda

Continue to provide information to the GCF Secretariat and the Accreditation Panel

Department of the Environment

Submitted fast-track Accreditation application in 2016; anticipate accreditation in 2017.

Organization of Eastern Caribbean States (OECS) Commission

Intergovernmental Submit nomination letter for Direct Access accreditation (March 2017)

Facilitate a sub-regional Structured Dialogue for the Eastern Caribbean (April 2017)

Develop a Regional Programme for the OECS

OECS Commission Submit application for accreditation in 2017

3. Monitoring and evaluation Y How will new developments related to economic circumstances, new information on adaptation and mitigation, new

information on changing viability or costs of various options inform updates in the country programme? Y Please outline a practical schedule of periodic reviews/evaluations to effectively monitor progress and adjust course as

necessary? Y Specify which parameters of the country programme will likely require updates and what will be the frequency for

updating the country programmes

The DOE has a fully staffed Data Management Unit (DMU) for monitoring and evaluation, which consists of permanent staff of the DOE as well as long- and short-term consultants. This unit monitors GHG emissions, land uses change and pollution. The Unit of the DOE will prepare a complete program for M&E plan for each project. The aim of the M&E framework is for reporting to the Cabinet, the TAC and the PMC; as well as to the GCF and ultimately to the stocktaking for the Paris Agreement. The M&E plan will ensure that the list of indicators for the program takes into consideration the requirements of the transparency commitments of the Paris Agreement, including financial commitments.

The DMU will use the M&E of the country program as an opportunity to track implementation towards the Sustainable Development Goals (SDGs). The DMU does not have the capacity to track financial indicators and therefore the program will hire the necessary consultants and project teams to assist in data gaps.

The DMU will track the program indicators as agreed in the Funded Activity Agreement (FAA) signed with the GCF, as well as the indicators to assist the Department of Environment with its annual Accreditation Entity reporting and its commitments within the Accreditation Master Agreement (AMA) with the GCF. Project risks including financial viability will be track throughout the implementation and evaluation phases of the project, and where possible will be streamlined into the national development indices.

National reporting requirements include reporting to the Ministry of Finance and the Parliament on all Government expenditures. In addition, the M&E program requires monthly reports to the Ministry of Finance (both technical and financial); Quarterly reports to the GCF and/or AEs, annual technical reports, and biennial independent evaluations. There may be ad hoc reports that investigate specific technical and social factors, such as environment and social management systems. The projects and the beneficiaries must also produce Environmental Management Systems reports, including GHG, once the project is completed.


The current country program as presented here is a 5 to 7-year outlook, and the program will be adjusted as projects are developed and implemented. The change management process will be guided by the outputs of the program results framework. Changes in the program will undergo consultations similar to that of the initial development of the program.

Zambia

Country Programme Date: 20th February, 2017

Republic of Zambia

1::.

Telepnor,o 02 r:,2S23950211-252)9,t02'1•252391 No. • .

REPUBLIC OF ZAMBIA

MINISTRYOFNATIONAL DEVELOPMENTPLANNINGPO Box 30147

Lusaka -Zambia

NDA/6/7/1

161h M orc h. 2017

Mr. Howard Bomsey Executive DirectorGreen Climate Fund (GCF)Songdo. lnceonSOUTH KOREA.

RE: SUBMISSION OF ZAM BIA'S COUNTRY PROGRAMME TEMPLATE

The above subject ma tier refers.

Please tind attached a comprehensive template report outlining Zambia ' sCountry Programme and GCF engagement. Please no te that I am aware that the template will be accessible as o public documenl. l also am aware that the reportmay be used to showcase Zambia as on examp le for other countries and stakeholders.

Cholo J. Choba la (Mr.) No tiona l Focal Point Person Permanent Secretory - DPA

MINISTRY OF DEVELOPMENT PLANNING

-


Republic of Zambia

1. Country Profile

Geographical location Southern Africa Land area 752,614SQ KM Population 15 Million Types of climate Tropical GHG emissions profile 1.5%Key emitter sectors Mining Key climate risks Floods and drought Vulnerable sectors Agriculture and Infrastructure NDA/FP Mr. Chola Chabala National/Regional AEs DBSA, PTA International AEs UNEP. UNDP, KFW, World Bank, Potential AEs nominated Zambia National Commercial Bank (Zanaco),

Development Bank of Zambia (DBZ) and Ministry ofFinance

1.1 Climate change profile

Over the past 30-year temperature trends indicate a steady increase. This is projected to continue increasing in the future. Frequency of seasons with rainfall deficits has increased over the past 30 years especially over the southern and eastern half of Zambia.

The major Climate drivers over Zambia include Inter-Tropical Convergence Zone (ITCZ), Congo Air Boundary (CAB), and extra -tropical troughs. All these phenomena are significantly influenced by the El Nino and La Nina conditions. The impacts include frequent droughts, floods and high temperatures. Major sectors impacted include Agriculture, Water, Energy and Health. Rural populations practice rain fed agriculture and the all country is dependent on hydropower for all socio- economic sectors.

Climate change in Zambia will entail increased frequency and severity of droughts and floods (disasters) that will negatively retard economic growth as Zambia’s economy is heavily natural resources, which are highly sensitive to changes in weather and climatic conditions. This will negatively impact hydropower and agriculture production hence derailing economic growth in all sectors.

Emission is Zambia majorly comes from mining and the Agriculture- Forestry-Landuse (AFOLU) sectors.


Republic of Zambia

1.2 Development profile Zambia’s economic growth in the last five years has been robust and averaged above 5 percent. Economic growth has been aided by growth in the construction, agriculture, mining transport and communications, and the tourism sectors. Nonetheless, the persistent slowdown in the global economy, low commodity prices and some domestic challenges weighed down growth from a high of 7.6 percent in 2012 to 2.9 percent in 2015. Preliminary estimates indicate that growth in 2016 has shown some recovery to around 3.4 percent.

As regards to other macroeconomic fundamental, such inflation, exchange rate, and external sector position remain relatively positive in the last five years. Inflation for instance was contained within single digit levels averaging 8.7 percent between 2011-2014. Inflation however sharply increased in 2015 before returning to single digit level of 7.5 percent in 2016. In line with Government policy for an expansionary fiscal policy to support infrastructure development, the budget deficit urged upwards from 2.4 percent of GDP in 2011 to 9.4 percent of GDP in 2015 then fell to 5.7 in 2016.

Zambia‘s GNI per capita in the last five years averaged US3, 600. Zambia is among the countries in Sub Saharan African with relatively high GNI per capita. GDP per capita has been increasing in the last five years averaging about US1, 500. In 2016 GDP per capital has however, been projected to be lower (see table 1). Nonetheless the Human Development Index have remained almost at the same level over the last five years, this is despite some improvement in in selected indicators such as education and life expectancy.

Domestic credit levels in the last has been relatively high, however recorded a decline in 2016. This was on account tight monetary stance by government to curb inflationary pressures. As a result high lending rates were prohibitive for private sector financing.

Ease of Doing Business in Zambia averaged 90 from 2011 until 2016, highest of 98.00 in 2016 and a record low of 83.00 in 2013. Zambia is ranked 98 among 190 economies in the ease of doing business, and has deteriorated to 98 in 2016 from 84 in 2011. Notwithstanding, the deterioration in ease of doing business, foreign direct investment have increased over the last five years from 5.5% of GDP to 13.6% of GDP . This has been aided by favourable macroeconomic environment despite external shocks.

The overall head count poverty is 54.4 percent. Poverty in Zambia is mainly a rural phenomenon at above 70% compared to less than 30% in urban areas. The main economic activity in the rural areas is subsistence agriculture which mainly rain fed.The table below highlights the performance of key selected indicators.

2011 2012 2013 2014 2015 2016* Growth rate 5.6 7.6 5.1 4.7 2.9 3.4 GDP(K’Million) 114,033 131,274 151,331 167,053 183,381 213,139 GDP(US$ Million) 23,458 24,349 29,586 27,146 21,250 20,673 GDP per capital (US$) 1,624 1,803 1,883 1,738 1,096 1,298 GNI/capita PPP 3,384 3,630 3,640 3,734 3,660 3,600 HDI 0.565 0.576 0.580 0.586 0.586 0.586 Population growth rate 2.8 2.8 2.9 2.9 3.0 3.0 Domestic credit rate growth 30.2 38.8 14.22 14.1 20.9 (10.4) FDI as % GDP 5.5 8.1 10.0 7.8 13.6 Ease of doing business 84 90 83 91 94 98

*Projection


Republic of Zambia

DEVELOPMENT PROSPECTS

a) Macro-economic and fiscal circumstances and poverty reduction strategies

The macroeconomic strategy in the medium to long term aims addressing domestic challenges such as vulnerability to external shocks and climate change effects. Key to this is achieving economic transformation for improved livelihood and creation of decent, gainful and productive employment especially for the youthful population. This will be underpinned by positive, sustained and resilient growth, and fiscal consolidation that supports macroeconomic stability, while improving the country’s competitiveness.

The fundamental niche for Fiscal strategies is to ensure restoration, prudent and sustainable fiscus. The key strategies will be to restore budget credibility, transparency and ensure policy consistence. This will be underpinned by continued fiscal consolidation both on the revenue and expenditure side to provide supportive environment to unlock development bottlenecks and stimulate growth.

In an effort to reduce poverty government strategies anchored on the national development plan and the economic recovery plan. Key to this is the focus on the development of a sustainable, diversified and competitive agriculture sector where the majority of the poor are. Emphasis will be placed on crop diversification to encourage production high value cash crop that resilient to climate change and will be supported by the full migration to e-voucher system1, development of irrigation schemes while scaling up sustainable utilization of wetlands and improve provision of extension services through ICT. Additionally scaling up livestock production through artificial insemination and animal disease control. Promotion of the fisheries sector will be cardinal to stimulate growth through, provision of fingerlings and its associated infrastructure and enhance fish feeding programs and storage.

b) Low emission and clean energy policies/ strategies

The promotion of low carbon development pathways that mitigate greenhouse gas (GHG) emissions and promote climate- resiliency in the most vulnerable sectors of the economy is priority for Zambia. This is the reason several plans and policies such as National Climate Change policy emphasize integration of economic development programmes such as forestry, energy and agriculture with climate change as priority.

One of the ways in which Zambia is promoting green growth is through the use of environmentally friendly sources of energy such as hydroelectric, geothermal, solar, wind, biomass, and biofuels.

Environmentally related tax revenue is also another means to promote green growth. Environmentally related tax revenues are expressed in percentage of GDP. Environmentally related taxes include energy products for transport purposes (petrol and diesel) and for stationary purposes (fossil fuels and electricity); motor vehicles and transport (one-off import or sales

1 E-voucher provides beneficiaries a wider choice of inputs (rather than just maize seed and fertilizer) so as to promote production of other crops such as cassava, cashew nuts and edible oil seeds.


Republic of Zambia

taxes, recurrent taxes on registration or road use and other transport taxes); waste management (final disposal, packaging and other waste-related product taxes); ozone-depleting substances and other taxes.

Zambia has also cooperated with various stakeholders such as the European Union and the United Nations to promote clean energy and green growth. The EU-UNDP Low Emission Capacity Building Programme (LECBP) was launched as part of a joint collaboration between the European Union (EU - European Commission and Member States) and the United National Development Programme (UNDP). Efforts are also focused on reducing the demand for charcoal by providing alternative fuel sources and fuel-efficient technologies like gel fuel and cook stoves

c) Infrastructure investment policies (e.g. related to urban development and transport)

Infrastructure serves a central delivery mechanism in achieving sustainable economic development and in the generation of quality social-economic development in the country. Infrastructure still remains a major challenge to growth, economic diversification and human development in Zambia. Further, Zambia is a land linked country centrally positioned between eight (8) neighbouring countries who are increasingly trading amongst each other to optimize economic benefits. Furthermore, major import and export trade corridors to facilitate economic integration among Southern Africa Development Community (SADC) and Common Market of Eastern and Southern Africa (COMESA) member countries pass through Zambia. As such, Infrastructure development, is one of the Government’s priority areas, and is upheld in the National Development Plans and the National Vision 2030.

Transport infrastructure covers: roads and bridges, railways, airports and aerodromes and maritime and inland waterways. The state of transport infrastructure, however, remains inadequate to sustain and match the desired levels of growth due to weak structural and management capacity resulting in over commitments, high cost of construction and low investment. Government has embarked on a program to improve the infrastructure at all the international airports. This is being done in collaboration with private sector participation. The developments include the runways, terminals and auxiliary facilities in and around the airports such as hotels, shopping malls, Conference facilities etc.

The Government of Zambia embarked on the Link Zambia 8,000 project (Accelerated National Roads Construction Programme) saw the rehabilitation and construction of the road network. The aim was to construct an efficient road network and international highways linking Zambia to South Africa, Zimbabwe, Mozambique, Malawi, Tanzania, the Democratic Republic of Congo and Namibia.

d) Adaptation and risk management policies/strategies

Zambia has various policies that deal with adaptation and risk management, these include among others the national development plans, National Disaster Management Policy, the National Agricultural Policy and the National Irrigation Plan. Disaster risk management and Climate change adaptation are mainly implemented by different government agency established primarily for this purpose. The emphasis has been to have an integrated system for adaptation and risk management across the sectors.


Republic of Zambia

1.3 Climate change policy response

In view of the climate change challenges that the country has been facing in the recent past, Zambia has developed various climate change-related policies, strategies, projects and programs in response to climate change impacts. These include: the National Policy on Environment (NPE, 2007); the National Climate Change Response Strategy (NCCRS, 2010); National Forestry Policy of 2014; National Energy Policy of 2008, The National Agriculture Policy of 2014 and Transport Policy of 2002; National Strategy for Reducing Emissions from Deforestation and Forest Degradation (REDD+, 2015); Second National Biodiversity Strategy and Action Plan (NBSAP2); the National Adaptation Plan of Action on Climate Change (NAPA, 2007); Technology Needs Assessment (TNA, 2013); Nationally Appropriate Mitigation Actions (NAMAs, 2014); Second National Communication (SNC, 2015). The National Climate Change Policy (2016) has also now been developed and launched.

These policies, strategies, programmes and projects are aligned with the Revised Sixth National Development Plan (RSDNP) and the Vision 2030 which promotes “A prosperous middle income country by 2030”, both of which support development of a low carbon and climate-resilient development pathway. In addition, Government ratified the Kyoto Protocol in 2006 among other things to facilitate implementation of the Clean Development Mechanism. The country is also in the process of developing its National Adaptation Plan (NAP) for long term adaptation planning and mainstreaming of climate change into national development planning process. Zambia also adopted a National Climate Change Policy in 2016 and submitted her INDC in 2015. The development of the Seventh National Development Plan (7NDP, 2017-2021) is also underway which will consider climate change issues

Table 1: Summary of INDC/NDC targets Estimated resources required USD $

Conditional Mitigation: Estimated total emission reduction of 38,000GgCO2eq which translates to 47% (internationally supported efforts) against 2010 as a base year; Three programmes are targeted: sustainable forest management; linking sustainable agriculture; and renewable energy and enhancing energy efficiency

Total USD 50 B across mitigation and adaptation.

USD 35 billion: from external sources USD 15 B: from Domestic sources

Adaptation: Three programmes are targeted: strategic productive systems (agriculture, forests, wildlife and water); adaptation of strategic infrastructure and health systems; and enhanced capacity building, research, technology transfer and finance


2.1 Institutional arrangements

The National Planning Department under the Ministry of Development Planning is Zambia’s National Designated Authority (NDA). The NDA is operationalized through the NDA Project Office headed by a National Coordinator who reports to Director National Planning. The essence of establishing a project office was to establish an efficient and fairly independent office and


Republic of Zambia

create balance between mainstreaming functions of the NDA into the Government but still provide the necessary identity and visibility of the NDA. In terms of operations, an NDA Technical Committee composed of all stakeholder institutions in climate change has been established. The main function of the Committee is to receive and assess project proposals to ensure they are within national priorities. Once, examined, the proposals are handed back to accredited entities and a letter of no objection is issued to the GCF if successful. In terms of financing, the NDA is partly financed through a capacity building grant agreement with the GCF. The Government of the Republic of Zambia finances the administrative costs. The personnel are seconded staff from Government as well as Private sector people.

In terms of the policy environment, Zambia now has a National Climate Change Policy. The golden rule in the policy is that an implementer should not be a coordinator. The policy spells at roles of coordination and implementation. Overall coordination is done by the Ministry of National Development Planning and coordination of implementation is done by the Ministry of Lands and Natural resources. Other institutions in charge of sectors such as agriculture, water, energy and the like play their respective roles in implementation.

Table 2. Relationships with existing Accredited Entities and relevant partners Entity/Partner Name


UNDP Agricultural livelihoods and food security

In-country presence. Annual work plan in consultation with Ministry of Agriculture and Meteorological Department. Base funding provided by UNDP partner with co-financing by government.

Mainstream GCF funding consideration into annual work plan.

World Bank Livelihoods community resilience

and Program of Support Development Planning

to the Ministry of Restructuring and formalization of work plan and support to mainstream efforts in development planning process

3. Roles and contributions of key stakeholders

Table 3: Overview of consultation processes Stakeholder group Date of consultation Type or objective of consultation Outcome Cabinet 02/07/2017 Consideration of National Climate Change

Policy Approval of NCCP

Cabinet Office Establishment of National Designated Authority (NDA)

National Planning Department nominated as NDA and Project Office established


Republic of Zambia

Line Ministeries Pre-clearance of project proposals Proposals tabled at NDA National Committee for approval

Private Sector/Banks Adverts for expression of interest Nomination as NIEs United Nations/World Wank/ Other Partners

Accredited Entities Submission of Proposals to the GCF Official submission of CP

GCF On going Capacity Building/Country Program Development/Readiness

Country Program approval

3.1 Identification of country priorities for the GCF

The Country’s seventh plan is just being concluded and careful consideration has been given to mainstreaming climate change in the planning process. Ownership is instilled by giving the sectors to develop their own plans before consolidation. In terms of investment criteria, the NDA Committee criteria is select projects with high impact and are likely to have a high paradigm shift especially in areas of agriculture, livelihoods and early warning. The placement of the NDA in the National Planning Department which is also in charge of the SDG process has ensured sustainability in programs selected. GCF intervention has a number of advantages relative to other financiers. Firstly, not only is country ownership emphasized but it is practiced by having NDA’s issue letters of no objection. This has ensured that proposals are driven by stakeholders at country level. Another advantage is the GCF use of country systems to engage countries. In terms of financing, Zambia uses the four tools that are also used by the GCF; loans, guarantees, equity and grants. Financing is both domestic and international. The national press and national meeting engagement have been used extensively to invite the private sector to the table. With the accreditation of NIEs which include a privately driven bank was deliberately done to encourage private sector engagement.

These policies, strategies, programmes and projects are aligned with the Revised Sixth National Development Plan (RSDNP) and the Vision 2030 which promotes “A prosperous middle income country by 2030”, both of which support development of a low carbon and climate-resilient development pathway. The strategic focus of the plan include energy (mitigation), agriculture adaptation) and water (adaptation). The other sectors such as education, health (adaptation), skills development (crosscutting) and infrastructure development still remain key to Zambia’s development. In the energy sector, the solar and hydro power projects will have a paradigm shift and potential for replication as they will double Zambia’s power generation. The Batoka Gorge alone will be between 2000MW and 3000MW and the mini hydros are at 60MW combined. The other projects such as the Kalumbila development will revolutionalise the green-housing philosophy which will be demonstrated on an industrial scale to the Zambian construction sector, thereby triggering a potential building revolution that will be the required large-scale paradigm shift to changing Zambian construction standards. All the projects have a capacity building in the local industry which trigger knowledge and skills transfer through training programs and on-the-job training during the implementation.


Republic of Zambia


Table 4: Country projects/programmes pipelineProject 1 Project Title Description Accredited Entity Submission timeframe Strengthening Climate Resilience of Agricultural Livelihoods in Agro-ecological Zones I and II in Zambia

The project aims at (1) strengthening capacity of farmers to plan for climate risk (2) strengthening resilient agricultural production and diversification practices (for both food security and income generation), and (3) strengthening farmers’ access to markets and commercialization of resilient agricultural commodities.

UNDP March 2017



5, 6 GCF: $47.0m

Other: $1.7m

FP Received, First Review Completed.

Action Lead Timeline Strengthening the water component AE February 2017Second Review Session GCF Project 2 Project Title Description Accredited Entity Submission timeframe Zambia - Strengthening Hydro- meteorological and Climate Services

The project aims at (1) Enhanced climate and disaster resilience capacity through strengthening of hydromet services, end user services, early warning, knowledge and advisory services to link national systems with regional and global counterparts (2) Strengthen the National Meteorological and Hydrological Services (3) Enhanced resilience and climate adaptation capacity, improved delivery of weather, climate and hydrological services and weather-dependent sectors, including timely, reliable forecasts leading to increased climate and disaster resilience, through trans-boundary collaboration on drought, severe weather and flood warnings, leading to enhanced climate and disaster preparedness and readiness

World Bank



GCF: Other: Concept Received

Action Lead Timeline


Republic of Zambia

Project 3 Project Title Description Accredited Entity Submission timeframe Regional Liquidity Support Facility

The project aims at (1) Integrate the private sector in power production by encouraging Private Power Producers (PPPs) to partner with off takers like ZESCO, and (2) Facilitate a more sustainable financing approach by providing full cash collateral upon request of utilities and commercial banks

KfW



GCF: Other: Concept Received


Project 4Project Title Description Accredited Entity Submission timeframe An Adaptation Initiative for Bridging the Critical Power and Housing Deficit

The project aims at (1) delivery of climate friendly housing units and commercial buildings within Kalumbila township, northwestern Zambia, and (2) develop power generation comprising waste to energy for conversion to local landfill household refuse and solar for conversion of sunlight into electricity

None



GCF: $150m

Other: $15.75m

CN reviewed by NDA

Action Lead Timeline Assign AE NDA, GCF Project 5 Project Title Description Accredited Entity Submission timeframe Livingstone Urban Water Supply, Sanitation and Energy Efficiency

Increase access to safe, adequate and reliable water supply and sanitation to Livingstone town while generating energy (biogas) from sludge

None



1,3,4,5,6,7,8 GCF:$79m

Other:$9.87m

CN Reviewed by NDA



Republic of Zambia

Assign AE NDA, GCF Project Title Description Accredited Entity Submission timeframe Zambia Green Jobs Programme - Shift to low emission sustainable development pathways

The project aims at (1) Develop markets for sustainable buildings and affordable housing, renewable energy generation and access, water harvesting and small scale irrigation, and integrate waste management and recycling; (2) Facilitate policy research analysis and support for an enabling business environment; (3) Advance institutional strengthening and capacity development for the application of building standards, guidelines, codes and assessment tools (including rating systems for buildings, housing, technology and equipment); as well as the setup of a quality apprenticeship and technical vocational training system. (4) Bolster skills development, training and capacity building support for Small and Medium Enterprises to access finance and business development services they need and demand in order to grow and create jobs; as well as (5) Leverage transformative innovation, skills development and entrepreneurship with scalable demonstrations to foster public and commercial investments in sustainable buildings and affordable housing, renewable energy access and generation as well as integrated waste management

UNEP



1,3,5,6,7 GCF: $38.5m

Other: $1.5m

CN reviewed by NDA

Action Lead Timeline Develop FP AE Project Title Description Accredited Entity Submission timeframe Water, Food, Forestry and Jobs Programme

The project aims at (1) Strengthened government and civil society institutions for the implementation of policy, regulatory and legal framework for water, forestry and energy sectors (2) Increased carbon sinks, water and food security, more and better jobs and livelihoods (3) Enhanced energy security, SME development and job creation in rural communities

UNEP, FAO



1,4,5,6,8 GCF: $46.8m

Other: $3.2m

CN reviewed by NDA


Republic of Zambia

(4) Increased SME awareness on reuse, recycling and usage of none wasteful extraction processes

Action Lead Timeline Develop FP AEProject Title Description Accredited Entity Submission timeframe Zambia Mini Hydro Project

The project aims at developing five MiniHydro named (1) Kapamba Fall (2) Mumburuma Falls (3) Namundela Falls (4) Kalepela Falls and (5) Batoka. Their net head for the plants range from 16.2m–28m. Their designed discharge range from 8.82–59.2m3/s. They are designed to be run-off-river plants. The main works include development of weirs, diversion canals, intake forebays, penstocks, power houses, and switch yards.

None



1 GCF: Other: CN being developed

Action Lead Timeline Assign AE NDA, GCF

Table 5: Country Project Preparation pipeline Project Title Description Accredited Entity Submission

timeframe Livingstone Urban Water Supply, Sanitation and Energy Efficiency

UNDP



GCF: Other:

Action Lead Timeline CN Development to start AE

Table 6. Country Readiness programme pipeline Title Description Delivery Partner Submission timeframe

December 2017


Republic of Zambia

Readiness for NDA Strenghtening and Strategic Frameworks

The proposed activities are establishing and strengthening Zambia’s National Designated Authority, activity area 1, and reviewing strategic frameworks, including the preparations of the country programmes for national engagement with the Fund, building on existing strategies and plans, activity area 2. The National Designated Authority will hire experienced consultants with climate finance knowledge for advice and support in undertaking the following

1) Activity area 1: (a) Baseline survey on climate change issues: prepare a summary of all existing climate change projects and programmes, maintain an overview of adaptation and mitigation projects and programmes in the country, develop baseline knowledge so that resources from the Green Climate Fund are targeted at relevant projects and programmes in Zambia (b) National workshops: build the knowledge and capacity of the National Designated Authority staff to enable them assess projects and programmes for the Green Climate Fund to be in conformity with the country’s national priorities, strategies and plans, and with the country’s laws and regulations (c) Development of a website (d) Development of a monitoring, evaluation and reporting plan: monitor and evaluate in accordance with the Fund’s guidelines (e) Translation of key operational procedures, and (f) production of television and radio: develop and support the execution of a programme that will provide a platform to disseminate information about the Green Climate Fund and share experiences at national, provincial and district levels.

Total financing: Status $300,000 $60,000 disbursed,

Implementation stage


Republic of Zambia

2) Activity area 2: (a) Review of strategies on climate change, and (b) Development of a Country Programme.

These activities will be undertaken between 14th March 2016 and 31th December 2017 at USD300, 000

Action Lead Timeline Include the NAP result area to the readiness programme

NDA June 2017

Table 6. Country Readiness programme pipeline Title Description Delivery Partner Submission timeframe Readiness for NDA Strenghtening and Strategic Frameworks

The proposed activities are establishing and strengthening Zambia’s National Designated Authority, activity area 1, and reviewing strategic frameworks, including the preparations of the country programmes for national engagement with the Fund, building on existing strategies and plans, activity area 2. The National Designated Authority will hire experienced consultants with climate finance knowledge for advice and support in undertaking the following

1) Activity area 1: (a) Baseline survey on climate change issues: prepare a summary of all existing climate change projects and programmes, maintain an overview of adaptation and mitigation projects and programmes in the country, develop baseline knowledge so that resources from the Green Climate Fund are targeted at relevant projects and programmes in Zambia (b) National workshops: build the knowledge and capacity of the National Designated Authority staff to enable them assess projects and programmes for the Green Climate Fund to be in conformity with the country’s national priorities, strategies and plans, and with the country’s laws and regulations (c) Development of a website (d)

December 2017

Total financing: Status $300,000 $60,000 disbursed,

Implementation stage


Republic of Zambia

Development of a monitoring, evaluation and reporting plan: monitor and evaluate in accordance with the Fund’s guidelines (e) Translation of key operational procedures, and (f) production of television and radio: develop and support the execution of a programme that will provide a platform to disseminate information about the Green Climate Fund and share experiences at national, provincial and district levels.

2) Activity area 2: (a) Review of strategies on climate change, and (b) Development of a Country Programme.

These activities will be undertaken between 14th March 2016 and 31th December 2017 at USD300, 000

Action Lead Timeline Include the NAP result area to the readiness programme

NDA June 2017

Table 7. Accreditation pipeline Entity Name Type Action Lead Timeline Ministry of Finance

Government Start process of accreditation Ministry of Finance March

Development Bank of Zambia

Quasi- Government

Start process of accreditation Development Bank of Zambia

March

Zambia National Commercial Bank

Quasi- Government

Start process of accreditation Zambia National Commercial Bank

March

4. Monitoring and evaluation

To effectively monitor and evaluate the implementation of the National Policy on Climate Change, a comprehensive M&E framework will be developed. The framework will emphasize on regular progress monitoring and periodic in-depth


Republic of Zambia

evaluation to ensure that expected outputs, outcomes and impacts are achieved. The Ministry responsible for National Development Planning will provide overall oversight on Monitoring and Evaluation of Sectoral Plans and Programmes on climate change. The Ministry responsible for Environment and Natural Resources through the Department will facilitate the Monitoring and Evaluation of Climate Change implementation Plans and projects. The Policy will be reviewed periodically to take on board new and emerging issues related to climate change.

RREPUBLIC OF RWANDA

National Designated Authority (NDA)

For Green Climate Fund Engagement in Rwanda

Rwanda GCF Country Program and strategic framework

REMA, Rwanda National Designated Authority (NDA) for Green Climate Fund 2

Contents Contents .................................................................................................................................................. 2

Acronyms ................................................................................................................................................ 3

Abstract ................................................................................................................................................... 4

Introduction ............................................................................................................................................ 5

1. National sustainable development context and climate change response .................................... 5

1.1. National development circumstances and climate change responses ............................... 5

1.2. Snapshot of national initiatives under the UNFCCC ........................................................... 7

1.3. Key data on climate change ................................................................................................ 8

1.4. Summary of national priorities in the context of GCF result areas ...................................11

2. Strategic framework for stakeholder engagement ........................................................................12

2.1 Stakeholder engagement at readiness stage .....................................................................12

2.2 Stakeholder engagement in GCF delivery ..........................................................................13

3. Identification of Green Climate Fund priorities for Rwanda..........................................................15

3.1. Initial list of priority mitigation, adaptation, and crosscutting concepts ...........................15

3.2. Prioritization of initial concepts for GCF funding in the near, medium and long term ......16

3.3. Synthesis of national priorities and timeline for execution ...............................................21

4. Action Plan .....................................................................................................................................24

5. Monitoring and evaluation ............................................................................................................26

Annex 1 T Summary of national priorities in the context of GCF result areas ............................................ 28

Annex 2. Priority sectors and GCF investment criteria – consultation from first stakeholder workshop .............................................................................................................................................................. 32

Annex 3. Proposed management tool for GCF Projects/Programmes pipeline ....................................46

Annex 4. GCF results framework............................................................................................................47


Acronyms AE Accredited Entity CO2 Carbon dioxide CSOs Civil Society Organisations DP Development Partner EDPRS II Economic Development and Poverty Reduction Strategy II 2013T2018 FONERWA National Fund for Environment and Climate Change GCF Green Climate Fund GDP Gross Domestic Product GGCR Green Growth and Climate Resilience Strategy GHG Greenhouse Gases GoR Government of Rwanda INDC Intended Nationally Determined Contribution MINAFFET Ministère des Affaires Etrangères/Ministry of Foreign Affairs MINECOFIN Ministry of Economic Planning and Finance MINIRENA Ministry of Natural Resources NAMA Nationally Appropriate Mitigation Actions NAPA National Adaptation Program of Action NCT National Coordination Team NDA National Designated Authority NIE National Implementing Entity NCT National Coordination Team PMF Performance Measurement Framework PSF Private Sector Federation RDB Rwanda Development Board REMA Rwanda Environment Management Authority RENGOF Rwanda Environment NonTGovernment Organizations Forum RF Results Framework SNC Second National Communication TAP Technology Action Plans tCO2e/person Tonnes of CO2 equivalent per person TNA Technology Needs Assessment UNFCCC United National Framework Convention on Climate Change


Abstract

Strengthening of National Designated Authority to engage with Stakeholders and Developing a

country programme and strategic framework are the two areas of readiness support for national

engagement with the Green Climate Fund. The objective of this Country Program is to facilitate a

process of engaging stakeholders to identify practical steps that will enable the implementation of

priorities that can be supported by the GCF. This document presents Rwanda’s priorities regarding

green growth, climate change adaptation and mitigation as set out in various official documents,

analyses those priorities against GCF investment criteria and proposes a prioritized list of

short/medium term projects to be developed and submitted to the GCF, as well as an action plan

for the next few months.


Introduction This Country Program and strategic framework was developed as part of the Green Climate Fund (GCF) Readiness and Preparatory Support program. The key objective of the development of a Country Program is to facilitate a process of engaging stakeholders, and existing and prospective accredited entities to identify practical steps that will enable the implementation of priorities that can be supported by the GCF. This should assist in realizing a paradigm shift in the countries’ efforts to achieve low emission and climate resilient development

Therefore, the proposed Country Program sets out national priorities and work plans for engagement with the fund. The Program is building upon ongoing climate change and development strategies in Rwanda, and was developed in a participatory manner, engaging a wide range of stakeholders in workshops and face to face meetings. The development of the program was supervised by the GCF National Coordination Team (NCT) that has been put in place as part of the GCF readiness process.

1. National sustainable development context and climate change response 1.1.National development circumstances and climate change responses

1.1.1. Macro-economic circumstances Rwanda has seen significant economic development in recent years, with a Gross Domestic Product (GDP) growing at an average of over 8% annually over the last decade1. The population of the country amounts to 10,515,973 people2 and is growing at 2.8% per year, and per capita income has tripled from USD 211 in 2001 to USD 718 in 20143.

The services sector represents 45% of the GDP, followed by the agriculture (35%) and the industry sectors (14%). In terms of export revenue, 29% come from the exportation of minerals, 25% from tea and 19% from coffee. The figure below illustrates the share of GDP and export revenue per sector.

Figure 1: GDP (a) and Export Revenue (b) of Rwanda4

1 Government of Rwanda. EDPRS II 2013B2018 2 Fourth Population and Housing Census 2012 3 4th Integrated Household Living Conditions Survey (2013/14) 4 Source: Rwanda Development Board. Data is a mean of 2006T2009, and from 2009. Quoted in GGCR Strategy.


1.1.2. Development and economic strategies and key sectors/actors in the domestic context

In 2000, Rwanda developed its Vision 2020, revised in 2012, which sets out the objective to “transform our country into middle income nation in which Rwandans are healthier, educated and generally more prosperous. The Rwanda we seek is one that is united and competitive both regionally and globally”5. Vision 2020 is the Government leitmotiv and to achieve such development, Vision 2020 defines the 6 following pillars: (i) Good governance and a capable State; (ii) Human resource development and a knowledge based economy; (iii) A private sector lead economy; (iv) infrastructure development; (v) Productive and market oriented agriculture; and (vi) Regional and international economic integration.

In 2012, 26% of the original Vision 2020 goals were accomplished and 34% were on track for achievement; while 44.9% of Rwandans still lived below the poverty line. The revised 2012 version of the vision raised the GDP per capita target to USD 1,240 to place Rwanda amongst the lower middle income countries. It also increased the target to 70% for electricity access and highlighted the continuing need of improving agricultural productivity, human resources capacities and infrastructure development6.

While Vision 2020 is part of Rwanda’s overarching development strategy, the country also has a number of sectoral strategies, policies and plans that present a comprehensive vision and strategic framework for particular sectors. Such sectoral strategies take their overall orientation from nationwide planning documents and take into account all strategic, planning and budgeting issues that are relevant to each sector. Some of Rwanda’s key sectoral policies are presented in the table below.

Table i: Rwanda's key sectoral policies

Key Sector Strategy

Agriculture National Agriculture Policy Strategic Plan for the transformation of Agriculture (2013)

Energy

National Energy Policy (2014) Energy Sector Strategic Plan Draft Sustainable Energy for All (2015) Biomass Strategy

Transport Public Transport Policy (2012) Transport Sector Strategic Plan for EDPRS2

Water and Sanitation

National Policy & Strategy for Water Supply and Sanitation Services (2010) Water and sanitation sector strategic plan (2012/14T2017/18)

Forestry National Forest Policy (2010) Strategic Plan for the Forest Sector (2010)

Urbanization and Rural Settlement

Urbanisation and Rural Settlement Sector Strategic Plan (2012/13T17/18)

National Industrial Policy

National Industrial Policy and Private sector Development Strategy Tourism Policy Hides and Skins Policy

Environment and Natural Resources

Five Year Strategic Plan for the Environment and Natural Resources 2014T 2018

5 Government of Rwanda. 2012. Vision 2020. 6 Government of Rwanda. 2012. Vision 2020.


1.1.3. Poverty reduction strategy The Economic Development and Poverty Reduction Strategy II 2013T2018 (EDPRS II) is a 5 year strategy for economic growth, poverty reduction and human development for achieving the goals of the Vision 2020. EDPRS II focuses on the four following thematic areas: (i) Economic transformation, (ii) Rural development, (iii) Productivity and youth employment, and (iv) Accountable governance. For successful implementation, the strategy specifies that the costs are to be distributed between several social sectors, namely: education, health, water and sanitation. Additional focus areas include agriculture, transport, information and communication technology, energy, housing, urban development, land use management and environment protection. The strategy complements and supplements Vision 2020 by identifying specific priorities per thematic areas, and provides a monitoring and evaluation matrix for both primary and secondary indicators. In alignment with Vision 2020, EDPRS II identifies the environment and climate change as critical cross cutting issues for national development.

1.1.4. National climate change and green growth strategy Rwanda was one of the 9 first Least Developed Countries (LDC) to adopt a green growth strategy7. In 2011, Rwanda released its Green Growth and Climate Resilience Strategy (GGCR) which aims to strengthen the work being carried out in Rwanda, including through the long term strategic framework documents such as Vision 2020, EDPRS II, and various sectoral strategies. The GGCR includes the following Vision for 2050: “for Rwanda to be a developed climate resilient, low carbon economy by 2050”8. The GGCR is guided by the following principles, already stated in Vision 2020 and EDPRS: (i) Economic Growth and Poverty Reduction; (ii) Welfare and Wellness of all citizens in a growing population; (iii) Gender equality and equity; (iv) Sustainability of the Environment and Natural resources; and (v) Good Regional and Global Citizenship.

The vision for 2050 presented in the GGCR Strategy can be explained by three strategic objectives that are as follows:

1) To achieve energy security and a low carbon energy supply that supports the development of green industry and services and avoids deforestation;

2) To achieve sustainable land use and water resources management that results in food security, appropriate urban development and preservation of biodiversity and ecosystem services; and

3) To ensure social protection, improved health and disaster risk reduction that reduces vulnerability to climate change impacts.

The GGCR is one the key strategic framework documents to lead the country towards a sustainable and secure future, and prepare Rwanda to tackle the vulnerabilities and risks associated with climate change and its socio economic growth ambitions.

1.2.Snapshot of national initiatives under the UNFCCC

1.2.1. National Communication to the UNFCCC As Party to the United Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol, Rwanda submitted its Initial National Communication to the Convention in 2005, which considered 2002 as the year of reference. In 2012, the Second National Communication (SNC) was submitted, with 2005 as year of reference. Rwanda’s Third National Communication to the UNFCCC is currently

7 Global Carbon Atlas 2013 8 Republic of Rwanda. 2011. Green Growth and Climate Resilience Strategy


under preparation. The SNC proposes mitigation and adaptation options in all GCF’s 8 results area that are, for mitigation, (i) Energy generation and access; (ii) transport, (iii) building cities, industries and appliances, (iv) forest and land use; and for adaptation: (v) health, food and water security; (vi) livelihoods of people and communities; (vii) Infrastructure and built environment; and (viii) ecosystem and ecosystem services.

1.2.2. National Adaptation Programme of Action (NAPA) Rwanda submitted its NAPA in 2006. The programme proposes several adaptation priority options, in particular regarding agriculture, agro-meteorology and early warning systems, health infrastructures, water and forest management.

1.2.3. Technology Needs Assessment (TNA) and Technology Action Plans (TAP)

Rwanda completed its Technology Needs Assessment (TNA) in 2012. The TNA development process included institutional arrangements for TNA, extensive stakeholders' consultations, prioritization of sectors, barrier/market analysis and Technology Action Plans (TAP). The prioritized sectors in Rwanda's TNA are agriculture and energy.

1.2.4. Intended Nationally Determined Contributions (INDCs) Rwanda submitted its INDC to the UNFCCC in September 2015 and participated in the development of the climate change agreement. While Rwanda’s INDC sets climate change adaptation as a priority, its contribution includes both adaptation and mitigation options that present mutual benefits. The INDC is closely aligned and builds upon the GGCR Strategy.

1.2.5. Nationally Appropriate Mitigation Actions (NAMA) Rwanda starting the NAMA process by establishing an institutional, legal and policy framework for NAMA in May 2014. In 2015, the government produced an assessment report of sectoral opportunities for the development of NAMAs in Rwanda. This report identifies NAMA opportunities in the 7 following priority sectors: agriculture, buildings, energy, industry, Land Use, Land Use Change and Forestry (LULUCF), transport, and waste. For each sector, a “business as usual” (BAU) baseline emission scenario and potential Greenhouse Gases (GHG) mitigation alternative emission scenario were identified. These alternative scenarios would be applicable for NAMA design and could attract international support to implement selected NAMAs, contributing to the sustainable development goals of the country.

1.3.Key data on climate change

1.3.1. Sources of emissions According to the GGCR Strategy, using the baseline GHG emissions from 2005 used in the preparation of the SNC, Rwanda has one of the lowest emissions per capita, which is estimated at 0.4 tCO2e/person against a global average of 6.7 tCO2e/person. Because of forest sequestration, Rwanda remains a net carbon sink.

For 2005, the total emissions were estimated at 5,010Gg CO2 eq., mainly due to the agriculture and energy sectors. The GGCR identifies 4 key sources that contribute to 91% of all emissions:


agricultural soils (57%), enteric fermentation from domestic livestock (19%), fuel combustion for residential energy (8%), and road vehicles (5%). The figure below illustrates key sources of aggregated emissions of different GHG (a), and the CO2 inventory for 2005 (b).


Figure 2: Rwanda’s a) Key sources of GHG emissions sectors and b) Co2 inventory (in Gg) for 20059

The SNC recognizes uncertainties remains in the GHG inventory due to inadequate representation, lack of basic data and application of emissions factors for different conditions.

1.3.2. Key vulnerabilities Temperatures have increased by 1.4°C since 197010 in Rwanda, and could go up to 2.0°C by 2030, which could result in proliferation of diseases, crop decline and reduced land availability, impacting food security and export earnings. Average annual rainfall could also increase by 5 to 10% by 2030 compared to 197011, leading to higher frequency of floods and storms and resulting in landslides, crop losses, health risks, and damage to infrastructure.

Rwanda’s reliance on rain-fed agriculture for rural livelihoods and export (coffee and tea) make it highly vulnerable to climate change. In recent years, extreme weather events have increased in frequency and magnitude, which led to significant losses in some part of the country, including human lives12. While floods and landslides are increasing in the high altitude Western and Northern Provinces, droughts make severe damages in the Eastern Province13. As a result, and given that Rwanda has the highest population density in Africa14, adaptation concerns are a priority for the country.

1.3.3. Key sectors where activities are underway In order to better address its vulnerability to climate change, Rwanda has identified a number of adaptation and mitigation options in its GGCR strategy, which are also presented in the INDC. The key sectors where activities are planned or underway are as follows:

Adaptation: Agriculture, Forestry, Tourism, Water, Land Use, Disaster Management and climate data:

1. Restoring Yanze River and watershed through scaling up agroforestry technologies for resilience to climate change

2. Integrated project of Ecosystem rehabilitation and green village promotion 3. Mwogo watershed protection

9 Source: Government of Rwanda. 2011. GGCR. 10 Green Growth and Climate Resilience Strategy 2011 11 IPCC Fifth Assessment Report 2013 12 The assessment of economic impacts of the 2012 wet season flooding in Rwanda 2013 13 Rwanda baseline climate change vulnerability index 2015 14 World Bank Data 2015


4. Akanyaru watershed protection ProjectTGISAGARA 5. Karongi District integrated greening village program 6. Local partnership for rehabilitation of biodiversity and ecosystems in Nyabarongo

watershed 7. Congo Nile Ridge Foothills Integrated Environmental Management Project in Muhanga

District 8. Rainwater harvesting and reuse in Kamonyi District 9. Rainwater harvesting project in high density areas of Nyarugenge, Gasabo, Kicukiro,

Musanze, Nyabihu and Rubavu Districts 10. The Water_Energy_Food_Security Nexus in the Akagera Watershed: Linking evidence

collection, local action and stakeholder dialogue for sustainable development and climate change resilience

Mitigation: Energy, Transport, Industry, Waste and Forestry. 1. Sustainable Forest and Watershed Resources management in Nyagatare District 2. National e-waste management strategy for Rwanda to support the establishment of

sustainable recycling industries 3. Sustainable forestry, agro-forestry and biomass energy management for climate

resilience in Gatsibo District 4. Zero Carbon Affordable Housing for Rwanda 5. Clean and affordable electricity access for off-grid Rwanda communities using solar

powered micro-grid.

1.3.4. Current status of spending on climate change The costs of implementation of the GGCR strategy were originally estimated at USD 24.15 billion in the sector of water resource management, agriculture and energy up to 203015. When the INDC was submitted in September 2015, the costing of remaining sectors had not been done yet.

As mentioned in the GCF Readiness Inception report, Rwanda has taken initiatives in recent years to mobilize and manage international climate finance. Institutions have been established for that purpose, in particular MINIRENA (Ministry of Natural Resources), REMA (Rwanda Environment Management Authority), and FONERWA (National Fund for Environment and Climate Change). In addition, the policy and strategic framework has been prepared adequately.

Thus, Rwanda has managed to mobilize international climate finance. For instance, FONERWA has so far received a roughly USD 43 million since June 2013 for capitalization from Government of Rwanda, DFID and KFW; mobilized capacity building financing worth roughly 6million dollar equivalent from UNDP, GCF and CDKN and attracted funding estimated at USD 33 million equivalent leveraged co-financing for FONERWA supported projects. 90% of FONERWA basket is dedicated to programmes/projects from public sector, private sector, and NGOs that seek to implement environment and climate actions. FONERWA has also helped MINIRENA in proposals development for the Adaptation Fund amounting to approximately USD 10M, and has prepared a successful Expression of Interest to the Pilot Program for Climate Resilience, which has the potential for financing to a tune of USD 50M. FONERWA is also finalising a project document under the LDCF/GEF for an amount of USD 8.5M. It is worth noting that CDKN is working with FONERWA on its resource

15 Report on Costing of Green Growth and Climate Resilience Strategy, cited in Government of Rwanda.2015. INDC.


mobilisation strategy. Rwanda is also participating in the UNTREDD readiness programme with a readiness preparation proposal including key priority programmes in the forest sector.

As far as the GCF is concerned, Rwanda has attracted USD 0.3M under the GCF Readiness Program to build the capacities of the National Designated Authority and develop the country’s country program and strategic framework. Rwanda has also proposed to the GCF a first program for funding, for which the GCF has approved USD1.5M as a program preparation grant (thus being the first country in the world to access the GCF Project Preparation facility).

1.4.Summary of national priorities in the context of GCF result areas

An analysis of the main strategic documents relating to climate change and green growth in Rwanda was conducted along GCF result areas for mitigation (Energy generation and access; Transport; building, cities, industries and appliances; Forests and land use) and adaptation (Health, food and water security; Livelihoods of people and communities; Infrastructure and built environment; Ecosystems and ecosystem services). This is presented in Annex 1. The documents analysed include:

National Adaptation Program of Action (NAPA) (2006) Second National Communication to the UNFCCC (2012) Intended Nationally Determined Contribution (INDC) (2015) Green Growth and Climate Resilience – National Strategy for Climate Change and Low Carbon Development (2011) Technology Needs Assessment (TNA) and Technology Action Plans (TAP) (2012) East African Climate Change Policy Assessment of Sectorial Opportunities for the Development of Nationally Appropriate Mitigation Actions (NAMAs) in Rwanda (2015)

We can conclude from the analysis of the matrix in Annex I that the main priorities for climate finance funding by the GCF in Rwanda are the following:

M

itiga

tion

o Renewable Energy

o Energy efficiency

o Efficient transport

o Integrated waste management

o Forest management

Ad

apta

tion

o Integrated water resource management

o Disaster risk management, including meteorological capacities

o Sustainable agricultural Intensification

o Sustainable landTuse planning and management

o Climate proof infrastructure

Cros

sT

cutt

ing o Sustainable tourism development

o Housing/green cities


2. Strategic framework for stakeholder engagement

2.1Stakeholder engagement at readiness stage

The GCF Readiness programme aims at engaging a wide array of stakeholders in the definition of national priorities, the development of a pipeline of GCF programs/projects and the establishment of the necessary frameworks for Rwanda’s engagement into the GCF. Therefore, the Readiness process enabled the organisation of workshops, face-to-face meetings and other consultations with many national and sub-national institutions, covering many different sectors, from the public sector, private sector and civil society organisations.

As part of the GCF readiness programme, an initial stakeholder mapping was conducted to identify and classify the main institutions likely to demonstrate a specific interest in GCF activities in Rwanda. Public institutions, private companies, CSOs and development partners have been engaged in the process though different means, as well as the general public. The communication strategy implemented during the Readiness phase played an important role in organising stakeholder engagement. The roles and contributions of key stakeholders to the readiness process is summarized in Table 2.

Table 2. Roles and contributions of key stakeholders

How were they engaged iin the programme development process?

What have been their iinputs?

What are their eexpected roles in supporting implementation?

Line ministries and government agencies (including national development banks, central banks, and state owned enterprises)

Face to face meetings Workshops Coordination group

Inputs in prioritization of key sectors for future GCF funding Inputs and comments in the country program document

Will support development and implementation of GCF projects and programmes

Sub-national institutions, local government, and municipalities

Have been informed of the process.

Information meetings organised in each of the 4 provinces and Kigali city enabled to collect feedback from sub- national level stakeholders

Will support development and implementation of GCF projects and programmes at the local level.

Private sector (including financial institutions, micro, small, and medium enterprises, as well as established businesses and industries)

Face-to-face meetings Workshops Coordination group


Will propose projects/programmes and execute them through a chosen IE.


Civil society and community-based organisations

Face-to-face meetings Workshops Coordination group


Will propose projects/programmes and execute them through a chosen IE.

Accredited entities to the Fund active in the

MINIRENA is fully engaged in the GCF

Strong inputs in the design of the strategic

MINIRENA has got a project preparation grant


country readiness process Framework/procedures already from GCF and is active in designing projects for submission to the GCF

International organisations and development partners

Invited to workshops Kept informed through emailing and FONERWA/REMA websites

Technical support and resources mobilization. No specific input

May play a role as regional/global NIE for big (infrastructure) projects

2.2Stakeholder engagement in GCF delivery

Building on the stakeholder engagement process implemented during the readiness phase, a high level of engagement must remain during GCF delivery to ensure that GCF funds benefit to a variety of institutions from the public and private sector and civil society, from a variety of economic sectors (agriculture, water, urban development, energy, transport, etc.)

National Coordination Team (NCT) To assist the NDA in discharging its oversight function, a National Coordination Team (NCT) was established. The NCT is composed of:

1. Ministry of Finance and Economic Planning (MINECOFIN) 2. Private Sector Federation (PSF) 3. Ministry of Natural Resources (MINIRENA) 4. Rwanda Environment Non-Government Organization Forum (RENGOF) 5. Rwanda Environment Management Authority (REMA) 6. FONERWA

The NCT contributed to the establishment of a country programme for GCF funding and supported the development of this strategic framework. During GCF delivery, the NCT will:

(i) Technically assess proposed projects/programmes and propose recommendations for NDA consideration based on GCF six investment criteria and national project/programme selection criteria;

(ii) Advise NDA on project/programme compliance with GCF and national selection criteria

To do so, the NCT will pursue the following main objectives:

(i) Ensure the proposed project/programme compliance with national policies and programs; (ii) Ensure that local participation in the proposed project/programme is considered; (iii) Ensure that national priorities and country programme are respected in the

project/programme design; (iv) Ensure that relevant stakeholders are engaged.

According to the agreed terms of reference for the NCT, it shall hold two sessions in each calendar year (June and December), and specific sessions may also take place on an ad hoc basis at any time over the year.

Sector working groups The NDA secretariat in charge of GCF delivery shall make sure to present the status of GCF


programs/projects in Rwanda to relevant working groups such as:


Sector Working Group meeting of the national priority sectors;

Environment and Climate Change Thematic Working Group;

Management of REMA (NDA) Etc.

Yearly GCF stakeholder workshop In order to keep the main stakeholders at the same level of information on the GCF, it is proposed that the NDA organises a yearly stakeholder information workshop. Such workshop would be the opportunity:

T To present an update on the GCF itself, status of project funding globally and any developments/issues of interest to Rwanda;

T To present the status of GCF projects in Rwanda: projects funded, project proposed to the GCF for funding, national GCF projects pipeline, with an analysis of the main sectors covered and how in line with national priorities the situation is;

T To present an update of accredited entities in the country;

T To discuss any other issues regarding GCF processes in the country.

REMA newsletter and website REMA newsletter and website remain an important tool for information dissemination. Regular GCF news shall be posted on line and disseminated through the newsletter, in order to keep the GCF ‘alive’ in people’s mind and inform about any important issues, opportunities or events.


3. Identification of Green Climate Fund priorities for Rwanda 3.1. Initial list of priority mitigation, adaptation, and crosscutting concepts

As a first step, the list of priority sectors extracted from strategic documents (see section 1.4) has been confronted to the following six GCF investment criteria:

Impact potentialParadigm shift potentialSustainable development potentialCountry OwnershipEfficiency and EffectivenessNeeds of the Recipient

The exercise was first realised during a stakeholder workshop in May 2016, inviting participants to inform the tables in annex 2. In addition to familiarize stakeholders with GCF investment criteria, this has given them the opportunity to express their ideas on several priority sectors.

From this table, we can establish an initial list of concepts that can potentially meet the GCF investment criteria, as shown in Table 3.

Table 3. Concepts for potential GCF funding identified by stakeholders during workshop 1, May 2016 Mitigation Renewable Energy (hydro, methane, solar, geothermal)

Hydropower: Nyabarongo II multipurpose dam(Hydropower generation 128 MW, irrigation, drinking water supply)Access to off-grid solar (off grid electrification using Solar Home Systems (SHS) to serve 500,000 households.Current status 0.45 % while the target is 22% by 2018)Methane: Methane to Electricity power. Potential 350 MW, current status 31.6MWGeothermal explorationOne Acre Fund: Selling affordable solar lamps and home systems to replace the use of kerosene-burning lanterns

Energy efficiency (improved charcoal production; efficient cook stoves, light bulbs; New industrial technologies)

Improved charcoal productionPromotion of improved cook stovesLight bulbs: LED lightingPromotion of Liquefied Petroleum Gas (LPG) fuelGrid Electricity loss reduction

Efficient transport(Regulation of emissions, Promotion of public transport – BRT, efficientfreight)

Promotion of public transport Bus Rapid Transit

Waste management (Waste to Energy)

Biogas program (promotion of domestic and institutional biogas)Waste to energy at waste collection sitesIntegrated solid waste management in secondary cities

Forest management (Restoration and Afforestation, reforestation and agroforestry programs


protection of natural forests, afforestation, agroforestry)

One Acre Fund: Planting millions of new trees by distributing high-impact inputs and trainings

AdaptationIntegrated water resource Watershed sustainable Protection;


management Rainwater harvesting and storage;

Disaster risk management (agriculture, health and other sectors), including meteorological capacities

Crop insurance to help farmers to adapt to climate change;One Acre Fund: Providing farmers with a critical safety netof crop insurance against disruptive changes in climateImproved early warning system Reliable forecast, generation and easy access to weathers information;

Sustainable agricultural Intensification

One Acre Fund: Scaling up a proven suite of climate-smart approaches to improving farm yields and profits, including:

o Improved soil health: Enabling farmers to increase the long7term productivity of their soil through practices such as composting and products such as lime and biochar

o Crop diversification & intercropping: Training and supplying farm families with a robust mix of crop varieties, such as legumes, tubers, and diverse cereals, to improve resilience

o Optimized seed choice: Equipping farm families with optimal seed varieties based on local climates, while continuing to test and roll out new varieties as a response to changing climates

o Modern agricultural training: Delivering field7based trainings to each farmer on sustainable intensification techniques (such as fertilizer micro7dosing) throughout the season

Sustainable land-use planning and management

Climate resilient rural settlement programme to facilitate land consolidation

Climate proof infrastructure Promoting resilient infrastructure (roads, energy, watersupply)

Cross-cuttingSustainable tourism development(payment for ecosystem services, wildlife protection)

Strengthening law enforcement

Housing/green cities

Green neighbourhood (An integrated green neighbourhood)Supporting the Integration of Village greening Program

3.2.Prioritization of initial concepts for GCF funding in the near, medium and long term

Prioritization of initial concepts should be based on priorities for Rwanda on the one hand (translated into a list of “national approval conditions”), and GCF priorities on the other hand (strategic impacts and investment criteria):

National approval conditions consider the relevance of the proposed project/program versus the GGCRS and sector strategic plans, in particular the gaps16 that can be identified between the GGCRS priorities on the one hand and the projects/programs that have been/are being implemented in Rwanda. National approval conditions also consider stakeholder engagement.

16 The FONERWA portfolio analysis currently under finalisation identifies those gaps and constitutes an interesting guideline in this regard.


GCF strategic impacts and investment criteria are defined on the GCF website. They form the main selection criteria for the GCF when approving proposals for funding.

Finally, prioritization of initial concepts for GCF funding should reflect on the practical requirements for turning concepts into reality. Some projects may require less up front work and may be brought to the Fund for consideration in the relatively near term, while others may take substantial work and effort. Following GCF guidance17, the NDA and stakeholders should consider the questions below:

(i) Is there an accredited entity of the Fund who is already working to lead/develop the proposed project? Or would one need to be identified and possibly accredited? (ii) How clear is the understanding of the financing needs for the project? Have other similar projects/programs been supported in the country, and are there any relevant lessons? Will additional studies be needed to understanding financing needs/structures and execution arrangements? What other sources of finance might be accessed, and how? (iii) Who would be involved in the development of a project? When would they be able to engage in the program? (iv) If the project/program is the first of its kind in the given context, what factors might enable it to have traction in country, and are there any major implementation risks? (v) If the project/program is aimed at replicating or scaling up an established approach, what factors will be key to success, and are there major implementation risks? (vi) Are there policy or regulatory changes that might be required to realise the proposed program or intervention?

In this process, the development of a pipeline of projects based on standardised short concept notes responding to the different prioritization criteria would facilitate prioritization and monitoring of project proposal development. A project pipeline Excel file is proposed in Annex 3 as a management tool and a Project presentation and analysis form is proposed in Table 4 below. This table can be disseminated widely (e.g. as an onTline form), enabling any project proponent interested in GCF funding to send a concept proposal to the NDA. On this basis, the NDA can build the pipeline of programs/projects, rate the concept to prioritize most promising projects/programs, and use that rating as part of the noTobjection procedure (see rating guidelines below the table).

Table 4. Project analysis form for project/Program rating and noBobjection procedure

DATA SHEET Information provided

Project Promoter:

Type of entity:

Name of specific project: National priorities matched (multiple choice allowed):

GCF results area:

Foreseen accredited entity/NIE:

Project size category:

Project life span (years):

CoTfinancers:

17 Initial draft guidance for the development of Country Programmes, GCF


Other partners:

Brief description: Do you need support for project preparation? (Yes or No): National Approval Conditions

Info pprovided Rating Rating rule

Is the project/program proposal in line with GGCRS and relevant climate change policies in place?

A

Does the project/program proposal link with the concerned sector(s) strategic plan(s)?

A

To which of the following Rwanda GCF priorities is the project responding:

MITTRenewable Energy MITTEnergy efficiency MITTEfficient transport MITTWaste management MITTForest management ADAPTIntegrated water resource mgt ADAPTDisaster risk management ADAPTSustainable agricultural Intensification ADAPTSustainable landTuse planning and mgt ADAPTClimate proof infrastructure CCUTTSustainable tourism development

CCUTTHousing/green cities

B

Has the project/proposal been discussed during a stakeholder consultation process in order to make sure that the project promoter, beneficiaries, policy makers and regulator have the same understanding?

A

In case of regional/multiTcountry project/program, how much (in both US$ and %) will be invested in Rwanda?

A

TOTAL /15

Does the project/proposal achieve one or more GCF strategic impacts??

Mitigation: Energy generation and access; Transport; Forest and land use and buildingsT citiesTindustriesTappliances Adaptation: HealthTfood and water security; livelihoods of people and communities; ecosystems and ecosystem services, Infrastructure and built environment.

B

Does the project comply with GGCF Investment criteria??

Rating Rating rule

Impact potential: Is the project contributing to the Fund’s objectives to shift towards lowT emission and climateTresilient sustainable development?

C


Paradigm shift potential: To which degree the proposed project can catalyse impact beyond a oneToff project/program investment? How scalable and replicable is the project? How innovative and transformative is it?

C

Sustainable development potential: Will the proposed project/program deliver meaningful environmental, social, environmental and economic coTbenefits? Does the project have a gender sensitive development impact?

C

Country Ownership: Do beneficiaries have ownership of the proposed project/program? Do they have capacity to implement a funded project? How well does the project/program fits within the beneficiary country’s existing policies, climate strategies and institutions?

C

Efficiency and Effectiveness: Is the project reflecting value for money? Is the project financially and economically appropriate? For mitigationTspecific project, how costTeffective is the project? How much coTfinancing will it bring?

C

Needs of the Recipient: How is the proposed project/program tackling vulnerability and financial needs of Rwanda? To what extent vulnerable groups, barriers to financing and level of exposure to climate risks within Rwanda?

C

Total /9

Other questions to be considered

Rating Rating rule

Is the proposed project/ program the first of its kind in the country? Or is it aimed at scaling up or replicating an existing concept? Who else has developed and financed similar projects and programs? Are there any relevant lessons from previous experience?

D

Are there policy or regulatory changes that might be required to realize the proposed program or intervention? Would this project/program require preparatory or feasibility studies before full funding and implementation? What would be the possible sources of funding for such assessments Why is the GCF a relevant source of funding for this project/ program Describe any capacity constraints, and policy and regulatory impediments to project/program implementation Track record of project/programme proponent in implementing this type of project/programme, in Rwanda, for this level of


budget

What is a reasonable timing for submission to the GCF of a full proposal

E

Total /4

SUSTAINABLE DDEVELOPMENT CRITERIA

Economic Section Rating Rating

rule 1. How many local staff will be employed at what level of the project/programme management?

D 2. Will your project enable technology transfer? Which technology and How? 3. What are your local partners and how are they engaged in your project/programme?

4. How will local financial institutional be involved?

Social Section 1. All forms of discrimination are avoided based on project/programme intervention area context. Present local authorities signed statement.

D 2. Cultural heritage and local knowledge are not damaged but used where possible. 3. No child labor is happening under the project/programme implementation. Workers’ rights will be respected.

Environmental Section

1. Greenhouse gas emission are avoided

D

2. Environmental standards and regulations has been undertaken where applicable (e.g : EIA, Environment Audit, etc…) 3. No project/programme activity damages classified forests 4. Land use degradation

does not give chance to soil

5. Waste water is treated before is released if applicable

6. Conducted an EIA where necessary

Total /9

TOTAL MIN/MAX /37

If total score under 25 (less than 70% quality), pproposal/concept should be objected

Note Rating rule to apply A Rate 0T Not convincing

1T OK 2T Good 3T Excellent

B 0 item selected: rate 0 (exclusion of proposal) 1 item selected: rate 1 2 items selected: rate 2 More than 2 items selected: rate 3

C Rate 0T Not convincing


0.5T OK 1T Good

D Provide an average rating on the quality of those sections all together: Rate 0T Not convincing

1T OK 2T Good 3T Excellent

E >6 months: 0 3T6 months: 0.5 <3 months: 1

3.3.Synthesis of national priorities and timeline for execution

Consultation of stakeholders and meeting with NDA/FONERWA and NCT, has allowed to define 5 national prioritize in the short/medium for Rwanda on GCF funding. Other medium term and longer term priorities shall be defined as the pipeline of GCF projects builds up in the coming months.

To date, 6 (six) projects at different stages of development are in the pipeline:

Sustainable forestry, agroforestry management and access clean energy in rural Rwanda

Green City Pilot

Land Restoration and Conservation Project against Erosion and Floods Caused by Climate Change in Vulnerable Regions of Rwanda: First Large-Scale Smallholder Coffee Farm with Shade Tree Planting

Rural Green Economy and Climate Resilient Development Programme

Improving the Resilience of Vulnerable Communities around Protected National Forests and Parks in Rwanda to Climate Change

Mainstreaming Climate Smart Planning and Implementation into Agricultural Development

The table next page is an extract of the completed project pipeline Excel file that shows the details of the 5 priority projects for GCF funding in Rwanda.


Name of specific project

Implementation arrangements including accredited entities

Public/Private entity

Mitigation/ad aptation/cros scutting

GCF National priority(ies) (multiple selection possible)

GCF results area (multiple selection possible)

Ownership and paradigm shift potential, and the value that GCF funding will add

Project size category

Project life span (months)

Estimated implementation start date

Projected financing requirements (USD)

Funding from the GCF (e.g. instruments, possible levels/ volumes) (USD)

Other potential sources of funding (e.g. private, social, etc.) (USD)

Concept note/Project preparation support needed? Brief description (10 lines max)

Expected beneficiaries and impacts/ results

1

Sustainable forestry, agroforestry management and access clean energy in rural Rwanda

Accredited entity: MINIRENA Project will be executed by XXX

Public Cross$cutting

MIT$Energy efficiency MIT$Energy access and power generation GCF can play a crucial role in

helping Rwanda to overcome financial limitations and achieve its goal of climate resilience low carbon development. The program will serve as a trigger and powerful lessons for rural transformation by allowing the rural poor to participate in economic interventions that have the potential for scaling up to expand opportunities for inclusive green growth

60 01/01/2017 xx xx xx yes. Needs project preparation grant

Rwanda needs GCF support to transition to climate resilient and rural green economy using Biomass Energy innovation to wean rural house holds from over dependence on fuel wood use which has adaptation and mitigation benefits of immense implication to climate change management.

Communities of Eastern Province of Rwanda

MIT$Renewable Energy MIT$Buildings, cities, industries and appliances

MIT$Forest management MIT$Forestry and land use ADAP$Sustainable land$use planning and management

ADAP$Most vulnerable people and communities ADAP$Health and well$ being, and food and water security ADAP$Ecosystems and ecosystem services

2

Rural Green Economy and Climate Resilient Development Programme

Accredited entity: MINIRENA Executing Entity: FONERWA


MIT$Renewable Energy MIT$Energy access and power generation

The programme is proposed by Rwanda institutions and has a high potential to effectively scale up, replicate and sustain the results of the pilot interventions beyond programme completion due to its market$based approaches and use of existing climate financing infrastructure. There is high potential to shift Rwanda to LCCR development pathway but this will require a substantial investment of resources. A GCF contribution is therefore crucial to build on the progress Rwanda has made so far on green growth and take this programme forward, and to catalyze private sector investment to deliver financially sustainable

60 01/04/2016 88,191,381 69,484,181

FONREWA Acumen GGGI DFID Skat Consulting GIZ ICRAF Horizons

Project preparation grant of 1.5MUSD has been validated by the GCF. Feasibility studies going on.

The programme aims to pilot measures to increase the resilience of Gicumbi district to the expected impacts of climate change, establish small scale, low carbon, rural industries and create green jobs. The programme will focus on four key sectors that are critical to enabling Gicumbi to achieve its development targets and align with national green growth and climate resilient priorities: tea, forestry, construction and energy

Beneficiary: Communities and Civil Society, District Authorities, National Ministries, Private Sector The programme will enhance climate resilience among the rural poor and contribute to the Government’s strategic goal of unlocking sustainable rural growth to increase incomes and reduce poverty

MIT$Energy efficiency MIT$Buildings, cities, industries and appliances

MIT$Waste management MIT$Forestry and land use

MIT$Forest management ADAP$Most vulnerable people and communities

ADAP$Integrated water resource management

ADAP$Health and well$ being, and food and water security

ADAP$Sustainable land$use planning and management

ADAP$Infrastructure and built environment

ADAP$Climate proof infrastructure

ADAP$Ecosystems and ecosystem services

CCUT$Housing/green cities

3

Land Restoration and Conservation Project against Erosion and Floods Caused by Climate Change in Vulnerable Regions of Rwanda: First Large$Scale Smallholder Coffee Farm with Shade Tree Planting

Accredited entity: MINIRENA Executing Entity: Entity: The National Agricultural Export Development Board (NAEB) and AGRO Solution LTD. will operate the project in a PPP form.

Private Adaptation

ADAP$Sustainable agricultural Intensification

ADAP$Most vulnerable people and communities The project has a strong

demonstration effect, and will contribute to the adjustment and upgrading of local agricultural structure, build a coffee industry chain with ecological and environmentally beneficial agriculture, achieve transformation of traditional agriculture to modern agriculture, and reach itsoverall objectives

60 01/01/2017 16,961,454 12,863,564 Unclear

Concept note ok but unclear whether preparation grant is requested

The project is the first large$ scale smallholder coffee farm with shade tree planting in Rwanda. The project will plant 5,000,000 coffee trees on2000 Ha in 7 districts of3 provinces of Rwanda,

30 Organizations of coffee growers will sign agreements with the project sponsor, which covers 10,000 families. The direct beneficiaries total almost 120,000, with 12, 000 new jobs created.The indirect beneficiaries are almost 2,000,000


ADAP$Health and well$ being, and food and water security ADAP$Ecosystems and ecosystem services


4

Improving the Resilience of Vulnerable Communities around Protected National Forests and Parks in Rwanda to Climate Change

Accredited entity: MINIRENA Executing Entity: Rwanda Development Board


MIT$Forest management MIT$Forestry and land use

The project objectives are in line with the Rwanda’s priorities for low$emission and climate resilient development, including the following national policies, strategies and programmes The successful implementation of this project will enable the replication of the business models

48 01/01/2017 26,000,000 24,000,000 RDB: 2,000,000

Concept note ok but unclear whether preparation grant is requested

The project seeks to increase the resilience of vulnerable communities in districts surrounding protected forests and parks of Rwanda and reduce greenhouse gas (GHG) emissions through the following project components: (1) agroforestry; (2) ecotourism; (3)innovative water harvesting techniques; (4) climate information system; (5) building sustainable community enterprises (6) capacity building; (7) mainstreaming climate change into district plans and budgets; (8) undertake research on impact of climate change; and (9) development of a communication strategy.

Vulnerable communities surrounding protected forests and Parks in Rwanda


ADAP$Most vulnerable people and communities

ADAP$Disaster risk management





CCUT$Sustainable tourism development

5 Green City Pilot unclear Public Cross$cutting

MIT$Renewable Energy MIT$Energy access and power generation

The linkage between Green City Pilot and Secondary Cities development in the EDPRS II are deliberately designed to inform the future trends for Rwanda’s urbanization and therefore present vast opportunities for expansion and scale up. Rwanda needs GCF support to transition to climate resilient and green urbanization through support to Green City Pilot that will be the building block for national scale up poised to inspire regional expansion and point the way to the future of urbanization

60? ? ? ? ?

Concept note to be developed Project preparation funding is sought

The specific objective of GoR to promote urbanization for the future through Climate Resilient Green Cities, which includes: • Designing and implementing low carbon and climate resilient strategic and technical action plans for Green City Development: • Developing a Capacity Building Program and Investment Strategy for Green Urbanization, • Facilitating knowledge sharing programs in order to enhance local capacity related to urbanization process. • Developing a pipeline of bankable projects based on infrastructure investment strategies for the PGC.

• The program will have a significant reduction in tones of CO2 • The program will provide economic and other house hold employment and income opportunities as a critical input towards inclusive growth • The program will have social benefits and impacts such as avoided property destruction and death from flooding which currently is prevalent in most urban areas in Rwanda.

MIT$Energy efficiency MIT$Buildings, cities, industries and appliances

MIT$Waste management MIT$Forestry and land use

MIT$Efficient transport ADAP$Most vulnerable people and communities



ADAP$Climate proof infrastructure


CCUT$Housing/green cities

6

Mainstreaming Climate Smart Planning and Implementation into Agricultural Development

NIE: MINIRENA Executing entity: MINAGRI

Private Cross$cutting

MIT$Forest management MIT$Forestry and land use The use of a mainstreaming approach maximizes the potential for scale$up, by moving away from stand$ alone activities and instead integrating climate smart activities into (agricultural) development itself. This ensures that climate resilient, low carbon activities flow through all sector policy and strategy, and then cascades down to all levels, delivering a paradigm shift.

60 June 2017 30,000,000 30,000,000 $ ?

Project will focus on integrating climate change mitigation and adaptation into the next Strategic Plan for the Transformation of Agriculture (PSTA$4), a medium$term agriculture sector development plan, using the GCF finance to make incremental investments to deliver this integration.

MINAGRI and indirectly, small$ scale farmers accross the country


ADAP$Most vulnerable people and communities



MIT$Forest management ADAP$Ecosystems and ecosystem services

In red is the information that needs to be confirmed to complete the table.


4. Action Plan Table 5. Action Plan

Issues to consider Concrete actions necessary to realise the priorities identified

Summary of key actors NDA: REMA MINIRENA FONERWA MINECOFIN Stakeholders through NCT

Resources for building the capacities of these key actors will need to be identified, so they are sufficiently acquainted to play their role fully.

Summary of the priority iinvestment opportunities

6 projects are currently in the pipeline. Others should complete the list for medium/long term funding

Project/Programme ppreparation support

Financial support to project preparation will be needed for most projects. Project promoters should first prepare and submit (thought the chosen Accredited Entity) their concept note where specific support will be requested. Specific capacity building will be needed in order to make sure project promoters understand the needs and requirements of a GCF project proposal. Resources will need to be identified in this respect.

Policy, regulatory and iinstitutional capacity challenges

The main challenge to date is the institutional capacity of REMA, the NDA, whose teams are generally too busy to handle GCF country program implementation in good conditions.

This challenge could be overcome with the contracting of a technical adviser to support the GCF engagement beyond the Readiness Support Program. A fee could also be requested by the NDA for every project requesting noRobjection for covering NCT meetings costs.

Monitoring and Evaluation ccapacity

REMA, as NDA, has experience in monitoring and evaluating its programs and projects. As detailed in the section below, it will develop a Performance Management Framework in order to monitor the Country Program implementation, and by extension the GCF interventions as a whole for the next 5 to 10 years. Support from an external expert should be considered in the next few months.

Accreditation To date, only MINIRENA is accredited as an NIE. Beside international organisations accredited by the GCF and active in Rwanda, Rwanda may need an Enhanced Direct Access and a private sector NIE for lending and blending with GCF funds.

Readiness Needs As a result of the technical assistance provided, the country is mostly ready to propose, manage and implement GCF funding. Most important now is

(i) to support project promoters from prioritized


projects/programs in developing their full proposal and get GCF funding, working in close proximity with project promoters;

(ii) to develop further the pipeline of projects/Programs by disseminating the proposed Project presentation and analysis form;

(iii) to ensure regular meetings of the NCT and with a wider group of stakeholders as proposed in the Stakeholder engagement section of this Country Program.

(iv) Further, an online platform for submitting request for noR objection letter with the required supporting documents to the NDA could be developed

Risks The main risk stands in the funding of GCF engagement activities when Readiness Support ends. Additional readiness support may be requested to the GCF in this respect.

Another risk may be coming from international organisations proposing to involve Rwanda in multiRcountry projects/programs to be funded by the GCF. Whereas such projects/programs may constitute an opportunity for the country, the Government of Rwanda has very little control on what they will actually do once funding has been released by the GCF. Hence the need to look at those project proposals very closely before releasing a noRobjection letter. In this respect, specific procedures have been developed in the Letter of No? objection Procedures. In order to keep control on this, the NDA may want to have a discussion or meeting with the GCF to address the issue.


5. Monitoring and evaluation As presented in the Initial draft guidance for the development of Country Programmes, the country programme is a living strategy that will need to be adapted and updated to reflect new developments, implementation progress, or challenges that may manifest. Monitoring the programme’s advancement shall consider the following questions:

Table 6. Questions to consider for the M&E framework

Theme Questions to consider Stakeholders’ engagement in developing projects and initiatives

Level of engagement of accredited entities

Level of progress in each programming area

Need for action (consider other results areas? Adapt implementation arrangements?)

Country programme adaptation and updates

GCF new developments impacting the country program

Changes in national context impacting the country program

Role of stakeholders in monitoring and updating the country programme

Actions and responsibilities to be reflected in the country programme

Progress reports Need for regular monitoring/progress reports on GCF engagement in Rwanda

Monitoring the implementation of Rwanda’s GCF Country programme, and by extension monitoring Rwanda’s engagement into the GCF, requires clearly established objectives, outcomes and outputs to be then monitored against several indicators. Expected results are defined with a Results Framework (RF) and then a Performance monitoring framework (PMF) will need to be developed to describe the indicators to be used, set targets, responsible bodies for informing the indicator, and timeline.

The GCF is a major climate financeRfunding source that has been identified in Rwanda’s National Strategy for Climate Change and Low Carbon Development (GGCR) in October 2011 as an important future contributor to the implementation of green growth programs. Proposing a GCF Results Framework for Rwanda defining the main objective, outcomes and outputs expected from engagement with the GCF, can also help structure the approach to GCF funding. Driven by the overall GCF results framework18 (see Annex 4), a draft Results Framework (RF) for Rwanda’s engagement with the GCF could be as follows:


18 Initial Results Management Framework of the Fund (Progress Report), GCF/B.06/04, 9 February 2014; Further Development of the Initial Results Management Framework, GCF/B.08/07, 06 October 2014


Table 7. Rwanda’s GCF Results Framework

Rwanda’s objective with the GCF:

Implement and achieve vision 2020, EDPRS19 and GGCR to transform Rwanda into a middle income green economy

Desired outcomes of engagement with GCF: Proposed outputs

Outcome 1:

Rwanda achieves a paradigm shift to lowRemission sustainable development pathways in most emitting sectors as per INDC

Major structuring green growth programs are implemented

Institutional and regulatory systems for lowRemission planning and development are developed

Number of small, medium and large lowR emission power suppliers increased

Lower energy intensity of buildings, cities, industries, and appliances

Use of lowRcarbon transport enhanced

Management of land or forest areas contributing to emissions reductions improved

Outcome 2:

Rwanda achieves a paradigm shift to ClimateR resilient sustainable development in most vulnerable sectors, as per INDC

Institutional and regulatory systems for climateRresponsive planning and development strengthened

Generation and use of climate information in decisionRmaking increased

Adaptive capacity increased and exposure to climate risks reduced in all sectors of the economy

Awareness of climate threats and riskR reduction processes strengthened

On this basis, the NDA will prepare a Performance Management framework allowing due monitoring of GCF implementation in Rwanda. Assistance from a specialised consultant may be considered.

19 EDPRSII and subsequent EDPRS


Annex 1 - Summary of national priorities in the context of GCF result areas

GREEN CLIMATE FUND RESULTS AREAS

Priorities Identified

in National Strategies

Mitigation Adaptation

Energy generation and

access Transport

Buildings, cities,

industries, and appliances

Forests and land use

Health, food and water security

Livelihoods of people and

communities

Infrastructure and built

environment

Ecosystems and ecosystem services

NAPA (2006)

Agriculture and animal husbandry Hydro agro meteorological early warning system

Income generating activities Agriculture

Alternative energy sources to firewood Integrated water resources management (IWRM)


2nd

National Communica tion

Alternative energy (HH, transport); improve EE (hydro, methane, improved charcoal production)

Transport (Regulatio n of emissions, Promotion of public transport)

Appliances (light bulbs) Energy source and consumpti on (use of Lake Kivu methane gas) New industrial technologi es

Improved stoves and furnaces Restoration and protection of natural forests Alternative energy sources Afforestation (bamboo & tree plantations), agroforestry

Strengthening a friendly political, legislative and institutional framework in the management and protection of water resources Sustainable management of water resources Establishing an emergency plan to the fight against drought Health (health insurance, meteo

Agriculture Agro meteorology

Health infrastructu re

Water Forest management


warning) Ref to MDG 1: Eradicate extreme poverty and hunger (in EDPRS)

INDC (2015) Low carbon energy mix (hydro+sola r) Sustainable Small Scale energy installation Energy efficiency and demand side manageme nt

Efficient resilient transport system

Green industry and private sector developm ent (EE) Waste: Implemen tation of Low carbon urban systems

Sustainable Forestry, Agro forestry and Biomass Energy

Disaster Risk Management Climate data and projections

Sustainable intensification of agriculture Agricultural diversity in local and export markets Integrated approach to Sustainable Land Use Planning and Management

Forestry: Sustainable Forestry, Agroforestry and Biomass Energy Tourism: Ecotourism, Conservation and Payment for Ecosystem Services Promotion in Protected Areas Integrated Water Resource Management and Planning

Green Growth and Climate Resilience – National Strategy for Climate Change and Low Carbon Developme nt (2011)

Programme of action:

Low carbon energy mix powering the national grid Sustainable SmallUscale Energy Installations in Rural Areas

Big wins: Geothermal power


Efficient resilient transport system


Green Industry and Private Sector Developm ent Climate compatibl e mining Low carbon urban systems


Sustainable Forestry, Agroforestry and Biomass Energy

Big wins Integrated soil fertility management


Disaster Management and Disease Prevention Climate Data and Projections

Big wins Centre for Climate Knowledge for Development


Sustainable Intensification of small scale farming

Agricultural diversity in local and exports markets

Big wins Agroforestry

Big wins Irrigation infrastructu re Robust Road network

Programme of action: Integrated water resources management and planning Integrated approach to sustainable land use planning and management Ecotourism, Conservation and Payment for Ecosystem Services Promotion in Protected Areas


generation Big wins High density walkable cities

TNA & TAP (2012)

Technology for CC mitigation in the energy sector

Technology for CCA in the agriculture sector

Assessmen t of Sectoral Opportuniti es for the Developme nt of Nationally Appropriat e Mitigation Actions (NAMAs) in Rwanda (2015)

OnUgrid renewables (large hydro + solar PV) OffUgrid renewables (solar PV mini grid)

Efficient Integrated Freight Transport System (EIFTS) Bus Rapid Transit System for Kigali

Waste (landfill gas utilisation + waste to energy) Energy for household s Green Cities Integrated Sustainabl e Rural Developm ent Energy Efficiency in Tea/Coffe e productio n Green/Eco Industrial Park

Improved management of Forests New Forest plantation Sustainable charcoal value chain Scaled up one cow per poor family program Improved fertilizer sector

East African Climate

Availability and accessibility

Reduced GHG transport:

Waste managem ent.

Forestry global services in mitigation

Agriculture and Food Security (Crop,

Land Use and Soil Protection Tourism

Climate proof infrastructu

Water Resources (improve water conservation,


Change Policy

of sustainable energy

Sustainable agricultural practices, SLM

Livestock and Fisheries) Human Health Human settlements Disaster risk management

resilience Renewable energy

re efficiency) Wildlife (ecosystemUbased adaptation) Coastal and Marine Ecosystems Sustainable management of forestry and wetlands


Annex 2. Priority sectors and GCF investment criteria – consultation from first stakeholder workshop

National Priorities

Green Climate Fund Investment Criteria

Name and detail specific program/project, if any

Impact potential Paradigm shift potential

Sustainable development potential

Country Ownership

Efficiency and Effectiveness

Needs of the Recipient

Ord er of Prio rity

Potential of the programme/proje ct to contribute to the achievement of the Fund’s objectives and result areas

Degree to which the proposed activity can catalyse impact beyond a onePoff project or programme investment

Wider benefits and priorities

Beneficiary country ownership of and capacity to implement a funded project or programme (policies, climate strategies and institutions)

Economic and, if appropriate, financial soundness of the programme/projec t

Vulnerability and financing needs of the beneficiary country and population

M I

Renewable Energy (hydro, methane, solar, geothermal)

Hydropower: Nyabarongo II multipurpose dam

4Hydropower generation 128 MW

4Reduced emissions through increased low4 emission energy access and power generation

U Increased number of small, medium and large low4emission power suppliers

Accelerates economic growth

U Energy security (sufficient, affordable, reliable)

U Industrial sustainable development

Job creation

4 Supply clean potable water to downstream urban areas of Kigali and Bugesera

4Vision 2020 4EDPRS II 4Green Growth and Climate Resilience Strategy, 4Nationally Determined Contributions 4 Energy Strategic Plan, 4Energy policy,

4Use of contractors through competitive bidding, 4Best use of inputs (human resources, funds, equipment and materials)

+Vulnerability: Rwanda relies on imported fuels; it needs to phase out thermal power generation. 4 Limited financial capacity

1


U Irrigation of agricultural land and Prevention of floods and supply of a


constant flow of water along the river bed

Solar: •Access to off4grid solar energy (off grid electrification using Solar Home Systems (SHS) to serve 500,000 households)

•current status 0.45 % while the target is 22% by 2018



Rapid Rural development and Accelerates economic growth


U Industrial sustainable development

U Job creation

4Vision 2020 4EDPRS II 4Green Growth and Climate Resilience Strategy, 4Nationally Determined Contributions 4 Energy Strategic Plan, 4Energy policy, 4Off4grid Strategy



Methane: Methane gas to power. •Potential 350 MW, • current status 31.6MW




4Energy security (sufficient, affordable, reliable) 4Industrial development 4Job creation

Vision 2020 4EDPRS II 4Green Growth and Climate Resilience Strategy, 4Nationally Determined Contributions 4 Energy Strategic Plan, 4Energy policy,



Geothermal exploration 4Reduced emissions through increased low4 emission energy access and power generation




U Industrial development

4Job creation

Vision 2020 4EDPRS II 4Green Growth and Climate Resilience Strategy, 4Nationally Determined Contributions 4 Energy Strategic Plan, 4Energy policy




Overall program name: Building Africa’s largest climate4smart smallholder farmer network (One Acre Fund)

Relevant initiative: Selling affordable solar lamps and home systems to replace the use of keroseneUburning lanterns

Solar products reduce costs for families while preventing carbon emissions, primarily by reducing usage of kerosene.

We expect to sell 750,000 solar lamps and home systems in Rwanda between 2017U2022, which will cumulatively mitigate 170,000 total tons of CO2 while generating $23 million in new income through cost savings or new profits [e.g. by charging neighbours to use solar lamps’ phoneU charging capability].

MarketUbuilding: Our clients form a critical mass of customers in rural East Africa. Our scaled interventions can stimulate both supply and demand, driving the private sector to create new farmerUfocused solutions that also benefit largeUscale smallholder populations. We have already done this with solar tech, and are currently among the top 5 largest solar distributors by volume in Africa.

Knowledge creation & dissemination: We are continuously fieldUtesting new solar products and configurations, as well as conducting rigorous M&E on the impact of current products, creating a unique knowledge base of rural solar applicability that we disseminate widely.

SolarUspecific: These 750,000 solar products will generate over 25m new evening study hours per year for schoolU age children in client families. They will also enable hundreds of thousands of families to improve household air quality by decreasing kerosene usage by up to 100%.

General contribution to program outcomes: The new income our clients generate through solar products enables them to fill their food deficit, and invest remaining profits productively – on average they spend 33% on childhood education and 31% on new business activities, for example, enabling many additional economic and social benefits. SolarU enabled reductions carbon emissions also lead to many additional environmental benefits.

One Acre Fund has a very strong relationship the Rwandan government, evident through our successful largeUscale collaborations with the Ministry of Agriculture and the Rwanda Agriculture Board – such as our partnership to improve the curricula and training materials of its nationwide extension network.

As part of this relationship, we are working to ensure clear alignment between our climateUsmart interventions and national climate priorities, especially Rwanda’s overall goal of a “developed, climateUresilient, lowUcarbon economy by 2050” (per RW’s 2011 Green Growth & Climate Resilience Strategy).

The primary goal of this program is to massively increase the scale and impact of One Acre Fund’s existing climateU smart model. We already have extensive infrastructure in Rwanda, built through nine years of operations, and have achieved a high degree of costUefficiency: in 2015, 70% of field costs were covered by farmer loan repayments, requiring outside subsidization of only 30% for our core operations.

In our entire proposal to GCF, including all related costs and revenues in Rwanda and other One Acre Fund countries of operation, we estimate an average cost of $8.09 per ton of carbon emissions mitigated.

The target beneficiaries of this proposal – smallholder farmers – represent a large and extremely vulnerable population affected by climate change. Living in rural areas, their level of access to infrastructure and markets is very low; they require climateUfocused products and services that no other actors are supplying at scale. Their dual barriers of physical isolation and market access have caused a market gap of distribution – proven climate interventions exist, and are in demand, but remain out of reach to rural farmers.

One Acre Fund fills this gap by ensuring that every element of our climateUsmart model, including solar products, is fully accessible through delivery, financing, and comprehensive


trainings.

Energy efficiency (improved charcoal production; efficient cook stoves, light bulbs; New industrial technologies)

U Light bulbs: LED lighting project

U Grid Electricity loss reduction project

U Promotion of Improved cook stoves

U Promotion of Liquefied Petroleum Gas (LPG) fuel



Rapid Rural development and Accelerates economic growth



4Job creation

Vision 2020 4EDPRS II 4Green Growth and Climate Resilience Strategy, 4Nationally Determined Contributions, 4Energy Strategic Plan, 4Energy policy

4Use of local contractors through competitive bidding, 4Best use of inputs (human resources, funds, equipment and materials)


2

Reduced emissions from land use, deforestation, forest degradation, and through sustainable forest management and conservation and enhancement of forest carbon stocks


Overall program name: Building Africa’s largest climate4smart smallholder farmer network (One Acre Fund)

Relevant initiative: Selling affordable cook stoves that require far less firewood than traditional stoves

Improved cook stoves reduce family expenses while preventing carbon emissions, by producing more heat with less wood fuel.

We expect to sell 200,000 cook stoves in Rwanda between 2017 and 2022, which will cumulatively mitigate over 1m total tons of CO2 while generating $9.5 million in new income through cost savings.

MarketUbuilding: See above. Note that our stove program is much younger than our solar program, and we are still scaling up distribution, but we intend to become one of Africa’s largest distributors of improved cook stoves to rural areas over the next 6U10 years.

Knowledge creation & dissemination: See above. We take this same approach in all core product areas.

StoveUspecific: These stove sales will enable 200,000 families to improve household air quality by decreasing wood fuel usage by up to 50%.

General contribution to program outcomes: See above. Cook stove impacts also contribute to larger economic, social, and environmental benefits for our clients.

See above See above See above

Efficient transport (Regulation of emissions, Promotion of public transport – BRT, efficient freight)

Promotion of public transport Bus Rapid Transit

4

Waste management (Waste to Energy)

U Biogas program: Promotion of Domestic Biogas Promotion of Institutional Biogas

U Waste to energy at waste collection sites

4Reduced emissions from land use, deforestation, forest degradation, and through sustainable forest management and conservation and enhancement of forest carbon stocks

Accelerates rural development and economic growth



4Job creation

Vision 2020 4EDPRS II 4Green Growth and Climate Resilience Strategy, 4Nationally Determined Contributions 4 Energy Strategic Plan, 4Energy policy,

4Use of local contractors through competitive bidding, 4Best use of inputs (human resources, funds, equipment and materials)


3


4Reduced emissions through increased low4 emission energy access

INTEGRATED SOLID WASTE MANAGEMENT IN SECONDARY CITIES

Promotion of public health through reduction of disease vectors

Beyond the set objectives, the project will help in improving the

The project is based on demand driven, participatory and cost sharing

The country ownership is exhibited through the policies and

The project has outputs and their output indicators which will be

Revenues, skills and selfWesteem of women and vulnerable men

and proper solid lifestyle of the approaches of the strategies that monitored. The involved in preW waste community project by have been logical framework collection activities, management economically beneficiaries and developed with the has already been collection, practices that are through revenue therefore the purpose of elaborated and transportation, environmentally collections, sustainability protecting should be a guiding composting and friendly and The produced The institutional environment and tool to deliver land filling of solid protect the health compost will be arrangement is economic outputs. It is for waste is improved of people. used to enrich the also set in a way to development of the this reasons the Sensitize and train soil with the optimize the people such as: project will be the local required nutrients involvement of Strategy for managed by population on which will promote decentralized Climate change Rwanda Housing matters regarding the agriculture thus entities, which is and law carbon Authority Staff and the urban providing food also a factor of Development,Econ in addition of a few environmental security to the ownership and omic Development to be hired to protection and community capacity building and Poverty follow up day to public health for the Development day project issues sustainability Strategy (EDPRS 2) activities. M&E

The project is plan should be expected to be implemented and accepted by to provide beneficiaries due to quarterly reports of a number of progress activities positive environmental and health benefits through proper solid waste management practices such proper waste collection and


transportation, proper disposal, which will help in controlling odours, disease vectors among others, The project will also contribute to economic empowerment through revenue collections, compost production which will be solid and also help in improving agriculture activities, With respect to gender equality the project will impact on socio economic improvements through creation of jobs and this will ensure the sustainability of the project

Forest management (Restoration and protection of natural forests, afforestation, agroforestry)

Afforestation, reforestation and agroforestry programs

3

Overall program name: Building Africa’s largest climate4smart smallholder farmer network (one4acre fund)

Relevant initiative: Planting millions of new trees by distributing highUimpact

Planting trees generates physical assets while sequestering carbon and

MarketUbuilding: See above. HighU quality, fastU growing tree seeds and seedlings are not

These 6.5m trees would yield the many environmental and social benefits that accompany

See above See above See above


inputs and trainings improving soil health; trees also contribute to soil health, particularly by preventing erosion and desertification.

We expect to enable our clients to plant 6.5m Grevillea trees in RW between 2017 and 2022, which will cumulatively mitigate 100,000 total tons of CO2 while generating $30 million in new income.

widely available in the rural areas we serve; we see this as a significant opportunity to help create a new market for a financially and environmentally impactful product.

Knowledge creation & dissemination: See above. We take this same approach in all core product areas.

the halt of deforestation and the commencement of reforestation.

General contribution to program outcomes: See above. Agroforestry impacts also contribute to larger economic, social, and environmental benefits for our clients.

ADAP

TATI

ON

Integrated water resource management

Watershed sustainable Protection ; Rainwater harvesting and storage;

Disaster risk management (agriculture, health and other sectors), including meteorological capacities

Crop insurance to help farmers to adapt to climate change; Improved early warning system Reliable forecast, generation and easy access to weathers information;

Overall program name: Building Africa’s largest climate4smart smallholder farmer network (One Acre4Fund)

Relevant initiative: Providing farmers with a critical safety net of crop insurance against disruptive changes in climate

Crop insurance ensures cash payouts to farmers in the event of poor weather or crop disease. One Acre Fund acts as a trusted intermediary, establishing group policies on behalf of clients

Our clients form a critical mass of customers in rural East Africa. Our scaled interventions can stimulate both supply and demand, driving the private sector to create new farmerUfocused solutions that also

InsuranceU specific: One Acre Fund’s crop insurance product protects clients against massive loss. With this safety net, clients are more able to think, act, and invest proactively to prepare for their future, rather

One Acre Fund has a very strong relationship the Rwandan government, evident through our successful largeUscale collaborations with the Ministry of Agriculture and the Rwanda Agriculture Board,

The primary goal of this overall program is to massively increase the scale and impact of One Acre Fund’s existing climateU smart model. We already have extensive infrastructure in Rwanda, built

One Acre Fund’s clients are entirely reliant on the environment for their livelihood, as each season’s harvest determines how much food and income they will have in the following year. Yet their crop yields


that pay out when rainfall or yields fall outside historical norms, and then administering these funds to farmers based on our detailed field data.

By 2022, we expect to cover more than 400,000 Rwandan farm families (encompassing over 2m total family members) each year through crop insurance.

benefit largeUscale smallholder populations.

Crop insurance represents a successful case study of this phenomenon. We are Africa’s largest purchaser of crop insurance on behalf of smallholder farmers in Africa, and without us, it is unlikely that any market for smallholder insurance would have developed. In the first several years of working with our insurance provider, we made up more than 80% of their business. Now there is a marketplace of several different providers, whose competition drives up quality and drives down prices for farmers across East Africa.

than defensively to protect their present. Further, this product acts as an umbrella over all the other elements and benefits of our model, preventing a single anomalous season from destroying the results of many years of hard work.

General contribution to program outcomes: The new income our clients protect or generate through crop insurance helps them to fill their food deficit and invest remaining profits productively – see below for a breakdown of spending trends.

as well as productive working relationships at every level of local and national government.

As part of this relationship, we are working to ensure clear alignment between our climateUsmart interventions and national climate priorities, especially Rwanda’s overall goal of a “developed, climateUresilient, lowUcarbon economy by 2050” (per RW’s 2011 Green Growth & Climate Resilience Strategy).

through nine years of operations, and have achieved a high degree of costUefficiency: in 2015, 70% of field costs were covered by farmer loan repayments, requiring outside subsidization of only 30% for our core operations.

In our entire proposal to GCF, including all related costs and revenues in RW and other One Acre Fund countries of operation, we estimate an average cost of $8.09 per ton of carbon emissions mitigated.

are extremely sensitive to even minor changes in rainfall or temperature. Research suggests that each day of climateUrelated ‘moisture stress’ during critical parts of the growing season results in a 7% loss in harvested yield, and that every 1°C increase in average temperature above 25°C results in a 10% decrease in yields. By 2050, average temperatures across SubU Saharan Africa are predicted to increase by 1.5 to 3°C.

The vast majority of smallholders in Africa are left fully exposed to this risk, both in the short and long term. Our crop insurance provides a critical hedge against massive risk for all RW clients.

Sustainable agricultural Intensification

Overall program name: Building Africa’s largest climate4smart smallholder farmer network (One Acre Fund Relevant initiative: Scaling up a proven suite of climateUsmart approaches to improving farm yields and profits, including:

Sustainable intensification enables farmers to increase their farm yields and income in a way that does not harm their

Propagation through partnerships: One Acre Fund will explore targeted opportunities to build on our existing successful

Sustainable ag intensification is by the far the largest driver of our economic impact on farmers. As discussed at left,

See above See above The target beneficiaries of this proposal – smallholder farmers – represent a large and extremely vulnerable


o Improved soil health: Enabling farmers to increase the longU term productivity of their soil through practices such as composting and products such as lime and biochar

o Crop diversification & intercropping: Training and supplying farm families with a robust mix of crop varieties, such as legumes, tubers, and diverse cereals, to improve resilience

o Optimized seed choice: Equipping farm families with optimal seed varieties based on local climates, while continuing to test and roll out new varieties as a response to changing climates

o Modern agricultural training: Delivering fieldUbased trainings to each farmer on sustainable intensification techniques (such as fertilizer microUdosing) throughout the season

environment, while building the longUterm productivity of their land. Improving yields can be achieved in one of two ways: increasing the productivity of existing farmland or clearing more wilderness to farm. Enabling the former for our Rwanda clients will cumulatively prevent the equivalent of 180,000 hectares of land, and accordingly prevent 800,000 tons of carbon emissions, by 2022. By offering this full suite of climateUsmart interventions, One Acre Fund increases our average RW client’s yearly farm income by around $43 – a gain of roughly 50% – for a projected total of $18m in new farm income each year by 2022.

collaborations with Rwanda’s Ministry of Agriculture and Animal Resources in pursuit of propagating these key interventions beyond our core program – for example, by incorporating further climateU smart trainings into our Farmer Promoter training curriculum, which could in turn reach farmers in every village nationwide. Knowledge creation & dissemination: We are continuously fieldU testing new products and services, as well as conducting rigorous M&E on the impact of current interventions, creating a unique knowledge base of smallholder learnings and best practices that we disseminate widely through staff dedicated to agricultural research and policy.

on average, our core program enables clients to increase their income by 50% or higher. The wideUreaching benefits of this income boost is evident is the spending trends of our clients: after filling their hunger deficit, farm families invest their new income productively, on average spending 33% on childhood education, 31% on new business activities, 12% of new income on more nutritious food, 6% on health care, and 18% on general wellUbeing (including household improvements, clothing, etc.). This represents a massive improvement in quality of life for rural smallholders, and an achievable path forward out of poverty.

population affected by climate change. Living in rural areas, their level of access to infrastructure and markets is very low; they require climateUfocused products and services that no other actors are supplying at scale. Their dual barriers of physical isolation and market access have caused a market gap of distribution – proven climate interventions exist, and are in demand, but remain out of reach to rural farmers. One Acre Fund fills this gap by ensuring that every element of our climateUsmart model is fully accessible through delivery, financing, and comprehensive trainings.


Sustainable landW use planning and management

Climate resilient rural settlement programme to facilitate land consolidation

Climate proof infrastructure

Promoting resilient infrastructure (roads , energy, water supply)

CRO

SS.C

UTT

ING

ACT

IVIT

IES

Sustainable tourism development (payment for ecosystem services, wildlife protection)

Strengthening law enforcement

Housing/green cities

Green neighbourhood. (An integrated green neighbourhood)

1.reduced emissions through increased lowW emissions, energy access and power generation & energy saving M2 M7 M8 M9 A2 A3 A4 A5 A6 A7 A8

WPilot project WNegotiation with the government to avail land to horizon WExpanding development in near future

Wsocial benefits Weconomic benefits Wsecurity benefits

Green growth climate strategy (EDPRS2)

1. Job creation Cost reduction

1. Environmenta l impact

2. accessibility houses to nationals

shortage of house

1

Supporting the Integration of Village greening Program

To support the integration of environment and climate change issues in greenings

Lively hood support will be market oriented and targeted towards viable,

Beyond the set objectives, the project will help in improving the lifestyle of the community economically.

Rainwater harvesting systems will be installed,

Rwanda Housing Authority will ensure that the project activities will be handed over to Districts themselves since they are the main stakeholders of the project. Rwanda

This is in line with the Rwandan vision 2020,

The National policy 2015, EDPRS2 and GGCRS.

The project aligns with the Government of

The project has four outputs and their output indicators, which will be monitored. The logical framework has already elaborated and should be a guiding tool to deliver outputs. It is

Most Districts in Northern, western, southern and Eastern provinces had a population living in scattered and high risk zones that was resettled in Planned Village Settlement sites as a way of protecting


climate resilient income generating activities.

Reliance on wood will be reduced, green jobs will be created and agriculture activities will increase. The project is expected to transfer green technologies to around 300 households and provide lively hood support to some of poorest households in two districts. The soil erosion control measures will have positive impact on household in targeted green village areas.

therefore the volume of rainwater storage will be increased, and the surface runoff and risks to floods will also reduce.

Number of green jobs created: It is no doubt that the project will create new green jobs (either temporarily or permanent) during its implementation. This will also contribute to improve livelihood and reduce poverty. The project is not only limited to job creation but also to capacity building and technology/ knowledge transfer among others

Housing Authority will also put in place Community Management Committees before the project ends for regular followWups.

Also, through sensitisation the beneficiaries will acquire skills and knowledge that will help them to keep activities going on since beneficiaries will have ownership.

Technical team from Rwanda Housing Authority will put mechanisms to assist and support beneficiaries’ on the completed activities.

Rwanda’s policy objectives and the environmental implications of the country’s Visions and programmes heading the country’s progress towards achieving the targets and implementing plans of actions of the environmental protection, rural development, and sanitary issues, soil erosion issues that support and promote human wellbeing of all Rwandans.

for this reasons Rwanda Housing Authority Staff will manage the project and in addition a few to be hired to follow up dayWtoW day project activities. M&E plan should be implemented and to provide quarterly reports of progress activities

the population from climate hazards. The sites are currently habitable with a very big number of households but still, exposed to climatic hazards such as soil erosion, too much use of biomass, lack of green jobs for vulnerable women and youth to support their livelihoods, lack of rain water harvesting tanks, lack of planted trees for greening the village, limited community empowerment to climate resilience adaption. The project will make interventions 10 Villages in 10 most vulnerable districts.

The project is expected to be accepted by beneficiaries due to a number of positive environmental benefits such as runoff control, improved access to


water for domestic uses and economic activities

The project is based on demand driven, participatory and cost sharing approaches which ensure the ownership of the project by beneficiaries and therefore the sustainability.

The institutional arrangement is also set in a way to optimize the involvement of decentralized entities, which is also a factor of ownership and capacity building for the sustainability.

Target communities have shown ownership from the beginning of project design by providing their inputs on problem analysis, they face and proposed solution to overcome those


problems. The involvement of direct beneficiaries and their commitment in maintenance of biogas digesters and planted trees will also ensure sustainability. To work under cooperative rather than working individually will be another aspect of ensuring the sustainability. To put in place maintenance workshop (in the budget?) to repair damaged asset is also perfect to ensure sustainability.


Annex 3. Proposed management tool for GCF Projects/Programmes pipeline

GCF_Projects_Pipelin e_Dec2016.xlsx


Annex 4. GCF results framework20 MITIGATION expected results

Paradigm.shift Objective Shift to lowPemission sustainable development pathways

Fund.level Impacts 1.0 Reduced emissions through increased lowPemission energy access and power generation

2.0 Reduced emissions through increased access to lowPemission transport

3.0 Reduced emissions from buildings, cities, industries and appliances

4.0 Reduced emissions from land use, deforestation, forest degradation, and through sustainable forest management and conservation and enhancement of forest carbon stocks

Project/Programme Outcomes 5.0 Strengthened institutional and regulatory systems for lowPemission planning and development

6.0 Increased number of small, medium and large lowPemission power suppliers

7.0 Lower energy intensity of buildings, cities, industries, and appliances

8.0 Increased use of lowPcarbon transport

9.0 Improved management of land or forest areas contributing to emissions reductions

ADAPTATION expected results

Paradigm.shift Objective Increased climatePresilient sustainable development

Fund.level Impacts 1.0 Increased resilience and enhanced livelihoods of the most vulnerable people, communities, and regions

2.0 Increased resilience of health and wellPbeing, and food and water security

20 Initial Results Management Framework of the Fund (Progress Report), GCF/B.06/04, 9 February 2014; Further Development of the Initial Results Management Framework, GCF/B.08/07, 06 October 2014


3.0 Increased resilience of infrastructure and the built environment to climate change

4.0 Improved resilience of ecosystems and ecosystem services

Project/Programme Outcomes 5.0 Strengthened institutional and regulatory systems for climatePresponsive planning and development

6.0 Increased generation and use of climate information in decisionPmaking

7.0 Strengthened adaptive capacity and reduced exposure to climate risks

8.0 Strengthened awareness of climate threats and riskPreduction processes

Department of Finance and Administration

The National Designated Authority (NDA)

Country Program Review Log

Date of last review Lead Reviewer Updates made

This Country Program was prepared by Leah Briones-Johnson, PhD, Country Program Consultant under the FSM-GCF Readiness Phase, Sep 2016 to Sep 2017, with the Pacific Community as delivery partner.

Cover photograph by Jeffrey Ikosia A seawall and the iconic coconut ‘trees of life’ for the islands. Woleai Atoll, Yap State, 2010.

Acronyms and Abbreviations 4 ................................................................................................Foreword 5 ................................................................................................................................Executive Summary 6 ...............................................................................................................1. Country Profile 7 ....................................................................................................................

1.1 Climate Change Profile: ‘Highly Vulnerable’ 9 .................................................................................................1.2 Climate Change Policy Response 13 ................................................................................................................1.3 Development Profile: ‘Fragile’ 17 ......................................................................................................................1.4 Development Prospects and Strategies: ‘Green Growth’ 22 ............................................................................1.5 ‘A Green and Prosperous FSM’ Strategic Framework 27 ................................................................................

2. Country Agenda and GCF Engagement 29 ...........................................................................2.1 Institutional Arrangements 29 .........................................................................................................................2.2 Roles and Contributions of Key Stakeholders 30 ............................................................................................2.3 Identification of Country Priorities for the GCF 36 .........................................................................................2.4 Private Sector Engagement 37 .........................................................................................................................2.5 Country Portfolio 38 .........................................................................................................................................

3. Country Program Implementation and Sustainability Plan 52 ...........................................3.1 Implementation Timeline and Institutional Arrangements 52 .......................................................................3.2 Reporting 53 .....................................................................................................................................................3.3 M&E System: Results Framework and Context 54 ..........................................................................................3.4 Management Needs 55 .....................................................................................................................................3.5 Mechanisms for Keeping the Future, Present: 55 ............................................................................................

Annexes 56 ................................................................................................................................Annex 1: Reference Guide on the Development of the Strategic Framework 56 ..................................................Annex 2: Supplementary Consultations 61 ............................................................................................................Annex 3: ODA Priorities List (2016 to 2018) 62 ....................................................................................................Annex 4: FSM-GCF Proposal Approval Process 63 ...............................................................................................Annex 5: FSM-GCF Eligibility Assessment Form 65 .............................................................................................Annex 6: Country Program M&E Results Framework Template 67 .....................................................................Annex 7: Key Sources Consulted 73 .......................................................................................................................Annex 8: Acknowledgements 76............................................................................................................................

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Acronyms and Abbreviations

ADB Asian Development Bank KfW German government-owned development bank

AFD French Agency for Development MCT Micronesia Conservation Trust

CC & SD Council

FSM Climate Change and Sustainable Development Council

M&E Monitoring and Evaluation

CC Policy FSM Nation Wide Integrated Disaster Risk Management and Climate Change Policy, 2013

NAMA Nationally Appropriate Mitigation Actions

CI Conservation International NAP National Adaptation Plan

CP FSM-GCF Country Program NDA FSM National Designated Authority to the GCF

CTF USA Compact Trust Fund NGO Non Governmental Organisation

DFA FSM Department of Foreign Affairs NOL FSM No Objection Letter to access GCF resources

EAForm FSM-GCF Eligibility Assessment Form ODA FSM Overseas Development Assistance

EEZ Exclusive Economic Zone OEEM FSM Office of Environment and Emergency Management

ENSO El Niño – Southern Oscillation PMO Infrastructure Project Management Office (FSM State level)

FAO Food and Agricultural Organization PMU Infrastructure Program Management Unit (national level)

FDI Foreign Direct Investment PRIF Pacific Region Infrastructure Facility

FP FSM State-based GCF Focal Point R&D FSM Department of Resources and Development

FSM Federated States of Micronesia SDGs UN Global Sustainable Development Goals 2030

FSMDB FSM Development Bank SDP FSM Strategic Development Plan 2004 to 2023

GCF Green Climate Fund SEEA System of Environment-Economic Accounting

GDP Gross Domestic Product SIDS Small Island Developing States

GGS Green Growth Strategy SOE State Owned Enterprise

GHG Greenhouse Gas SPC Pacific Community

GIZ Development assistance provider for the German government

SPREP Secretariat of the Pacific Environmental Program

GNDI Gross national disposable income TC&I FSM Department of Transportation, Communications and Infrastructure

GNI Gross national income TNC The Nature Conservancy

IDP FSM Infrastructure Development Plan 2016 to 2025 UAE United Arab Emirates

IMF International Monetary Fund UNDP United Nations Development Program

IOM International Organisation for Migration UNEP United Nations Environment Program

ISAAC Institutional Strengthening in Pacific Island Countries to Adapt to Climate Change

UNESCO United Nations Educational, Scientific and Cultural Organisation

IUCN International Union for Conservation of Nature USAID United States Agency for International Development

JICA Japan International Cooperation Agency WB World Bank

JSAP Joint State Action Plan for Disaster Risk Management and Climate Change by each FSM State

WHO World Health Organisation

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Foreword

5

Executive Summary

The Green Climate Fund (GCF) Country Program (CP) for the Federated States of Micronesia (FSM) was prepared under the direction of the National Designated Authority (NDA) for the GCF at the FSM Department of Finance and Administration, in consultation with all four States: Yap, Chuuk, Pohnpei and Kosrae. Consultations were undertaken with a whole-of-society approach, including stakeholders from government, non-governmental and intergovernmental organisations and the private sector.

This CP presents the strategic and operational framework for engagement with the GCF. Its purpose is to ensure that project and program proposals submitted to the GCF integrate national priorities with climate-smart development. It further serves to increase the understanding of the linkages between climate change and the sustainable development of the FSM as a Small Island Developing State but also as a Large Ocean State. To this end, the CP is anticipated to maximise access to climate finance opportunities and attract complementing investors to stimulate ‘green growth’ development in the FSM.

The CP covers the sectors under the Joint State Action Plans for Disaster Risk Management and Climate Change (JSAPs), prepared by each State in 2015. The sectors include: the environment (coastal ecosystem and biodiversity), water resources and sanitation, agriculture, health, education, infrastructure, transportation, fisheries, social and cultural, and private sector development.

The Country Portfolio includes a total of 13 priority projects/programs, which are large scale, multi-year and cross-sectoral, and with an approximate total amount of $US 1.4 billion. The projects were identified through a States-driven process that consolidated the endorsed priority projects under the JSAPs, the FSM Infrastructure Development Plan (IDP) and the FSM Overseas Development Assistance (ODA) Priorities List for the period 2016 to 2018. The consolidated projects/programs were identified as part of a larger FSM-GCF Proposal Approval Process that ensures early alignment of projects and programs with the FSM nation-wide development priorities and the GCF impact result areas. With the exception of the FSM Renewable Energy Program, all priority projects/programs in this CP are at ‘Ideas’ stage, requiring further scoping, sector-wide analysis and stakeholder consultations.

The portfolio represents the urgent, large scale needs in the FSM to achieve resilient and transformative development, and positions the country to transition into ‘green growth’. The implementation and sustainability of this CP depends on the commitment to strengthen institutional structures in order to absorb and effectively manage the ambitious, yet necessary, portfolio over the longer term. This CP ensures that the institutional pillars of ‘leadership, coordination and capacity’ are a key part of the strategic and operational implementation of the portfolio. Of the pillars, it is particularly incumbent on leadership to ensure that the Sustainability Plan set out in Section 3 remains active and relevant.

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1. Country Profile

Geographical location Source: www.fsmstats.fm

The FSM is a grouping of 647 small islands in the North Pacific Ocean and comprised of four semi autonomous states: Yap, Chuuk, Pohnpei and Kosrae.

Land and Ocean area Source: www.fsmstats.fm

273.5 square miles of land area, with a vast exclusive economic zone (EEZ) covering over one million square miles (2.9 million km2). Land area total is made up of Yap State: 46 Sqmi, Chuuk State: 49 Sqmi, Pohnpei State: 132 Sqmi and Kosrae State: 42 Sqmi.

All States except Kosrae have inhabited outer-island atolls. Yap State is made up of 4 volcanic islands, 7 small islands and 130 atolls (of which 22 are inhabited). Pohnpei State is made up of one large volcanic island and 6 inhabited atolls. Chuuk is made up of 7 volcanic island groups within the Chuuk Lagoon and 24 outer-island inhabited atolls.

PopulationSource: www.fsmstats.fm, 2010 Census.

FSM total: 102,843 (52,193 males, 50,650 females, average annual growth rate: -0.4% since 2000):

Yap: 11,377 (5,635 males, 5,742 females, growth rate: 0.1%)

Chuuk: 48,654 (24,835 males, 23,819 females, growth rate: -1.0%)

Pohnpei: 36,196 ( 18,371 males, 17,825 females, growth rate: 0.5%)

Kosrae: 6,616 (3,352 males, 3,264 females, growth rate: -1.5%)

Outer-islands: In Yap, around 40% (4,006) of the population live on the outer- islands; Chuuk, 30% (12,502); Pohnpei, under 1% (1,407). Kosrae does not have outer-islands.

Urban population is around 7.4% in Yap, 28.5% in Chuuk, 16.8% in Pohnpei, 32.6% in Kosrae.

Close to 60% of households in the FSM live 200 yards from the shoreline;70% in Yap, 68% in Chuuk, 38% in Pohnpei, and 80% in Kosrae.

Around half of the population engages in subsistence and mixed subsistence livelihoods.

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Types of climateSource: FSM Joint State Action Plans, 2016

The FSM is located on the southern edge of the typhoon belt, resulting in occasional severe damage particularly in the western islands of Yap. FSM islands are also affected by periods of drought and excessive rainfall associated with the phases of the El Niño – Southern Oscillation (ENSO). The eastern high volcanic islands of Kosrae, Pohnpei and Chuuk are prone to variable and heavy rainfall and damaging winds.

GHG emissions profileSource: Foruw and Konno-Anisin, 2010, based on the second greenhouse emissions inventory for the FSM using 1994 baseline data and 2000 data.

0.003% of global CO2 emissions.

The total amount of CO2 emitted in the FSM as a result of fossil fuel combustion is estimated at 151.91 gigagram, or 151,910 metric ton. CO2 emissions have decreased by 7.7% since 1994 when the amount of CO2 emitted in the FSM was estimated to be 164.51 gigagram.

Key emitter sectors Source: Foruw and Konno-Anisin, 2010.

The Energy sector (electricity generation and road transport) is the primary source of GHG emissions (79%), followed by Forestry and Other Land use (12%), Waste (8%), Industrial Processes (0.4%) and Agriculture (0.3%).

Key climate risks Source: FSM Joint State Action Plans, 2016

General: Extreme rainfall event, drought, high sea levels, strong winds, extreme high air temperature.

Yap: typhoons, flooding, droughts, and high seas storm surges in its outer-islands.

Chuuk: droughts, typhoons, tropical storms, storm-waves, flooding, landslides, and high sea surges in its outer- islands.

Pohnpei: droughts, variable rainfall patterns, typhoons during El Niño periods, tropical storms, and high sea levels during La Niña.

Kosrae: tropical storms and typhoons, droughts, landslides, higher than normal high tides, large sea swells, increased impact of storm surges and flooding as a result of sea level rise.

Vulnerable sectorsSource: FSM Joint State Action Plans, 2016

Water Resources, Agriculture, Human Health, Transport and Infrastructure, Fisheries, Coastal Ecosystem and Biodiversity, Private Sector

NDA/FP Secretary, FSM Department of Finance and Administration

National/Regional AEs Micronesia Conservation Trust (MCT) - Micro, Category C.Secretariat of the Pacific Environmental Program (SPREP) - Category C.

International AEs relevant to the FSM CI, ADB, UNDP, AFD, KfW, IUCN, UNEP, GIZ, FAO

Potential AEs nominated 1. Federated States of Micronesia Development Bank (FSMDB) 2. Vital (an energy company)

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1.1 Climate Change Profile: ‘Highly Vulnerable’

Current and Projected Climate Impacts

The FSM has experienced increases in air temperature at 0.1°C per decade since 1952. It also continues to experience ocean acidification and accelerated above average sea-level rise at10mm per year (since 1993). Projections indicate that air and sea-surface temperature, ocean acidification and sea level rise, along with coastal erosion, will all continue to intensify. Variable and heavy rainfall, severe droughts and extreme weather continue to affect the main and outer-islands. While current projections on their frequency carry some uncertainty, climate modelling to the year 2100 provides high to very high confidence levels of negative climate change impacts in the FSM (Table 1).1

FSM’s climate can vary considerably from year to year due to the cyclical El Niño and La Niña events of the El Niño-Southern Oscillation (ENSO). El Niño causes drier conditions which results in droughts. La Niña causes above-average rainfall and tropical storms.

The vast geographical spread of the FSM islands from Yap State to Kosrae State sees a wide variation in location and geology from west to east. The islands have thus a wide range of climates and different impacts are experienced across the country. Yap is characterised by gentle slopes and swampy lowlands, unlike the other three states which have rugged highlands. Yap is drier than the other states and is highly susceptible to droughts and wildfires. It is also the most susceptible to typhoons; between three and five typhoons hit the State each year. During the summer months (June to October), Yap experiences heavy showers or thunderstorms, occasionally accompanied by strong and shifting winds. Chuuk State is composed of a large archipelago with mountainous islands surrounded by a string of islets on a barrier reef, a large lagoon, and islands which are flat and small located outside the lagoon, referred to as ‘outer-islands’. As the most populated State, Chuuk’s dispersed geography and demography is unique compared to the other states, all which have the majority of their populace concentrated on large central islands. Storms and typhoons have caused widespread damage in Chuuk, while also bringing heavy rainfall causing extensive flooding, mudslides, and landslides that have resulted in deaths. Pohnpei State periodically

Pacific-Australia Climate Change Science and Adaptation Planning Program, 2014. See Annex 7 for full reference details.1

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experiences droughts and short, severe tropical storms. The northern part of Pohnpei often experiences tropical disturbances. Kapingamarangi is the State’s southernmost atoll and isthe most subject to droughts. Kosrae State has experienced severe droughts and also frequent severe rainstorms, accompanied by damaging winds, during the rainy season of November through March. Table 2 shows the projected climate change impacts for each State.

Vulnerable Groups

The communities who are most at risk include the young and the elderly; thedisabled and those with other health and mobility problems; thesocially disadvantaged; those with limited access to public information broadcasts and communications; those that work outdoors such as fishers and farmers; and those who have already been, or are likely to be displaced, such as residents of riverbanks and hillsides, low-lying atolls and those living close to the coasts. Those living in rural areas and outer-islands are particularly vulnerable, given the long distances, at times unfavourable weather, logistics and high-cost challenges in inter-island transportation that make it particularly difficult to deliver assistance. The social group of women and young girls, especially if pregnant, rearing young children, caring for the elderly, and/or affected by sexual violence , are also especially at risk. 2

The FSM National Climate Change and Health Action Plan (2012), highlights that ‘it is also important to recognise the risk 2

of violence, including sexual violence, that often occurs in the aftermath of natural disasters, and which disproportionately affects women and children.”

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Adaptive Capacity

As a Small Island Developing State (SIDS), the FSM’s vulnerability profile is characterised by its environmental fragility, remoteness and geographic dispersion across a vast ocean. It isfurther characterised by fragmented governance, underdeveloped infrastructure and low availability of technical capacity. These challenges are compounded by high exposure to economic shocks, natural disasters and climate change. Table 3 summarises the current level of capacity in the FSM States to respond to negative climate change impacts.3

Vulnerable Sectors

In 2015, each FSM State prepared its Joint State Action Plans for Disaster Risk Management and Climate Change (JSAP), and identified the vulnerable sectors of the environment (coastal ecosystem and biodiversity), water resources and sanitation, agriculture, health, education, infrastructure (transport and energy), fisheries, social and cultural, and the private sector. Cutting across these sectors are three main identified areas of vulnerability: private sector investment, food and water security, and infrastructure and energy development.

Private Sector Investment

Across the States, private sector investment is concentrated in the three main economic sectors of agriculture, fisheries and tourism. However, all three sectors are highly dependent 4

on a healthy and well-managed natural environment, which in turn, is highly vulnerable to climate change. For example, fisheries have high correlations of fish catch with sea surface temperatures and ENSO events; as pelagic fish leave the region due to rising temperatures and as reef fish stocks dwindle due to coral bleaching, the FSM could suffer severe economic setbacks. Nature-based tourist operators are concentrated in the coastal zone, and are therefore vulnerable to sea-level rise, high seas/swell events, heavy rainfall and severe

For a detailed vulnerability assessment by sector and by State (compiled from the JSAPs), refer Annex 2 of the Rapid 3

Vulnerability Assessment Report. The Report was prepared in February 2017 to inform the development of this CP. See Annex 7 for full reference details.

The FSM Strategic Development Plan (2004 to 2023) identifies these sectors as providing the strongest chance for 4

sustained growth. The 2013 FSM Investment Guide highlights that for Yap State, investments are encouraged under cultural and nature-based tourism and fish production. For Chuuk State, marine tourism and fisheries and agriculture production. For Pohnpei State, cultural and nature-based tourism development around a World Park, a Micronesian Tourism Complex, historical and archaeological sites such as the ruins of Nan Madol, and water sport activities such as surfing, food production and processing; and tuna onshore processing. In its State Strategic Development Plan, Kosrae State highlights nature-based tourism as a key area for development.

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weather. Climate impacts include the potential of high sea-swell events to disrupt commercial transport access, posing a risk to both incoming people and supplies to the islands. Further, the tourist drawcards of thriving terrestrial and marine ecosystems are likely to be negatively impacted by rising sea surface temperatures and ocean acidification.

Food and Water Security

Higher disturbance frequencies on terrestrial and marine ecosystems are expected to negatively impact food and water security. These include increased impacts of droughts in 5

Yap and Chuuk on natural vegetation; shortages in freshwater supplies, especially in the outer-islands; increased incidence of lowland flooding and seawater inundation of traditional taro pits; and of landslides, especially in the steep topographies of Chuuk, Pohnpei and Kosrae; depleted coral-based marine ecosystems as a result of ocean acidification; negative impacts on fisheries, turtle nesting beaches and low-lying seabird nesting areas on atolls as a result of sea temperature rise and change in ocean currents. Compounding these climate-induced hazards is the widespread unsustainable use of natural resources, common across all the States. These human-induced vulnerabilities include over-fishing, deforestation and the building of roads and other infrastructure that negatively impact the coastal environment. In addition, inadequate land, water and wastewater management practices exacerbate climate-induced natural disasters.

Infrastructure and Energy Development

Infrastructure is highly vulnerable to sea level rise. For the States of Chuuk, Pohnpei and Kosrae, most infrastructure is located close to the coastline as the interior of the islands are mountainous. Kosrae State is presently tackling the most urgent example of the damaging impacts of shoreline change, high tide and storm flooding in the FSM, as it strives to reposition its major roads and other infrastructure for resilience. Infrastructure development also offers the greatest potential for economic growth, effective public service delivery and strong adaptive capacity in the FSM. Yet, the sector poses the biggest challenges to the protection of the natural environment, which is ‘the most important infrastructure’. The 6

FSM recognises that infrastructure development must thus be undertaken with great caution, and has integrated climate change planning into its updated Infrastructure Development Plan (IDP) (discussed further in Section 1.2).

The FSM also recognises that clean energy underpins climate-smart infrastructure development while it remains highly dependent on imported petroleum fuels for both

Also expected is the increase in climate-induced migration from outlying islands particularly as a result of food and water 5

scarcity. However, climate migration management was identified as a priority project only in Yap State’s JSAP.

From a remark made by the Pohnpei State GCF Focal Point, Feliciano Perman, during stakeholders’ consultations: 6

“infrastructure is important, but the environment is the most important infrastructure”.12

electricity generation and transportation. Progress in the energy sector is thus consideredparticularly important, and especially given that it is the principal source of greenhouse gas emissions in the country (Figure 1). The FSM’s Intended Nationally Determine Contribution (INDC) has an unconditional target of 28 per cent reduction in greenhouse emissions and a conditional target of 35 per cent by the year 2025.

The Country priority pipeline of projects and programs (Section 2.5.1) responds to these main areas of vulnerability.

1.2 Climate Change Policy Response

In the FSM, climate change and development are inextricably linked. A key goal in the FSM’s twenty year (2004 to 2023) Strategic Development Plan (SDP) is to ‘mainstream environmental considerations, including climate change, in national policy and planning as well as in all economic development activities’.7

Since 2013, the FSM has established concrete policy and planning initiatives to advance climate change considerations in development planning. Consistent with the SDP goal above, its Integrated Disaster Risk Management and Climate Change Policy (CC Policy) goal is:

“to promote development that proactively integrates the management of disaster and climate related hazards by investing in disaster risk management, climate change adaptation and greenhouse gas emissions reduction in pursuit of a safe, resilient and sustainable future for our country.”

The Climate Change Act was developed in 2014 to implement the CC Policy by introducing climate change-mainstreaming obligations for departments and agencies of the National Government. In March 2017, a Climate Change and Sustainable Development Council 8

(CC&SD Council) was established to ensure the implementation of the Act. The Council will provide leadership and institutional coordination on the mainstreaming of climate change into policies and actions across all sectors and initiatives in the country. Significantly, the Overseas Development Assistance (ODA) Division is represented in the Council to ensure country-driven donor coordination as well as to facilitate leveraging of ODA funds. In June

Section 7.2.1 of the FSM SDP.7

The Act also serves to provide the overarching framework for detailed legislation on climate change. 8

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2017, the FSM Congress progressed a bill to raise the status of the Office of Environment and Emergency Management (OEEM) to Department level, indicating a solid recognition that climate change and the environment remains a top priority for the FSM.

The JSAPs were developed to take policy and planning forward by identifying priority 9

projects that establish consistency in climate change-related objectives, strategies and outcomes across development sectors. The JSAPs reviewed vulnerabilities and opportunities for climate-smart development in each State of the FSM. The documents analysed and presented options for implementation of priority projects. Each JSAP developed an action plan with suggested policies and actions, their timelines, responsible government offices, and estimated project costs. Each activity matrix in the JSAP was developed through extensive and inclusive stakeholder engagement and addressed adaptation efforts that were considered to be the most impactful and most immediately needed at both community and State levels. As of August 2017, the JSAPs have been endorsed by all States.

In the same period, the FSM produced its updated IDP (2016 to 2025) which aligns planning with the JSAPs and which incorporates environmental and climate change considerations. In also aligning with the SDP goal, the IDP provides a good example of mainstreaming climate change in a significant economic development undertaking. One of the main objectives of the IDP is to improve environmental outcomes and conditions while also improving natural disaster and climate change resilience of infrastructure in the FSM. The plan covers ten sub-sectors: electric power, water/wastewater systems, solid waste management, road and pedestrian facilities, maritime transportation, air transportation, telecommunications, education, health and government administrative buildings. While the Plan identifies one project that specifically targets cross-sector climate change adaptation in Yap State’s infrastructure projects, this approach is mainstreamed across the JSAPs, with each State prioritising a climate resilience approach to their respective infrastructure programs. Projects in the IDP are anticipated to contribute to adaptation and mitigation through the building of climate-proof roads and buildings; improvements to water supply and sanitation, waste management and inter-island transport; and reduced fossil fuel use through upgraded road systems and increased use of renewable energy. A Climate Adaptation Guide for Infrastructure was concurrently developed to support the mainstreaming of climate change in all infrastructure projects. In 2015, the FSM began to implement the plan.

In July 2017, R&D released the FSM’s first Environment Statistics and System of Environment-Economic Accounting (SEEA)-National Assessment Report. Based on existing national policy documents and a national technical assessment of environment statistics, the Report provides a foundation for statistical development that can inform decisions related to supporting the development of a green economy in the FSM.

Key national and State-specific policies of relevance to climate change and disaster risk management are highlighted with 9

key policy goals and priority actions in each respective State’s JSAP. 14

To channel these significant developments into a development pathway of low carbon emissions, increased adaptation and ‘green growth’ for the FSM (see Section 1.4), the FSM-GCF Readiness Program is working with partners to develop a national adaptation plan (NAP) and a green growth strategy (GGS) for the FSM. The NAP will provide a reference framework to define national targets, and ensure a consistent approach in adaptation planning and implementation across sectors, and across the FSM States. The GGS will institutionalize climate proofing and green growth strategies in the design of the infrastructure projects in the pipeline projects/programs (Section 2.5.1) to maximise economic gains under a green growth scenario. Together, these initiatives will inform the development and implementation of a nation-wide approach that adapts infrastructure development to climate change as well as to a green growth development pathway.

These initiatives are supported by the forthcoming implementation of the INDC. Table 4 presents a summary of INDC targets. The Office of Environment and Emergency Management is currently working with the United Nations Development Program (UNDP) to develop the FSM’s INDC assessment and progress report. The report will enable identification of Nationally Appropriate Mitigation Actions (NAMA), of supporting technology and capacity building needs, and the estimated resources for implementation.

Given the significance of the energy sector in the INDC, a multi-pronged approach is required to meet the targets. At the systemic level, mitigation challenges can be overcome with support from high levels of government, for example, through clean energy legislation and with well-planned actions to secure funding for technology transfer. At the institutional level, the challenges can be met with improved plans, data and implementation to support the establishment of a system that monitors GHG savings from mitigation projects. The report on the Experimental Energy Accounts for the FSM, released by R&D in July 2017, is a critical step forward. The energy accounts present existing energy data to inform the development, implementation and monitoring of national energy policies and priorities, particularly through infrastructure capacity planning; regulatory development; and through the tracking of implementation progress against nation-wide development priorities. The data can further inform the design and delivery of education and training for local communities to maximise participation in the development of renewable energy sources and the adoption of energy efficient practices. The FSM Energy Policy, and related Action Plans at the national and State levels, are making measurable progress towards greater energy independence by increasing the share of renewable energy sources, and by developing cross-sectoral energy conservation and

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efficiency standards. The FSM’s Energy MasterplanRoadmap is scheduled to be completed by early 2018 to catalyse progress and guide medium to long term planning towards a cleaner and efficient energy future for the FSM.

Regional and International Partners

The FSM’s climate change policy response has involved active engagement with regional and international partners (Figure 2). Notably, The FSM is a signatory to the Micronesia Challenge, a regional initiative with Palau, the Marshall Islands, the Commonwealth of the Northern Mariana Islands and Guam, to conserve at least 30 per cent of near-shore marine resources and 20 per cent of terrestrial resources across Micronesia by 2020. Since 2002, the initiative has established around 35 marine and terrestrial protected areas in the FSM,

including the conservation easement in Kosrae State for the largest remaining stand of Terminalia Carolinensis (“Ka”) trees in the world. The initiative has also enabled the designation of two UNESCO Biosphere Reserves in Utwe/Walung in Kosrae and Ant Atoll in Pohnpei State.

16116666The largest remaining Ka Forest in the world, Kosrae State

1.3 Development Profile: ‘Fragile’

Context

As a SIDS, the FSM’s developmental challenges are vast, volatile and fragile. These challenges include a limited resource base that is incompatible with economies of scale and sustained economic growth; small domestic markets with heavy dependence on a few external and remote markets; high costs of energy, infrastructure and transportation; constrained private sector development; limited productive use of land; limited institutional and technical capacity; an apparent rate of gender-based violence and inequality; widely dispersed geography; low resilience to natural disasters and a fragile natural environment. Taken as whole, these challenges make the FSM highly vulnerable to external shocks and heavily dependent on overseas aid, thus forming a formidable barrier to sustainable development.

The FSM’s development profile is to be understood in the context of its strategic and socio-economic ties with the United States within the two periods of their Compact of Free Association. The first or original Compact commenced in 1987 and the second or Amended Compact commenced in 2004. Both provide support to the operations of Government and public sector investment. The Amended Compact provides financial assistance of $92 million annually, with a focus on public service delivery, infrastructure and contributions towards the Compact Trust Fund (CTF), which was established to replace the assistance upon its termination in 2023. The Compact also permits unrestricted migration to the USA, which has functioned as a development mechanism in both positive and negative ways for the FSM economy. On the one hand, migration has enabled employment with higher wages and the generation of remittances, especially in the difficult economic period under the second Compact. On the other, it creates wage distortions in the domestic labor market, increases dependency on remittances, and results in a loss of skilled, human capital, thus reducing the long-term productive potential of the economy.

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Utwe/Walung Biosphere, Kosrae StateAnt Atoll Biosphere, Pohnpei State

Macro-economic and fiscal circumstances and strategies

Given its engagement with the US Compact, the FSM uses the US dollar as its official currency and has not seen the need to develop any domestic debt instruments with which to affect interest rates or monetary aggregates. As a result, macro-economic management in the FSM is limited to fiscal policy, which is composed of maximising revenues from the CTF, the FSM Trust Fund and ODA; maintaining a prudent external debt profile; managing 10

appropriations on public projects; and delivering financial assistance to the States.

Following years of difficult fiscal adjustments to meet the requirements of the Amended Compact, the FSM’s fiscal balance turned positive in FY2014, when the overall fiscal balance recorded a surplus of $42.7 million. In FY2015, the fiscal surplus dropped to $29.3 million, and to $22.3 million in 2016. Provisional fiscal surplus for FY2017 is $14.2 million, with a surplus forecast of around 15 million per annum for the following three years based on stable fishing license fees. Notably, the surplus is mainly applicable to the national government; in FY2015, for instance, all State governments recorded deficits. However, revenue-sharing arrangements allows for redistribution that has seen an increasing share of revenue to the States.

GDP growth in the FSM has averaged -0.2 per cent per annum since the beginning of the Amended Compact in 2004. FY2015 saw a recovery with the FSM’s economy growing by 3.7 percent, largely owing to growth in the fisheries sector, wholesale and retailing as well as business and financial services. In this same year, the implementation of the updated IDP contributed to a slight increase of 3.8 percent growth in 2016. Continued growth is forecasted in the medium term as the IDP continues to be implemented over the next ten years.

The well-performing economy of recent years has enabled the National Government to rapidly grow the FSM Trust Fund from $8 million in FY2012 to $81.5 million in FY2016. The government anticipates to contribute $10 million per annum (of the forecasted $15 million per annum surplus) to reach a target Fund value of $250 million by FY2023. In contrast, the CTF has a current value of $524.7 million, and has so far performed well in FY2017. However, projections based upon actual performance demonstrate that the CTF will be underfunded by FY2023 if it continues on its current trajectory. A fiscal gap of $40 million per annum in the CTF is projected from FY2024 onwards, although this may be eased to $30

As per the FSM Economic and Fiscal Update 2017, the external debt to GDP ratio was relatively low at 23.4 percent in 10

FY2016, and the debt service to domestic revenue ratio at a rate of 5 percent.18

million per annum following the intended contribution of the $10 million per annum from the FSM Trust Fund.

The economic outlook beyond the Amended Compact is therefore uncertain and fragile. Beyond 2023, the FSM’s priority is to grow the economic sectors of agriculture, tourism and fisheries so that it can continue funding the social services of health and education at current levels under the Compact. The fiscal gap and uncertain continued performance of both the FSM Trust Fund and the CTF, however, presents a great challenge. Historically, economic activity has largely been driven by the disbursement of Compact funds. GDP is therefore projected to decline by an annual average of 1.0 percent per annum over the post 2023 period. GNDI is also likely to be affected given that in the case of secondary incomes, Compact and other U.S. grant receipts have significantly contributed to GNDI. Finally, difficult fiscal circumstances may place the FSM in a position where it may not be qualified to access any large external borrowing to help off-set any additional fiscal shortfalls. In order to overcome these challenges, the FSM is committed to continued fiscal reforms; to strengthening ODA effectiveness; and to pursuing its strategies for growth.

Private sector

The 2023 Action Plan sets out a long-term economic growth strategy with emphasis on private sector led growth. Ideally, private sector growth is expected at a rate sufficient to produce jobs, entrepreneurial opportunities and to contribute to closing the fiscal gap in FY2024. However, the development of a vibrant private sector in the FSM has also been challenging.

The private sector in the FSM is characterised by a high dependency on the relatively larger public sector. The role of the government in the FSM economy continues to be large even relative to other small Pacific Island nations. Since the first Compact, the government has been the largest sector in the economy, due largely to Compact transfers made directly to national and State governments. Government wages in the FSM are higher than those of the private sector for comparable jobs. Dependency is particularly apparent in public spending on infrastructure development; private sector contraction has directly correlated with the reductions in construction being the dominant factor, particularly in the years 2012 to 2014. Dependency is also characterised by the direct effects of policy decisions on fiscal activities on the private sector. For example, the impact of fiscal shocks on the government translates directly into impacts on the private sector. In the case of a negative fiscal shock, government expenditure cuts goods and services. In the case of positive fiscal shocks, government expenditure increases, as experienced in the FSM, particularly towards wages.

Private sector development is further constrained by remoteness from major markets, costly operations, and by barriers in attracting foreign investors and retaining skilled workers. The commercial sector in the FSM consists mainly of small family-based businesses in the wholesale and retail sectors or service enterprises such as small hotels, restaurants, taxis and

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vehicle maintenance. There are around twenty-two major state-owned enterprises (SOEs) operating in the financial sector, power, telecommunications, utilities, fisheries, and other miscellaneous activities. With the exception of Vital and FSM Telecom, a significant number of SOEs have been found to post recurring losses. The key economic sectors of agriculture, tourism, fisheries and energy, remain largely under-developed and the economy remains heavily reliant on imported products.

Going forward, the government recognises that growth of the private sector will need to be driven by increases in production of competitively traded goods and services from the key economic sectors. Despite challenges, it is committed to forging ahead with reforms to create an enabling environment for private sector development, such as tax reform to replace an outdated and inefficient system and foreign direct investment (FDI) reform to streamline foreign investment under the jurisdiction of the national government. The growth of the utility sector, power and telecommunications since the start of the Amended compact has resulted in the increasing significance of SOEs in the economy. Attention to reforms that increase SOE efficiency and profitability will also thus be helpful. Given the sensitive dependency of the private sector on government fiscal policy, a gradual strengthening of fiscal management will ensure timely and transparent adjustments that can lessen the impacts of shocks on the private sector.

Domestic Credit Levels

The FSM banking system has remained sound and stable, providing a secure basis for financial intermediation, due largely to regulation by the FSM Banking Board and supervision by the Federal Deposit Insurance Corporation (provided under the Compact). The FSM has two banks; the U.S. Bank of Guam and the nationally-owned Bank of the Federated States of Micronesia. Between 2008-2015, the deposit base grew rapidly at an average of 11 percent since the early period of the Compact. Reflecting the trends in deposits and domestic credit, the level of foreign assets rose strongly from an average of $92 million in the early years of the Compact to $199 million in 2015. Consumer lending has grown by an annual average of 12 percent during the Amended Compact. Commercial credit grew from FY2004 to FY2011 by an annual average rate of 14 percent but has since dropped from around 17 million in 2011 to around 11 million in FY2015.

The growth of the financial sector in the FSM remains inhibited. Despite capital accumulation through a growing level in domestic credit, the difference between the level of deposits and loans are being invested offshore. This reflects a large level of liquidity in the banking system and a high level of perceived risk in the FSM but also to limited opportunities given the low availability of bankable projects, minimal collateral, the cultural and legal difficulty to use land as security, and inadequate provisions to secure transactions. As in other SIDS, limited access to finance is a major constraint where only a nominal number of the population on average, including small and medium businesses, have access to the formal

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financial sector. In the FSM, the banks have thus generally extended credit to those with secure public sector jobs.

Poverty Levels

Multi-dimensional and long term indicators suggest a positive trend in quality of life for the FSM islands. In 2013, more households had access to electricity at 32 percent, compared to 24 percent in 2005, and more dwellings had improved sanitary facilities at 46 percent compared to 21 percent. From 200o to 2015, the FSM’s Human Development Index (HDI) increased 5.6 percent to 0.638 (or 127 out of 188 countries), placing it in the medium human development category. Between 1990 and 2015, life expectancy at birth increased by 3.1 years, mean years of schooling increased by 0.9 years and expected years of schooling increased by 1.6 years. GNI per capita increased by about 14.9 percent between 1990 and 2015. GNI and GNDI ($4,850) per capita were 18 percent and 53 percent higher than GDP ($3,079) in 2015.

However, poverty levels are high with the FSM having one of the highest rates of poverty among its Pacific neighbours (Figure 3). Forty one per cent of the population struggle to meetbasic needs; and 10 percent live on consumption levels below the food poverty line (less than US$1.90 per person per day). Kosrae has the lowest rate of poverty at 21 percent. Yap and Pohnpei have 39 percent, and Chuuk has the highest at 46 percent. The FSM 2013/4 Household Income and Expenditure Survey found that of the four States, basic-needs poverty is most common and most severe in Chuuk, as is the deprivation in access to electricity, water sources, schools and general assets. Yap has the highest proportion of households with poor-quality housing, and also the highest proportion with no improved sanitation. Poverty in Pohnpei and Yap is characterised by a high cost of living. In general, the Survey found that basic-needs poverty was higher for larger households and lower for households that were either headed by a male, or by individuals with education, or individuals employed in the public sector.

Sustained and substantial outmigration indicates limited employment opportunities and low-wage rates. Estimates suggest that between 15 per cent and 50 per cent of the population 11

The 15 per cent estimate is from the FSM Fiscal Year 2015 Economic Review while the 50 percent estimate is from the 11

Migration in the FSM Country Profile 2015, which states that the total number of emigrants increased from about 12,000 in 1995 and 50,000 in 2013. See Annex 7 for full details on these references.

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have migrated to US territories, Hawaii and the US Mainland, the majority of which migrated during the economic hardships at the end of the original Compact and during the public sector reductions in Chuuk and Kosrae, in 2007.

1.4 Development Prospects and Strategies: ‘Green Growth’

As a SIDS, it is clear that sustainable development in the FSM will not be attainable under the classic economic growth strategies used in larger or industrialised countries. The best available option for the FSM is to strongly pursue a development pathway of increased resilience. The country’s substantial endowment of natural resources makes this option highly viable. Indeed, the country’s long-standing identified priority economic sectors of agriculture, tourism and fisheries are all dependent on a healthy terrestrial and marine ecosystem. While the FSM's total land area amounts to only 273.3 square miles, the country covers a vast exclusive economic zone of more than one million square miles of the Pacific Ocean. Thus although characterized with the challenges of a small island developing state, it is in fact a Large Ocean State replete with opportunities. 12

Given the fragility of the FSM’s natural environment, the need for careful development planning and implementation cannot be overstated. Also, given the accelerated climate change impacts already being felt by communities and the projected increased frequency of natural disasters, the speed of committed planning and implementation will need to gain pace. The country’s SDP (2004 to 2023) has key components that are still to be implemented, for example tax reform and the mainstreaming of gender equality. The absence of systemic monitoring of SDP goals has left the status of progress largely unreported, thus requiring more leadership focus and institutional commitment to fully execute the Plan. The sectoral planning that has occurred, for example in energy, export strategy, agriculture, can be put to effective use under a more coordinated and strategically focused approach. In 2015, the FSM endorsed the 2023 Action Plan in order to revitalise development planning with a focus on accelerating economic growth and sustainable development. The Action Plan is divided into three-year goals. In the first three years, a number of achievements have been made to date. Most significant of these achievement include financing the FSM Trust Fund, which as discussed above, has performed well. The Action Plan has also been instrumental in ensuring the release of Compact infrastructure grants, enabling the release of around $150 million on infrastructure to stimulate the economy in the short to medium term.

The Action Plan, however, is more focused on economic growth and does not explicitly progress the SDP goal on productivity based on environmental sustainability. This gap in government planning and implementation in the environmental sector has largely been filled

While still in development, the term ‘Large Ocean States’ is gaining popularity to more accurately represent the 12

characterisation of island developing States in the international arena from a deficit-based model to a strengths-based approach. SIDS are custodians of 15 of the 50 largest exclusive economic zones in the world and represent almost 20 per cent of UN membership.

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by efforts from conservation non-governmental organisations (NGOs), which include a network of international, regional, national, States and community-based organisations. Namely, the Nature Conservancy, the Micronesia Conservation Trust, the YapCap environmental office, Chuuk Conservation Society, Conservation Society of Pohnpei and Kosrae Conservation and Safety Organisation. Given its community focus to conserve natural resources, NGO efforts have been significant drivers for poverty reduction and increased resilience in the FSM. For over a decade, they have been at the forefront of science-based awareness campaigns, community adaptation training as well as legislation development and enforcement. Yet given the gap in government planning, NGO efforts have largely been fragmented and under-supported both politically and financially.

Going forward, great opportunities exist to embark on ‘resilient’ or ‘green’ development that is more suited to the FSM’s unique geography, demography and economic base. Unlike the more industrialised countries which are locked into high carbon infrastructure, systems and lifestyles, the FSM has the opportunity to leapfrog old and environmentally destructive technologies. It can build a green economy that is resilient to oil prices spikes and to a changing climate, and with it, a highly adaptive society that can act as stewards of this sustainable economy.

Within this favourable setting, the FSM has the opportunity to establish climate-smart infrastructure, and mostly avoid the high cost of retro-fitting or replacing capital intensive infrastructure. Further, thanks to its established network of community and environmentally-focused NGOs, it has the opportunity to instil climate-smart social and cultural systems that ensure inclusive access not only to natural resources but also access topolitical voice, employment, information and other rights.

This CP represents an increasing acknowledgement and commitment in the FSM towards green growth, and provides a great potential for the country to meet goal number eight of the 2030 global sustainable development goals (SDGs). It takes the SDP’s ‘sustained growth’ approach to the next step of integration and reconciliation of economic-centred growth with social inclusivity and environmental sustainability; thus, from sustained growth to sustainable growth.

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With careful and committed implementation, this CP provides two major game-changing or ‘transformative’ pathways for holistic and sustainable development in the FSM (Figure 4). The first pathway is infrastructure development driven by green growth strategies. The second pathway is resilient communities and ecosystems supported by an effective network of conservation NGOs. These two paths converge through the consolidation of adaptationinitiatives across the JSAPs, IDP and ODA priorities. The convergence importantly reconciles ‘hard’, top-down economic infrastructure development with ‘soft’, bottom-up social and environmental safeguards, leading to sustainable development that is underpinned by a green economy.

Green Growth and Infrastructure Development

In response to climate change threats discussed in Section 1.1, the projects/programs pipeline (Section 2.5.1) captures critical infrastructure needs that span the main and outer-islands. The IDP estimates that it will cost $1,082 million over ten years (2016 to 2025) to deliver on these infrastructure needs. As discussed above, around $150 million of Compact funding is currently available. With sound ‘green growth’ planning as discussed in Section 1.2, and with effective coordination amongst other donors to the FSM, the GCF can contribute to ensuring that critical infrastructure needs in the FSM are designed and implemented for resilience and minimal emissions that will enable the FSM to reach, or exceed, its conditional INDC of 35 per cent GHG reduction below BAU.

Directly supporting green infrastructure development is the potential accreditation of Vital and FSMDB to the GCF. The accreditation of Vital could provide the catalyst to transition into cleaner energy supply in the FSM. Since 2008, the company has been the largest supplier of petroleum-based energy to the FSM. As part of its ten-year strategic plan (2015 to 2025), the company is exploring ways to broaden its energy mix by investing in renewable energy development, including solar and potentially, coconut biofuel. The company is also venturing into the development of coconut products, with the potential to generate $4 million annually in jobs and profits for outer-island and rural households while also potentially generating over $12 million in annual exports. The accreditation of the FSMDB could stimulate the domestic economy further by supporting investments in cleaner energy as well as in potentially profitable adaptation initiatives such as coconut products development.

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Green Communities: Strengthening Community-Driven Adaptation

Further supporting the above developments is the recent accreditation of the MCT to advance adaptation efforts from a bottom-up approach; from the community level-up. The MCT is also accredited to the Adaptation Fund, and has a comprehensive ecosystems-based program which include outer-island communities. For over a decade, the organisation has been a bridge between national, States and community decision-making levels on adaptation initiatives for the FSM; and by extension, has been directly connecting international financing with community level financing for adaptation efforts in the FSM. In this regard, the MCT can play a key role in enabling community-based access to the GCF, through smaller NGOs, by supporting the development and financing of areas relevant to MCT expertise across the pipeline of projects/programs.

Along with its numerous local NGO partners, MCT has an extensive and long-standing experience in increasing the resilience of small island communities through its on-granting mechanism. It devolves grants to State-based and other local conservation and civil society partners for capacity building and network coordination on adaptation efforts, such as climate change awareness training, vulnerability assessments and development of adaptation plans. A significant part of its sustainable financing efforts is the Micronesia Challenge program, whose endowment fund is currently around USD 19 million. The organisation is currently working with the FSM’s national and States leadership to establish processes to access the FSM’s $4.6 million portion of the Fund, while ensuring that these funds reachcommunities and support their conservation and adaptation efforts.

The climate impact potential of strengthening the capabilities of the conservation and community-based NGOs in the FSM is perhaps the most sustainable of all investments. As stewards of the country’s biodiversity and natural resources (or ‘natural resilience’), island communities are not only the end beneficiaries of climate change interventions but also the building blocks of effective adaptive capacity (see Box 1 for an example of natural resilience in Kosrae State). Yet they are the most vulnerable to the negative climate impacts, including shoreline erosion, damage to reefs and fisheries, loss of agriculture and water resources, as well as of land, homes, and public infrastructure.

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While their vulnerability have been identified in a number of policy papers, intended interventions have proven difficult to implement on the ground, largely due to current limitations in financial and effective delivery mechanisms, and particularly to those living in the rural and outer-island communities.

The recognition of the key role of conservation and other NGOs in the JSAPs indicates significant reliance on the NGO sector to implement adaptation activities. Yet, as mentioned above, limited funding and political support have constrained the capabilities of local NGOs. The accreditation of the MCT to the GCF should result in the much-needed institutional and funding strengthening of local NGOs to effectively deliver adaptation projects for, and with, communities.

Consolidating for Sustainable Development

Over the last decade, a plethora of adaptation and mitigation initiatives of various scale and focus have been implemented across the FSM States with the assistance of various agencies at the international, regional, States and community levels, and with funding support ranging from private individual donors to bilateral and multilateral donors. They are further spread across various government departments and agencies as well as across a number of NGOs. As yet, no centralised data collection and storage system is available, nor has there been a dedicated study commissioned to collate and analyse the impacts of the numerous assistance throughout the years.

This CP has come at a time when sectoral plans on infrastructure and State-based action plans on their respective development priorities, climate change and disaster risk response have been completed through the JSAPs. The large and encompassing size of GCF projects as well as the strong stakeholder engagement requirements for developing projects, has been conducive to the consolidation of around three hundred and fifteen separate initiatives into thirteen projects/program (see Section 2.3). Within the context of the two transformative pathways discussed above, the consolidation of infrastructure priorities with the more holistic development and adaptation priorities in the JSAPs sees the FSM well-placed to transition towards green, sustainable growth.

The extent to which consolidation will be impactful depends on the enabling pillars of visionary and committed leadership, effective coordination and sufficient capacity. Figure 5 13

shows how the key GCF investment approaches on transformative development, gender equality, technological innovation, and programmatic funding provide re-enforcements to these pillars. Once enabled, these pillars can propel the FSM to embark on a programmatic approach, thus in turn, enabling the country to concentrate its limited human resource capacity to fewer, albeit impactful, initiatives while also maximising access to the wider range

A detailed version on the case for the consolidation of opportunities under the GCF is available in Section 5 of the Rapid 13

Vulnerability Assessment Report, 2017.26

of climate financing opportunities beyond the GCF. More importantly, it will improve planning and coordination that will ultimately result in a high level of both institutional and community adaptive capacity across all its States.

In order to strengthen readiness and maximise access to GCF resources, leadership efforts can prioritise the development of the NAP and an accompanying Capacity Building Plan,14

with a particular focus on harnessing urgent, technical capacity that will:

• Strengthen the capacity of the Department of Finance and Administration and State-level finance departments to qualify for direct budget support from overseas development assistance as well as for accreditation to the GCF.

• Enable programmatic funding for the Country Portfolio and other multi-year, cross-sectoral adaptation and mitigation initiatives by developing an integrated adaptation framework (or NAP) while concurrently strengthening ODA coordination.

• Develop and implement a national policy on gender and vulnerable groups to enable the full realisation of the paradigm shift to low-carbon and climate-resilient development in the FSM.

With the large size of funds available under the GCF on the one hand, and the strong environmental and social safeguards required to access funds on the other, there seems a real opportunity to establish a consolidated pathway for new, clean and green development across island communities, and with that, the great possibility of a vibrant green economy.

1.5 ‘A Green and Prosperous FSM’ Strategic Framework

The sustainable development model for the FSM (Figure 4) is already well-captured in the FSM’s climate change, disaster risk management and development strategies discussed in Section 1.2. Figure 6 translates this into a strategic framework format to guide the implementation of this CP. The framework was further shaped by contributions from

For details on the Capacity Building Plan and a preliminary list of required technical capacity, see the Rapid Vulnerability 14

Assessment Report, especially pages 7, 18 and 19.27

stakeholders during the three stakeholders workshops (Table 6). See Annex 1 for a reference guide on its development.

The Vision of a ‘safe and climate resilient communities prospering in a sustainable, low carbon economy’ is in accordance with the ‘green growth’ development strategy presented inthe previous section.

The Strategic Objectives and Programs of Actionalign with both the FSM development priorities and the GCF strategic adaptation and mitigation results areas. The pipeline of 15

projects and programs (Section 2.5.1) all feed into the Programs of Action.

The Enabling Pillars capture the key areas of improvements required at the institutional level to ensure effective implementation.

TheImplementation Roadmap rests on the operational implementation of the Country Portfolio (Section 2.5); both with regards to the development and management of the pipeline projects and programs, and to the effective utilisation of the readiness and other supporting funds under the GCF (for instance, to assist in strengthening the Enabling Pillars). Following the sustainable development strategies outlined in the previous section, the main elements of the roadmap

The eight GCF results areas are included in the FSM-GCF Eligibility Assessment Form in Annex 5.15

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include: the consolidation of adaptation efforts across the JSAPs, IDP, ODA priorities; ‘green growth’, particularly through community-driven infrastructure development and clean energy investments; strengthening of the Enabling Pillars; and projects development and management, including monitoring and evaluation (M&E).

This framework thus also provides a sound basis on which to base the monitoring and evaluation of the pipeline projects/programs, once they are progressed to proposal development stage. It should be noted, however, that this strategic framework can be greatly improved with the development of a NAP to identify more concrete goals for the Programs of Action and for the Enabling Pillars.


2.1 Institutional Arrangements

The preparation of this CP was facilitated through the positioning of the NDA as per the current institutional set up in the FSM in which responsibility for environmental issues is shared between the FSM National Government and the four State Governments (Figure 7).The national government provides overall national coordination on nation-wide policies and projects. The State governments of Chuuk, Kosrae, Pohnpei and Yap are relatively autonomous and have the Constitutional mandate to take the decision-making role in the development of their respective States, including environmental management. In the FSM, country ownership is therefore determined through States ownership.

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As the Climate Change focal point for the country, the OEEM is the operational focal point for the Global Environment Facility (GEF). A number of significant climate fund engagement have been established with other government agencies. The Secretary of the Department of Finance and Administration is the NDA for the Green Climate Fund, the Secretary of Foreign Affairs is the NDA for the Adaptation Fund while the Administrator for Overseas Development Assistance (ODA) is the ‘National Authorising Officer’ for the European Development Fund’s targeted assistance on energy development for the FSM.

The Department of Transportation, Communication and Infrastructure is a key partner for all infrastructure-related priority projects in the Country Portfolio.

The Department of Resources and Development is a key partner for the priority projects on Food and Water Security and Renewable Energy. The department also oversees matters on tourism development as well as terrestrial and marine conservation and biodiversity.

The recent establishment of the CC&SD Council seeks to address these dispersed responsibilities by acting as the coordinating body for the use of climate finance in the country.

2.2 Roles and Contributions of Key Stakeholders

The Readiness Program Team developed this CP using a three-part series workshop over a nine-month period: introductory, validation and confirmation (see Table 6). The first part involved a three and half-day inception workshop to introduce and connect stakeholders with the NDA Office, thus defining roles and responsibilities to organise around the development of the CP and instilling the paradigm shift towards low-emission and climate-resilient development. The second part involved week-long consultations at the State-level to validate project/program priorities for inclusion into the CP along with supporting in-country processes. The third part involved the confirmation and endorsement of the CP and the supporting in-country processes for its implementation, across the States and national levels.

Given the challenges in securing workshop attendance, the Readiness Team undertook one-on-one meetings to supplement the inception workshop and maximise stakeholder

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knowledge on the FSM’s engagement with the GCF (Annex 2). Challenges in securing workshop attendance is expected in the FSM where both government and non-government staff are usually over-extended, and numerous policy and planning activities are fragmented. Off-island meetings and conferences add to the unavailability of key officials/representatives to attend.

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Inception Workshop (left), States Workshops (top), Final Workshop (below).

As the CP is based on already endorsed priority projects under the JSAPs, IDP and ODA Priorities of 2016 to 2018 (discussed further in Section 3.3), key stakeholders composed of those involved in the development and implementation of these initiatives. Figure 6 provides an outline of the stakeholders involved in developing the CP. Each State government has an NDA focal point who organises State-based stakeholder consultations. The focal points provided oversight of the consolidation of priority projects/programs. At the national level, the key partners provided guidance to the NDA by their respective areas of expertise. The OEEM provided guidance on climate change, water security, and disaster risk management; the ODA division on project priorities and donor coordination; DFA on the Adaptation Fund; TC&I on infrastructure; and R&D on energy, biodiversity, agriculture and food security. R&D is also currently the executing agency for the FSM Renewable Energy project being developed with the Asian Development Bank (ADB).

The stakeholder consultation process included other line departments (Health, Education, Justice), local government, civil society groups, intergovernmental organisations and the private sector. Given the large size and cross-sectoral nature of the pipeline projects and programs, their expected roles in the implementation of the CP will become clearer at the projects design and development stage.

With the support of GCF Readiness funding, the NDA has recently recruited a Projects Development Specialist to take CP processes forward with stakeholders. Given the large-scale work ahead, the NDA is also seeking additional technical assistance in projects/programs preparation, for example, by engaging expertise under the USAID Climate Ready program, and potentially under SPREP-JICA Pacific Climate Centre and NZ MFAT Technical Assistance.

During the period of CP development, the nominated national entities of the MCT, FSMDB and Vital were all focused on their respective applications for accreditation to the GCF. The MCT received accreditation only recently (July 2017) and will begin to work with the NDA and Readiness Program to access GCF financing instruments, including the Enhanced Direct Access modality. Once operational as an accredited entity, their role in the execution of relevant project areas in the Country Portfolio will be prioritised.

Table 7 below provides details of the FSM’s relationship with existing accredited entities and other relevant partners.

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Table 7. Relationships with existing Accredited Entities and Relevant Partners

Entity/Partner Name


ADB Donor. Cross-sectoral. Focus on the FSM: renewable energy, infrastructure development, public sector reform, tourism sector development.

In-country presence. Development of Climate Change Strategic Framework 2017-2030 and Country Operations Business Plan. Accredited Entity for the FSM Renewable Energy Program. Providing project preparation funding. Has existing loan with Yap State financing the windmill and solar energy pilot project.

Continue engagement with regards to other infrastructure-related projects, identified in the FSM-GCF country portfolio; also, with regards to complementing institutional strengthening assistance.

College of Micronesia (COM-FSM)

Higher education, training, climate information.

Potential Implementing Entity. Higher education facility in-country.

Continue engagement with regards to capacity building/education and training-related projects, identified in the FSM-GCF country portfolio

European Union/European Development Fund (EDF)

Donor. Renewable Energy. Disaster Preparedness.

EDF 10 provided funding for solar power in Chuuk, Kosrae and Yap; refurbish the hydropower station on Pohnpei; EDF 11 is programmed for village access to electricity/solar for Chuuk, solar and transmission line upgrading for Pohnpei, sizing transformers on Kosrae and improving the electricity access in the outer-islands of Yap. Emergency operations centres in each of the States and National government.

Dialogue on co-financing.

Government of China

Donor. Infrastructure (Roads, bridges, buildings. Agriculture.

Embassy presence. Dialogue on co-financing and provision of technical assistance.

FAO Food and Water Security Potential accredited entity for the Food and Water Security project.

Ascertain FAO’s interest to work with the FSM through dialogue.

FSMDB Development banking/finance.

Potential accredited entity for private sector and residential development.

Continue engagement with regards to private sector and housing development-related projects, identified in the FSM-GCF country portfolio

Vital Renewable Energy, Private Sector Adaptation

Potential accredited entity to support renewable energy industry development in the FSM; also to raise the economic security of outer-islands through its niche organic coconut oil venture.

Support to secure accreditation.

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Government of Australia

Donor. Gender policy development, Climate Information

Embassy presence. Pacific Women Shaping Pacific Development providing a Gender Specialist TA to the FSM; Climate Change Science Program (2008-13) produced information on FSM’s past, current and projected climate.

Dialogue on co-financing and provision of technical assistance.

Government of Japan/JICA

Donor. Renewable Energy, Infrastructure; small community buildings; Transport; Airports; waste management

Embassy presence. Existing projects: renewable energy projects under the Pacific Environment Community Fund; waste management project under JICA.

In partnership with SPREP to establish the Pacific Climate Centre.


Government of New Zealand

Donor. GCF project preparation technical assistance

Presently minimal. NZ renewable energy; extension to UAE solar farm in Pohnpei,400 kWp solar PV by 2018.


MCT Marine and terrestrial ecosystems conservation. Sustainable financing for conservation. National implementing entity for the Adaptation Fund. Accredited to the GCF.

National accredited entity. Candidate for Enhanced Direct Access under the GCF. Manages the Micronesia Challenge endowment fund. Community-based adaptation projects.

Continue engagement with regards to conservation and community development-related projects, identified in the FSM-GCF country portfolio.

IMF Fiscal management, economic reform

Supports macroeconomic reform and statistics. Fiscal sustainability, building resilience to climate change, facilitating private sector development, and promoting safe financial inclusion.


IOM Disaster Risk Management, Infrastructure; climate proof

Potential Accredited Entity. Potential Implementing Entity. Manages two USAID programs; DMRP (Disaster, Mitigation and Reconstruction Program) for the FSM and PREPARE (Disaster Preparedness for Effective Response program); CADRE (Climate Adaptation, Disaster Risk Reduction, and Education Program); Migrant Resource Centre.

Dialogue with regards to infrastructure and disaster risk management related projects, identified in the FSM-GCF country portfolio.

PRIF Infrastructure Technical Assistance

Presently minimal. Dialogue on provision of technical assistance.

SPC (Pacific Community)

GCF Readiness Program Delivery Partner, Renewable Energy/Efficiency Gender, Agriculture, Fisheries, Geoscience, Food Security, Coastal Management, Health, NDC implementation

Potential Accredited Entity. Potential Implementing Entity.

Continue engagement in the focus areas.

SPREP Regional implementing entity for the Adaptation Fund.

Accredited Entity. Implementing Entity. Executing Entity. RTSM (Regional Technical Support Mechanism) active for the FSM.

USD$ 9M for 5 years (2017 – 2021) Adaptation Fund allocation for the FSM.

In partnership with JICA to establish the Pacific Climate Centre.


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TNC Marine and terrestrial conservation. Adaptation.

Potential Implementing entity. Micronesia Challenge sponsor. Works with MCT on community-based adaptation projects.


UNDP/Global Environmental Facility (GEF)

Cross-sectoral. Biodiversity. Civil society development. poverty reduction. Disaster Risk Management. Coastal Management. Food Security. Water resource Management. NDC implementation.

In-country presence; UNDP Joint-presence Office since 2008. Has a significant and active GEF biodiversity portfolio in FSM.


US Compact Infrastructure, Health, Education, Environmental Management. Private Sector development.

First Compact (1987 to 2003). Second Compact (2004 to 2023). Public service delivery. Critical infrastructure support. Banking supervision through FDIC. FSM-US open migration policy.

Dialogue on co-financing. Continue engagement in the focus areas.

US Federal Grants

Public and preventative health, supplementary education programs, FDIC, USDA

Supplementary development grant programs to support the US Compact sectors.

Dialogue on co-financing. Continue engagement in the focus areas.

UAE Donor. Renewable Energy

600 kWp solar PV; project is completed. Dialogue on co-financing and provision of technical assistance.

USAID Institutional Strengthening on climate finance; GCF-related technical assistance

In addition to its work with the IOM, provides project preparation and implementation support through the Climate Ready program (in-country presence); and institutional strengthening support through the ISAAC program.

Coordination with Climate Ready program to progress project development work as per the FSM-GCF Country Portfolio.

World Bank Group

Donor. Cross-sectoral, with a focus on private sector development, fiscal management and infrastructure.

Country Partnership Framework (CPF). Active projects include energy sector development, ICT development, Safety and sustainability of maritime services, public financial management improvement, fisheries revenue management, coastal fisheries development, poverty analysis.

Continue dialogue/ engagement/coordination of the CPF focus areas.

WHO Health. Technical Assistance.

In-country presence. WHO Continue engagement in the focus areas.

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2.3 Identification of Country Priorities for the GCF

The CP is based on endorsed priority projects planned under the JSAPs, IDP and ODA Priorities. These have been channelled through the bi-ennial ODA Priorities submission process for 2016 to 2018, which ensures country ownership alignment (from States to national; from national to international donors, such as the GCF). Figure 8 shows the projects/programs prioritization methodology.

Prior to consolidation, there were one hundred project concepts across the JSAPs (24 for Yap, 21 for Chuuk, 25 for Kosrae, 30 for Pohnpei), and two hundred and eleven project concepts in the IDP (53 for Yap, 35 for Chuuk, 33 for Kosrae, 57 for Pohnpei). Within the ODA bi-ennial submission process are additional projects which were not identified in the JSAPs or IDP but which are nonetheless endorsed as State or nation-wide priority projects and have thus been incorporated into the JSAP and IDP consolidation process. These included the Human Resource Development for Health and Education project, the establishment of a National Diagnostic Facility located in Pohnpei State, a pilot project on Supporting Entrepreneurs and Enterprise Development project, Sport Facilities improvement in Chuuk State and Tourism Sector Development in Pohnpei State (see Annex 3 for the full list on ODA Priorities).

As part of the validation workshop, the CP Consultant facilitated a ‘first-cut’ consolidation exercise across the JSAP, IDP and ODA priorities for each State. A total of 13 large scale projects were identified (4 nation-wide, 3 for Yap, 1 for Chuuk, 3 for Pohnpei, 2 for Kosrae). At the time of the exercise (March 2017), the Chuuk JSAP was not yet endorsed and 16

therefore only projects under the Chuuk IDP and ODA priorities were included in the consolidation. The States were also able to validate three of the four nation-wide projects which were submitted to the GCF as indicative priority projects prior to the development of the CP: Food and Water Security Program, Renewable Energy Program and the Inland Road project for Kosrae State. The fourth project on Technical Assistance for Climate Proofing Infrastructure has been re-worked to include a green growth approach. It remains as an

The Chuuk JSAP was endorsed in August 2017.16

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activity under the Readiness program in the Country Portfolio (Section 2.5). The project prioritization methodology enabled a retrofit of these four priority projects, thus bringing them into coordination and consolidation with the more recently identified projects.

The consolidated projects were identified as part of a larger FSM-GCF Proposal Approval Process (Annex 4) that ensures early alignment of the GCF’s required strategic impacts across the mitigation and adaptation areas. For each consolidated project, the project proponent is required to complete an FSM-GCF Eligibility Assessment Form (Annex 5), which provides the opportunity for an alignment rating across both FSM development priorities and the GCF impact results areas. Only projects with a satisfactory rating are advanced through to inclusion into the CP. Given the centrality of climate change considerations in the JSAPs and IDP, all consolidated projects rated highly.

It is important to note that with the exception of the FSM Renewable Energy Program, all projects are at ‘Ideas’ stage, with partner Accredited Entities yet to be identified and selected, and further scoping, sector-wide analysis and stakeholder consultations yet to be conducted. The ratings are therefore based on perceived or expected impacts, which are to be designed into the projects/programs as they are developed into full proposals. Similarly, fuller alignment with GCF policies, particularly with the GCF investment criteria, will be designed 17

into the projects. At this stage, all other complementing financing options will be explored, including options for leveraging the private sector.

As per the Country Portfolio in Section 2.5, the FSM has urgent, large scale needs to achieve resilient and transformative development. The GCF has a comparative advantage relative to other donors particularly in the area of grants-based, large-scale finance dedicated to adaptation and mitigation that are commensurate with both the country’s needs and its present financial management capacity. As exemplified in this CP, it is already proving to be a consolidating force for the large numbers of adaptation priority projects across the FSM States; prior to the GCF-funded validation workshops, many officials and other stakeholders in the States were not aware of the projects under the JSAPs, IDP and ODA priorities list.

2.4 Private Sector Engagement

While private sector mobilisation is a key part of the GCF agenda, the extent of private sector engagement in the context of the FSM is currently limited to projects/programs which have a private sector development component, rather than for projects that are generated by private sector actors. As outlined in Section 1.3, the private sector in the FSM is relatively small and under-developed. In this regard, the opportunities to mobilize private-sector led projects and

The GCF has six criteria in its investment framework: climate impact potential, paradigm shift potential, sustainable 17

development potential, needs of the recipient, country ownership, efficiency and effectiveness.

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co-investments with corporations under the GCF Private Sector Facility is currently outside of the scope of private sector capabilities in the FSM. However, this situation may change with the possible accreditation of Vital and the FSMDB in the coming year.


The country portfolio is organised into two sections. Section 2.5.1 presents an overview of the pipeline for projects and programs. These are, in turn, organised into nation-wide and States-level subsections. Table 9 provides a summary of the pipeline projects/programs. Section 2.5.2 presents an overview of pipeline activities related to project/program preparation, to the country readiness program, and to the accreditation of nationally nominated entities.

2.5.1 Country projects/programs pipeline

Initial approach to prioritization

With the exception of the FSM Renewable Energy Program, all pipeline projects are at ‘Ideas’stage (refer, Figure 9).

At this ‘initial’ programming stage of the CP, prioritization is based on the readiness of project proponents to develop their respective projects/programs. Once climate impact potential of projects have been made clearer during the projects development stage, additional criteria can be added to the prioritization process, such as: climate impact or ‘transformative’ potential and urgency of need. During the projects development stage, the foregrounding of climate impact potential of projects/programs can be supported in three ways: 1. through the confirmation of the preliminary scoring/assessment on the GCF Impact results areas in the EAForm; 2. through their alignment with the Programs of Action under the Strategic Framework; and 3. with the development of the GGS and the NAP that would then make available any green growth and sectoral data analysis/quantification in relation to climate impact scenarios.

The Readiness Program will facilitate the next steps for selecting appropriate accredited entities.

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Initial approach to sectoral considerations

Sectoral consultations were not found to be applicable in the development of this initial CP for two reasons. Firstly, the small size of the FSM on the one hand, and the current fragmented management of a large number of climate change and development initiatives on the other, renders attempts at ‘transformative development’ to be necessarily cross-sectoral. The consolidation process of priority projects across the IDP, JSAPs and ODA priorities was thus cross-sectoral in nature, resulting in for example, the activities under the priority sectors of fisheries and agriculture being consolidated under the ‘Food and Water Security’ program. Secondly, as discussed in Section 1.4, there has been limited, coordinated sectoral planning undertaken in the FSM to date. However, the sectoral data analysis/quantification in relation to climate impacts and scenarios as part of the development of a NAP along with the information needs of the design process of the priority projects, should strengthen sectoral planning in the FSM in the near future.

Initial approach to consolidation

Yap State’s “Resilient Transport and Private Sector Development in the Main and Outer- islands of Yap Program” is a consolidation of its Resilient Outer-islands Transport Response and Private Sector Development ($15, 259, 058) and Resilient Transport and Private Sector Development ($81,120,215) projects. The “Resilient Infrastructure for Health and Education Delivery Program” is a consolidation of its Resilient Health Infrastructure project ($13,729,704) and Resilient Education Infrastructure project ($10,3297,04).

The Chuuk State project is a consolidation of 12 separate projects under its IDP. At the time of consolidation, the Chuuk JSAP was not yet endorsed and was therefore excluded. Inclusion can be undertaken at the projects development stage.

Further consolidation or re-arrangement of activities within these projects are probable at projects development stage.

Cost-estimate considerations

The total financing required for the pipeline projects/programs is approximately US$1.4 billion over the next seven years to 2024. This amount is over five times the national GDP for 2015, and as an overall cost, would not be eligible for GCF financing. At present, GCF financing is confined to the climate impact aspects of infrastructure projects, such as making infrastructure and roads climate-resilient. Co-financing arrangements along with improved government fiscal revenue-making and more effective use and access of both Compact and non-Compact grants is expected to cover the gaps in total financing. Improved fiscal management can ensure that fiscal surplus (primarily from fishing fees and corporate tax earnings) is used to invest in adaptation and green growth efforts. Improved access to Compact grants will see a rise in capital grants, particularly around the $150 million worth of

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infrastructure grants in the coming years. Improved access to non-Compact grants is possible through improved coordination of overseas development assistance.

It is important to note also that total financing is based on estimated costs which are likely to be outdated at the time of projects development given that the JSAPs and IDP were completed in 2015. Significant fluctuations in estimated costs should also be expected at the time of developing the projects given that some projects will either no longer be required due to having been fully financed by another fund/s, or have been completed. Technical factors may also see that some projects are no longer relevant or need to be re-designed.

Table 8: Summary of Priority Projects/Programs

Jurisdiction Consolidated Projects Estimated Cost

Nationwide 1. FSM Food and Water Security Program $10,000,000

2. FSM Renewable Energy Investment Program $125,000,000

3. FSM National College Resilient Infrastructure Development Program $63,838,000

4. Nation-wide Climate Change and Disaster Risk Management Coordination and Communications Program $43,284,549

Total: $242,122,549

Yap State 1. Resilient Transport and Private Sector Development in the main and outer-islands of Yap Program $92,660,703

2. Yap Renewable Energy Investment Program Phase 3 $95,913,219

3. Resilient Infrastructure for Health and Education Delivery Program $13,929,704

Total: $202,503,626

Chuuk State 1. Chuuk State Resilient Critical Infrastructure Program $349,173,472

Total: $349,173,472

Pohnpei State 1. Pohnpei State Resilient Critical Infrastructure Program $141,871,976

2. Pohnpei State Resilient Social Protection Program $25,305,659

3. Pohnpei State Resilient Tourism Development Program $3,198,090

Total: $170,375,725

Kosrae State 1. Kosrae State Inland Road Completion Project $35,966,000

2. Building Resilient Communities in Kosrae State Program $97,200,364

Total: $133,166,364

Overall Total: $1,446,515,208

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Table 9: Country Projects/Programs Pipeline

Nation-wide: 4 programs in total

Project Title Description AE Submission timeframe

FSM Renewable Energy Program

This is a component of the ADB Pacific Islands Renewable Energy Investment Program (approved by the GCF in Dec 2016).

This project component for the FSM, involves two program support and technical assistance for the following projects:

For Yap: Upscale Renewable Energy: 2 wind turbines (2x275kW), battery storage + Adaptation/Upscale Renewable Energy: 1.5MW floating solar. For Chuuk: Improved Energy Access: 9 solar-diesel hybrid systems, solar home systems. For Pohnpei: Upscale Renewable Energy: 9MW Pohnlangas Solar, 5.5MW Lehnmesi/Nankawad Hydropower, battery. For Kosrae: Upscale Renewable Energy: 0.5MW solar, Adaptation: 42km distribution grid replacement/relocation.

This program contributes to the following ‘programs of action’ under the ‘Green and Prosperous FSM Strategic Framework’: Economic Resilience, Energy Security, Infrastructure.

ADB Q4 2018

GCF strategic impacts

Total financing: $125m

Status: PROPOSAL stage

Mitigation: 1,3Adaptation:5,6,7,8

GCF: $106m:15m for Yap, 55m for Pohnpei, 23m for Chuuk, 13m for Kosrae

Other: ADB grant: 4m; 1 for each state. FSM Gov: Yap State: 1m, Pohnpei 12m, Chuuk, 1m, Kosrae, 1m.

NOL issued for ADB, 6 Oct.

Issued RFP in Apr 2017. ADB to begin in-country proposal preparation in May /June 2017.

Actions Lead Timeline

Proposal development FSM R&D and AE(ADB) Start: Q2 2017, Complete: Q4 2018


FSM Food and Water Security Program

This project aims to address food security and its critical linkage with water security, its objectives being to: to improve food and nutrition security of vulnerable populations; promote value addition and product diversification strategies; and improve access to clean water. It will build on lessons and practices learned from pilot projects on food and water development funded by the GCCA, PAAC, FAO.

This program contributes to the following ‘programs of action’ under the ‘Green and Prosperous FSM Strategic Framework’: Economic Resilience, Food and Water Security, Education, Health and Social Protection.

FAO (TBC)TBA


Total financing: TBA

Status:IDEAS Stage

Adaptation:5,6,7,8

GCF: Other:

TBA TBA

Preliminary scoping.

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Submit completed FSM-GCF Eligibility Assessment Form to the NDA

R&D ASAP


FSM National College Resilient Infrastructure Development Program

The College of Micronesia (COM) provides accredited post-secondary education from six campuses across all the FSM States. The COM has prepared a Master Plan which sets out the development strategy for achieving the educational and community goals/vision for higher education in the FSM. Infrastructure is a major component of this Plan, with 20 of its most urgent infrastructure needs identified as priority projects in the FSM National IDP.

This program contributes to the following ‘programs of action’ under the ‘Green and Prosperous FSM Strategic Framework’: Economic Resilience, Education, Infrastructure.

TBATBA


Total financing: $63,838,000

Status:IDEAS Stage

Adaptation:5,6,7,8

GCF: Other:

TBA TBA

‘Idea’ stage; seeking assistance for project development.


Engage projects development assistance

TC&I ASAP


Nation-wide Climate Change and Disaster Risk Management Coordination and Communications Program

The program will enhance the capabilities of the national government to coordinate climate change and disaster risk management under three project components: 1. Improved telecommunications services; including a 24/7 disaster/emergency alert capability connecting the outer-islands with the Capital; and video conferencing capabilities for each branch of each national and State Governments 2. Improved national government facilities and implementation of the Micronesian Village project, which will provide a complex within which intergovernmental

TBATBA



Status:IDEAS Stage

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Adaptation:5,6,7,8

p gand other non-government organizations from both the national and international community can be co-located for centralised and efficient coordination of international assistance on climate change response.3. Improved States and National-level coordination on climate change and disaster risk management.

This program contributes to the following ‘programs of action’ under the ‘Green and Prosperous FSM Strategic Framework’: Infrastructure.

GCF: Other:

TBA TBA




TC&I ASAP

Yap State: 3 programs in totalProject Title Description AE Submission

timeframe

Resilient Transport and Private Sector Development in the Main and Outer- islands of Yap Program

Major infrastructure development critical to enable connected and resilient private sector growth on whole of islands (ie both in the main and outer-islands of Yap), while also enabling improved transport to climate change and disaster management response. For the infrastructure component, project scope includes: main island airport and marine port improvements, Fais Island airstrip improvement, replacement of bridges and a multi role vessel for outer-islands transport and Septic tank improvements for the outer-islands. For the private sector development component, scope includes enhancement of the business environment, especially in the tourism sector. The program will set the standards for critical private sector growth infrastructure that is highly adaptive to climate change while also contributing to the emergence of a green growth industry in Yap State.

This program contributes to the following ‘programs of action’ under the ‘Green and Prosperous FSM Strategic Framework’: Economic Resilience, Infrastructure, Waste Management and Sanitation.

TBA Q2 2018


Total financing:$92,660,703

Status:

Adaptation: 5,6,7,8

GCF: Other: TBA TBA




Yap State GCF Focal point August 2017

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Yap Renewable Energy Investment Program Phase 3

This project supplements and builds on the IDP phases 1 and 2 renewable energy projects (currently under development with the ADB for GCF support). The project will enable a more complete response to Yap State's Renewable Energy infrastructure by 2025. Scope includes improving energy efficiency and renewable energy use in water supply and transport infrastructure (in the State’s IDP), and the development of an overall renewable energy sector growth program as a result of the developments in infrastructure.

This program contributes to the following ‘programs of action’ under the ‘Green and Prosperous FSM Strategic Framework’: Economic Resilience, Energy Security, Infrastructure.

ADB (TBC) Q2 2018



Status

Mitigation: 1,2,3,4Adaptation: 6,7,8

GCF: Other: TBA TBA






Resilient Infrastructure for Health and Education Service Delivery

The program’s aim is to enhance health and education delivery in the Yap main and outer islands through improved wastewater and solid waste infrastructure and through replacement and improvement of bridges. The project will set the standards for critical public service infrastructure delivery that is highly adaptive to climate change while also contributing to the emergence of a green growth industry in Yap State.

This program contributes to the following ‘programs of action’ under the ‘Green and Prosperous FSM Strategic Framework’: Economic Resilience, Education, Health and Social Protection, Waste Management and Sanitation, Infrastructure.

TBA Q2 2018



Status

Mitigation: 1,3,5Adaptation: 5,6,7,8

GCF: Other: TBA TBA





Chuuk State: 1 program in total


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Chuuk State Resilient Critical Infrastructure Program

The program covers the critical infrastructure needs of Chuuk State as identified in the State’s IDP. Program scope covers five project streams: 1. Outerislands critical infrastructure 2. Transport 3. Roads 4. Solid Waste Management 5. Renewable Energy. The program will enhance Chuuk’s urban and outerislands infrastructure resiliency in the critical areas of transport, solid waste management, roads improvement and clean energy use. The program will set the standards for critical public service infrastructure delivery that is highly adaptive to climate change while also contributing to the emergence of a green growth industry in Chuuk State.

This program contributes to the following ‘programs of action’ under the ‘Green and Prosperous FSM Strategic Framework’: Economic Resilience, Education, Health and Social Protection, Waste Management and Sanitation, Infrastructure, Energy security.

TBA Q2 2018



Status

Mitigation: 1,2,3Adaptation: 6,7,8

GCF: Other: TBA TBA




Chuuk State GCF Focal point August 2017

Pohnpei State: 3 programs in totalProject Title Description AE Submission

timeframe

Pohnpei State Resilient Critical Infrastructure Program

The program covers the critical infrastructure needs of Pohnpei State as identified in the State’s IDP. Program scope includes the sub component sectors of Water, Solid waste management, Roads and Bridges, Health and Education Facilities, Transport, as well as infrastructure relating to Marine Safety and Outerislands response. The program will enhance Pohnpei’s urban and outer-islands infrastructure resiliency in the critical areas of transport, solid waste management, roads improvement and clean energy use. The program will set the standards for critical public service infrastructure delivery that is highly adaptive to climate change while also contributing to the emergence of a green growth industry in Pohnpei State.

TBA Q2 2018



Status

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Mitigation: 1,2,3,4Adaptation: 5,6,7,8

This program contributes to the following ‘programs of action’ under the ‘Green and Prosperous FSM Strategic Framework’: Economic Resilience, Education, Health and Social Protection, Waste Management and Sanitation, Infrastructure, Energy security.

GCF: Other: TBA TBA




Pohnpei State GCF Focal point August 2017


Pohnpei State Resilient Social Protection Program

The project will enhance the adaptive and response capacity of the social sector in Pohnpei State. Project scope includes the sub-component sectors of the Environment, Social Protection, Health and Education, with Coordination for Climate Change and Disaster Risk Management cutting across the subsectors. The program will develop the social-cultural capital of the State to become highly adaptive to climate change while also contributing to the emergence of a green growth industry in Pohnpei State.

This program contributes to the following ‘programs of action’ under the ‘Green and Prosperous FSM Strategic Framework’: Health and Social Protection, Waste Management and Sanitation, Infrastructure.

TBA Q2 2018



Status


GCF: Other: TBA TBA






Pohnpei State Resilient Tourism Sector Development project

The project will enable the development of environmentally friendly tourism industry in Pohnpei State. Project scope includes development of a green growth strategic plan, accompanied by legislative/tax incentives; supporting entrepreneurs and enterprise development in agriculture-based products to serve the tourism industry; and ensure that infrastructure d l i i

TBA Q2 2018



Status

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development at tourism sites are eco-friendly. Project outcomes include increased economic resiliency along with improved preservation of heritage and nature conservancies in the State.

This project contributes to the following ‘programs of action’ under the ‘Green and Prosperous FSM Strategic Framework’: Economic Resilience.

GCF: Other: TBA TBA





Kosrae State: 1 project and 1 program in totalProject Title Description AE Submission

timeframe

Kosrae State Inland Road Completion Project

This project will enable the completion of Kosare’s inland road adaptation strategy as per the Kosrae Shoreline Management Plan (2013). A portion of the road repositioning project is already funded by the Adaptation fund. Remaining road portions include: 1. Malem-Yeseng-Pilyuul tar sealing, 2. Mutunnenea-Sialat upgrade to tar seal, 3. Malem-Pilyuul tar seal, Sialat-Yekula upgrade to tar seal, 4. Cross Island Road, Utwe-Walung & Pilyuul-Tenwak upgrade to tar seal. Project scope will further include: • Transitional revetment defences, specifically the highest priority defences at Mosral and Paal to enable the only road access to the villages of Utwe and Walung to remain passable until the inland road is constructed (KSMP section 5.1.2) • Development of a relocation strategy,

including incentives to relocate to safer areas.

This project contributes to the following ‘programs of action’ under the ‘Green and Prosperous FSM Strategic Framework’: Economic Resilience, Infrastructure and Settlements.

TBA Q2 2018



Status


GCF: TBA

Other: AF:2.9m




Kosrae State GCF Focal point August 2017


Building Resilient Communities in Kosrae State Program

This program implements Kosrae’s whole of island adaptation plan as per the Kosrae Shoreline Management Plan (2013). Following closely the eight strategies in the Plan, the program will cover the vulnerable

TBA Q2 2018

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Section 2.5.2 Pipelines for Project Preparation, Country Readiness Program and Accreditation

Table 10: Country Projects/Programs Preparation Pipeline


sectors in Kosrae State which include health, education, environment, infrastructure (not including the completion of the inland road project which is under a separate application for GCF support), social and cultural and private sector. The program will set the standards for infrastructure development that is highly adaptive to climate change while also contributing to the emergence of a green growth industry in Kosrae State.

This program contributes to the following ‘programs of action’ under the ‘Green and Prosperous FSM Strategic Framework’: Economic Resilience, Infrastructure and Settlements, Waste Management and Sanitation, Health and Social Protection, Education.


Status


GCF: Other: TBA TBA




Kosrae State GCF Focal point August 2017


Promotion of energy efficient appliances, lighting and equipment in Pacific Island Countries

Regional project in the Pacific involving a number of countries (10). It is the upscale of the Pacific Appliance Labeling and Standards Project. It focuses on appliances and retrofitting of buildings.

UNEP Q2 2017


Total financing: TBA

Status

TBA GCF: Other: TBA TBA

E O I I s s u e d 1 7 October; NOL to be reviewed by the CC & SD Council.


Confirm whether this project is appropriate for the FSM. If affirmative, NOL to be reviewed by the CC & SD Council.

R&D, through the SD&CC Council Steering Committee.

June 2017

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Table 11: Country Readiness Program Pipeline

Title Description Delivery Partner Submission timeframe

NDA Strengthening and development of a Country Program

Readiness is focused on strengthening NDA’s capacity by establishing:

1. in-country processes to deliver core functions, including stakeholder stewardship, accreditation support and approvals of programs and projects for efficient engagement with the GCF.

2. a ‘no objection’ procedures to guarantee country ownership of GCF-funded projects.

3. stakeholder engagement processes in relation to strategic priorities for engagement with GCF through a ‘live’ Country Program that is annually reviewed.

SPC August/September 2017 for the Country Program

Total financing: $413,110

Status

GCF: $300,000

Amendment: additional $113,110 for the Projects Development Specialist

Country Program completed. Projects Development Specialist recruited.


Amend Grant Agreement to include funds for a Projects Development Specialist to expedite development of project ideas in the Country Program portfolio.

NDA Feb 2017 (completed)

Recruitment of a Projects Development Specialist

SPC September 2017 (completed)

Assessment exercise using the Capacity Assessment Template

NDA June 2017 (completed)

States Validation Workshop of country priority projects, proposal generation processes, including establishment of a steering committee for projects/program country level review and approval

NDA April 2017 (completed)

Country Program Submission

NDA Q3 2017 (completed)


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Accreditation support to MCT

Micro, non-profit, seeking accreditation for Project Management and Granting.

Developing an action plan to meet the ESS, gender and fiduciary standards for GCF accreditation.

PwC April 2016 –March 2017


$37,000 Action Plan Completed. Accreditation application successful.


Action Plan submitted by PwC

PwC October 2016

Submit full application MCT March 2017


Accreditation support to FSMDB

Micro, development national bank, seeking accreditation for Project Management, Granting, Lending, Blending.

Developing an action plan to meet the ESS, gender and fiduciary standards for GCF accreditation.

PwC April 2016 –June 2017


$37,000 Action Plan Completed. Accreditation application in progress.


Action Plan submitted by PwC

PwC November 2016

Title Description Delivery Partner Implementation timeframe

NAP – 1. Green Growth and Climate Proofing Infrastructure TA.

The NAP funding umbrella can address this priority:

A TA to institutionalize climate proofing and green growth strategies in the design of the infrastructure-related projects in h f l h ll k

PRIF (TBC) As soon as PMU and PMO set up is complete - approx. Sep 2017.

Total financing: USD Status

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Table 12: Accreditation Pipeline

the Country Portfolio.The TA will work with, and across, the project management unit and State project management offices to enable effective implementation.

TBA


Involve DTC&I in the priority projects validation workshops at State level to raise understanding of needs with regards to the TA.

TC&I March/April 2017 (completed)

Finalise TOR for Green Growth Specialist to enable recruitment

TC&I October 2017

Title Description Delivery Partner Implementation timeframe

NAP – 2. National Adaptation Plan

The NAP funding umbrella can address this priority:

Develop a National Adaptation Plan (NAP) on Climate Change and Disaster Risk Management. The NAP will provide the FSM with a reference framework to define targets, and ensure a balanced approach in adaptation planning and implementation across the States. Balanced and coordinated action is required across adaptation and mitigation actions; across States; across sectors; and across prioritisation needs between short term, near term and long term strategies and actions. The NAP can also include strategies to address policy, data and capacity gaps to strengthen access to global climate finance for adaptation and mitigation priorities.

TBA Aug 2017 to Aug 2018

Total financing: USD Status

TBA In progress


Confirm OEEM’s commitment to lead the NAP development

NDA June 2017 (completed)

Finalise TOR for NAP Specialist to enable recruitment

OEEM October 2017

Entity Name

Type Action Lead Timeline

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3. Country Program Implementation and Sustainability Plan

3.1 Implementation Timeline and Institutional Arrangements

CP implementation begins immediately with oversight from the NDA and with the following guidance to:

MCT Micro, non- profit conservation organisation

Accredited. MCT July 2017

FSMDB Micro, development national bank.

Engage support of USAID Climate Ready program to assist in addressing gaps identified by PwC Report i.e. strengthening accounting procedures and procurement.

FSMDB September 2017

Vital SOE, largest energy/oil supplier in the FSM

Nomination letter submitted, March 2017. Awaiting response from GCF.

NDA ASAP

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1. progress the projects/programs pipeline on an ‘as ready basis’.

2. facilitate any further consolidation or rearrangement of projects/programs in the pipeline.

3. update the other areas of the Country Portfolio regarding requests to access resources under the FSM-GCF Readiness Program, including accreditation assistance and project preparation on an ‘as needs basis’.

4. develop a Communications Strategy by March 2018, ready for implementation by April 2018.

5. facilitate the completion of the M&E results framework for this CP across the States and National government in August/September 2018.

6. ensure that this CP is updated in September/October 2018, and yearly thereafter.

7. ensure that State and National consultations are undertaken as part of the annual update of the CP.

The institutional arrangement for implementation of the CP is based on the implementation roadmap of the Strategic Framework (Section 1.5). As per Figure 10, the NDA and GCF State Focal Points will manage the CP’s M&E system. The agencies responsible for keeping the IDP, JSAPs and ODA Priorities updated will inform projects design and development over the course of proposal development. The State Governors and the CC&SD Council represent the enabling pillar of ‘leadership’, ensuring that coordination and capacity needs are met. The NDA and the CC&SD Council represent the pillar of ‘coordination’, ensuring that coordination occurs at the high levels of government as well as at the operational level of the CP. The NDA and ODA division represents the pillar of ‘capacity’, ensuring that funding for capacity needs are coordinated.

Accountability for implementing the CP and its M&E results framework at State level lies with the State Leadership and the State GCF Focal Points.

Accountability for implementing the CP and its M&E results framework at national level lies with the NDA. The NDA will assume the overall program coordination role, working closely with the State GCF focal points and its key national government partners: OEEM, ODA, DFA, R&D and TC&I (PMUs/PMOs).

Accountability for ensuring that the CP is fully implemented lies with the CC&SD Council.

3.2 Reporting

Following the institutional arrangement above, the State GCF focal point reports to the State Governor. The NDA reports to the CC&SD Council. The CC&SD Council reports to the President of the FSM.

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Reporting includes an annual report on the M&E results. The M&E framework is detailed below.

3.3 M&E System: Results Framework and Context

The results framework for this CP consists of a Master framework and States and national-based frameworks. It has three main monitoring areas: strategic, institutional and administrative. Strategic monitoring involves the progress made towards ensuring that State-based and nation-wide plans supporting climate change adaptation and infrastructure are developed and/or up to date. Institutional monitoring refers to the progress made on the enabling pillars of leadership, coordination and capacity. Administrative monitoring involves the progress made of projects/programs towards a No Objection Letter (NOL).

Accountability for ensuring that projects are progressed will lie with the ‘executing agency’ ofthe project or program. The ‘executing agency’ will assume the executive decision-making role, working closely with the NDA, and if a State-based project, with both the NDA and the State GCF focal point. The ‘executing agency’ will also assume the executive decision-making role for engagement of accredited entities. For example, the FSM Department of Resources and Development is the executing agency of the FSM Renewable Energy program, while the Accredited Entity is the Asian Development Bank, and the implementing entities are the State power utilities.

The States and national-based frameworks feed into the Master framework. The States-based results framework are maintained by the State GCF Focal Points. The national-based and Master framework are controlled and maintained by the NDA. The template spreadsheet of the Master and States-based results frameworks is in Annex 6.18

The M&E results framework is to be understood within a ‘pre-climate impact results’ context. At this ‘readiness stage’ of the CP, the results being measured are not based on projects performance. Rather, they are foundational results; those that provide the basis to deliver on the eight GCF strategic impact mitigation and adaptation result areas (or GCF Results Management Framework). A new framework will need to be established once the pipeline 19

projects and programs are producing results. Each project or program will then have its own M&E results framework which incorporate the requirements under the GCF Results Management Framework. The country will thus be ‘ready’ to fully contribute to greater adaptation and mitigation goals once projects and programs are rolled out.

The working template is available through this link: https://drive.google.com/file/d/18

0B4svg2MiNAycNTFpNWFJZnVpMUE/view?usp=sharing

For a copy of the latest iteration of the GCF Results Management Framework, contact the the GCF Country Program 19

Liaison Officer for the FSM.54

3.4 Management Needs

The ongoing management of the CP requires staffing of the NDA office to progress the development of the Country Portfolio and associated processes, which have been established in this first year of the readiness phase.

At a minimum, a long term position for an FSM-GCF Program Coordinator or similar, is required. This position would oversee the day to day operations and coordination needs of the NDA office, including the ongoing update of the Country Portfolio and the administration of the FSM-GCF Proposal Approval Process. The position would also mobilise assistance to undertake the annual review and update of the CP, and ensure that the CP Review Log, located at the start of this document, is to be completed after each annual review, or earlier as required.

A short term consultant with expertise in program management and M&E is needed to support the update of the CP with any new developments related to economic circumstances and climate change issues, new information on the viability or costs of the Country Portfolio options, and other matters of relevance such as:

• Updating and refining of the Strategic Framework with a completed NAP, or as required by more current needs;

• Updating the M&E System and associated templates and processes;

• Visiting each State to conduct monitoring and provide training to refresh State-based users of the M&E system, and to facilitate completion of the States-based M&E results framework.

Implementation of the CP is stakeholders-driven, and as such necessitates the development and implementation of a Communications Strategy in the coming months of readiness activities. The Communications strategy would assist in coordination between the States and national governments and stakeholders, while providing much needed education and awareness to the greater public to build understanding and support for the implementation and sustainability needs of the CP. The strategy would include a built-in communications M&E results framework to monitor and assess the effectiveness of outreach modes and materials including media articles and broadcasting outputs.

3.5 Mechanisms for Keeping the Future, Present:

The two re-enforcing mechanisms for CP implementation and sustainability are the CC&SD Council and the M&E system. As the body responsible for the successful implementation of the CP, the CC&SD Council ensures that this Implementation and Sustainability Plan is appropriately funded and adjusted as necessary for relevance and for continued active engagement by key stakeholders. The annual M&E reports serve to guide Council support.

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Annexes

Annex 1: Reference Guide on the Development of the Strategic Framework

The CP strategic framework follows a ‘green growth' development pathway. The formulation of the framework is based on the policy frameworks, laws and regulations and planning documents on climate change and sustainable development in the FSM, primarily deriving from the Nation-wide Integrated Disaster Risk Management and Climate Change Policy, the Joint State Actions Plans for Disaster Risk Management and Climate Change and National Infrastructure Development Plan.

Vision

Vision 2025 sees the FSM achieving sustainable development by transforming into a climate-smart society that thrives in a low carbon economy.

The vision was distilled from the 2013 Nationwide Disaster Risk Management and Climate Change Policy’s (CC Policy) Goal and Policy Statement, which aligns with the FSM Strategic Development Plan 2004 to 2023, and with the JSAPs.

Guiding Principles

The guiding principles follow those of the CC Policy:

• safeguard the development of FSM’s people, resources and economy, now and in the future, to the risks posed by a changing climate and the range of natural and human-made hazards

• pro-active integration of disaster risk reduction, climate change adaptation and climate change mitigation considerations into relevant national, sectoral, state and community-level development strategies and programs.

• holistic, integrated, community and ecosystem based ‘ridge to reef’ approach to risk reduction and natural resources management to ensure that adaptation measures are socially and ecologically sound.

• inclusive development with attention to issues on gender-responsive development, the needs of marginalized groups, such as small atoll communities, the disabled, youth and the elderly

• recognition of the rights of island communities to their ancestral lands, while acknowledging the role that migration has played, and will continue to play, as an adaptation strategy to a changing environment.

• Adopting the ‘building back better’ approach in recovery and reconstruction programs following loss and damage caused by natural and human-induced disasters.

• Honours regional and international commitments, notably the Pacific Disaster Risk Reduction and Disaster Management Framework for Action 2005 – 2015 (RFA), the Pacific Islands Framework for Action on Climate Change 2006 – 2015 (PIFACC), the international Hyogo Framework for Action: Building the Resilience of Nations and Communities to Disasters 2005 – 2015, and the United Nations Framework Convention on Climate Change (UNFCCC).

Strategic Objectives

The Strategic Objectives follow those of the CC Policy. However, for implementation purposes, the strategic framework places Capacity Building and Enabling Environment in under ‘Enabling Pillars’:

1. Public Awareness

Develop and disseminate education materials on climate change and disaster risk reduction and integrate these materials through intermediate, primary and secondary education curriculums.

Promote, facilitate and implement public and political awareness programs on disaster risk reduction and climate change and its effects at national, state and community levels.

2. Disaster Risk Management

Use existing and new policy and planning instruments, resources and capacities to reduce, or eliminate, the risks associated with the adverse effects of hazards through activities and measures for prevention, (hazard) mitigation and preparedness, response, recovery and reconstruction.

3. Climate Change Adaptation

Enable adjustments in natural and human systems in response to actual or expected changes in the climate or its impacts in order to moderate harm or exploit beneficial opportunities.

Adapt development and economic activities to gradual changes in average temperature, sea level, ocean acidification and precipitation.

Reduce and manage the risks associated with more frequent, severe and unpredictable extreme weather events.

Prevent environmental migration through adaptation strategies, while addressing human mobility associated with natural disasters and climate change through durable solutions.

Ensure environmental migration is managed to the extent possible in a humane and orderly manner, including the protection of displaced populations.

4. Greenhouse Gas Emissions Reduction

Reduce dependence on, and use of, fossil fuels.

Increase investment in the development of renewable energy sources.

Conserve energy consumption and improve energy efficiency across all sectors of society.

Meet INDC commitments as per INDC contribution statement.

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Programs of Action

The Programs of Action provide the strategic guidance at a programmatic level to implement the vision and objectives above through the pipeline projects/programs. Sub-actions, which have been added in the highlighted colour green, represent an expansion or update of the program areas as a result of lessons learned from the Rapid Vulnerability Assessment desktop report (February 2017) as well as from the priority adaptation activities, identified in the JSAPs.

1. Economic Resilience

robust agriculture, forestry and fisheries sectors that are able to rapidly recover from hazards and positively adapt to changing environmental circumstances

strengthened private sector and increased public and private investment in climate and environment-friendly trade activities (green economy)

reduced reliance on imported commodities

socially and environmentally responsible tourism sector

development of Conservation and Payment Ecosystem Services schemes

2. Food, Water and Energy Security

uninterrupted supply of locally grown high-quality food crops for domestic consumption

secure access to safe and clean water

consistent, safe, affordable and clean supply of energy

sustainable land use management

sustainable forestry, agro forestry and biomass

small scale energy access in rural areas and outer-islands

3. Infrastructure and Settlements

Safe infrastructure and secure settlements that are able to withstand the impacts of non- climate and climate related hazards, including sea level rise.

low carbon energy grid/urban systems

resilient transport systems

infrastructure needs preparation for climate migration settlement and resettlement

policy development for implementation of ‘building back better’ approach as part of recovery and reconstruction programs following loss and damage caused by natural and human-induced disasters

4. Waste Management And Sanitation

protection of people and the environment from hazardous substances and wastes

integrated water resource management

integrated solid waste management

5. Health and Social Protection

with a focus on climate-induced disease preventions, reduced occurrence of epidemics and other health hazards

improved resilience and health status of the population, including special protection measures for vulnerable groups

6. Education

uninterrupted learning for students in safe locations

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Enabling Pillars

This section expands on the strategic objectives and enabling environment outlined in the CC Policy, further refining the five enabling pillars of Institutional Arrangements, Finance, Capacity Building and Knowledge Management, Technology, Innovation and Infrastructure, and Integrated Data and Planning Management into the three enabling pillars of Leadership, Coordination and Capacity. Updates and expansion to the pillars have been added in the highlighted colour green, as a result of lessons learned from the Rapid Vulnerability Assessment desktop report (February 2017), and subsequently validated in the two stakeholders workshop (March to April 2017, and August 16 to 17, 2017).

1. Leadership

Institutional arrangements: strengthen governance and management arrangements for Disaster Risk Management, Climate Change Adaptation and Greenhouse Gas Emissions Reduction including policy, compliance, legislative and regulatory frameworks, data management, performance monitoring and reporting frameworks that enable the ongoing assessment and management of disaster and climate risks and impacts by establishing a Climate Change and Sustainable Development Council to:

• streamline the review and approval of investments in adaptation and mitigation projects and programs for the country

• guide the development and implementation of a National Adaptation Plan (NAP) for the FSM

• guide the development and implementation of a national Capacity Building Plan under the NAP

• ensure that the FSM INDC targets are met

• ensure compliance and implementation of the Climate Change Act provisions

• lead the development of regulatory reforms to incentivize low-emissions pathways

• drive the economic and infrastructure development of climate-smart innovative technology across each of the FSM states

• ensure that the Overseas Development Assistance (ODA) Policy remains current/relevant and is implemented

• ensure that required institutional coordination for maximising the beneficial impact of climate finance is effective and well-funded.

• Strengthen the delivery of activities that are conducive to institutional coordination, including donor coordination as set out in the FSM Overseas Development Assistance 2013.

• Strengthen the delivery of activities that are conducive to capacity building, particularly in the areas of knowledge management; technology, innovation and infrastructure; integrated planning and data management:

Capacity Building and Knowledge Management

• recognition that the assessment and treatment of existing risks is the starting point for reducing and managing future risks.

A. Technology, Innovation and Infrastructure

• innovative and creative thinking to seek approaches that simultaneously reduce threats and identify possible opportunities arising from climate change.

• make use of new approaches and technologies that are climate and environment friendly. Recognizes the intrinsic inter- relationships that exist between development activities, people’s well-being and the state of the environment.

B. Integrated Planning and Data Management

• Knowledge-based decision making with an emphasis on understanding and addressing root causes of hazards and vulnerabilities and using a science-based , no regrets and precautionary approach.

• A ‘multi-hazard’ risk management and reporting approach that integrates disaster risk management, climate change adaptation and greenhouse gas emissions reduction.

Finance

• establish sustainable funding for Disaster Risk Management, Climate Change Adaptation and Greenhouse Gas Emissions 59

2. Coordination

Institutional Arrangements:

• Develop and implement national, state and community-level Integrated Disaster Risk Management and Climate Change Action Plans.

• Reactivate and fully resource the States-National Joint Risk Management Network to enable coordination of disaster risk management and climate change issues between:

- the national government and the State governments

- the national and state governments with Compact-funded initiatives

- the national and state governments with municipal and island-level governance agents, non-governmental organisations, intergovernmental organisations and the private sector.

• Ensure that the terms of reference of the Network include compulsory information-sharing on plans and projects/programs on adaptation and mitigation initiatives.

• Ensure that representatives from State and national overseas development assistance offices participate in the Network to enable updated reports on ODA funds coordination.

Finance

• coordinate sustainable funding for Disaster Risk Management, Climate Change Adaptation and Greenhouse Gas Emissions Reduction through coordination of official development assistance.

3. Capacity

Develop, fully resource and implement a Capacity Building Plan under the NAP, that prioritises:

• building expertise in the areas of projects/program development and management; overseas development assistance and climate finance management; climate knowledge and data management; climate smart innovation and technologies; climate-smart urban planners; gender and climate change.

• State-level capacity: capacity needs are particularly pronounced at the states level.

• capacity-strengthening of the Office of Environment and Emergency Management to coordinate climate change activities

• capacity-strengthening of the Department of Finance and Administration to receive direct budget support from climate finance donors, as well as to efficiently disburse to the States and other legitimate agencies.

• capacity-strengthening of the ODA office to coordinate climate funds with other development funds

• provision of incentives and other support to increase the numbers of accredited national implementing entities for climate finance in the FSM.

• promote, facilitate and develop training programs on disaster risk management and climate change for scientific, technical, managerial personnel and policy makers.

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Annex 2: Supplementary Consultations

List of one-on-one meetings to reach key stakeholders who were not available to attend the inception workshop.

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Annex 3: ODA Priorities List (2016 to 2018)

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Annex 4: FSM-GCF Proposal Approval Process

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Annex 5: FSM-GCF Eligibility Assessment Form

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Annex 6: Country Program M&E Results Framework Template

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Annex 7: Key Sources Consulted

Section 1:

Anderson, C.L., (2012): “Analysis of Integrating Disaster Risk Reduction and Climate Change Adaptation in the US Pacific Islands and Freely Associated States,” Technical Report 201105, Hazards, Climate, and Environment Program, Science Research Institute University of Hawai`i at Mānoa, USA. Online: http://hazards-climate-environment.org/yahoo_site_admin/assets/docs/HCE_TRreport_ClimateHazards_RecommendationSummary.138171615.pdf Asian Development Bank (2005): Climate Proofing: A Risk-based Approach to Adaptation, prepared by Hay, J.E., R. Warrick, C. Cheatham, T. Manarangi-Trott, J. Konno and P. Hartley.

Australian Bureau of Meteorology and the Commonwealth Scientific and Industrial Research Organisation, (2014): Climate Variability, Extremes and Change in the Western Tropical Pacific: New Science and Updated Country Reports, Pacific-Australia Climate Change Science and Adaptation Planning Program, funded by Australian Aid. Online: http://www.pacificclimatechangescience.org/wp-content/uploads/2014/07/PACCSAP_CountryReports2014_CoverForwardContents_WEB_140710.pdf

Federated States of Micronesia, Department of Finance and Administration (2017): Rapid Vulnerability Assessment Report: FSM Readiness Phase for the Green Climate Fund: https://drive.google.com/file/d/0B4svg2MiNAycNzg4ODVQZTdVTTQ/view?usp=sharing.

Federated States of Micronesia, Department of Resources & Development (2017): Environment Statistics and System of Environment-Economic Accounting (SEEA) - National Assessment Report, July 24, 2017. Online: http://www.fsmstats.fm/wp-content/uploads/2017/07/FSM-Environment-Statistics-Assessment-Report.pdf

Federated States of Micronesia, Department of Resources & Development (2017): Experimental Energy Accounts for the Federated States of Micronesia.Online: http://www.fsmstats.fm/wp-content/uploads/2017/07/Federated-States-of-Micronesia-experimental-energy-accounts-25.07.17.pdf

Federated States of Micronesia, Department of Resources & Development (2017): Count of Household from Shore and Average Household Population by State by Islands, using the FSM 2010 Census of Housing and Population.

Federated States of Micronesia, Department of Resources & Development (2017): Population Census 2010. Online: http://www.fsmstats.fm

Federated States of Micronesia, Yap Joint State Action Plan for Disaster Risk Management and Climate Change (2016) prepared by the the Pacific Community.

Federated States of Micronesia, Kosrae Joint State Action Plan for Disaster Risk Management and Climate Change (2016), prepared by the Pacific Community.

Federated States of Micronesia, Pohnpei Joint State Action Plan for Disaster Risk Management and Climate Change (2016), prepared the Pacific Community.

Federated States of Micronesia, Chuuk Joint State Action Plan for Disaster Risk Management and Climate Change (2016), prepared by the Pacific Community. DRAFT

Federated States of Micronesia, Department of Transportation, Communications and Infrastructure (2015): Climate Adaptation Guide for Infrastructure, V1.0, prepared by Asian Development Bank TA7927: FSM Strengthening Infrastructure Planning and Implementation

Federated States of Micronesia, Department of Transportation, Communications and Infrastructure (2016): Federated States of Micronesia, Infrastructure Development Plan FY2016 to FY2025.

Federated States of Micronesia (2013): Federated States of Micronesia: Nation Wide Integrated Disaster Risk Management and Climate Change Policy.

Federated States of Micronesia (2014): Federated States of Micronesia Climate Change Act, Public Law No. 18-34, title 25 of the Code of the Federated States of Micronesia, Chapter 8.

Federated States of Micronesia (2012): National Climate Change and Health Action Plan, with assistance by the World Health Organization (WHO).

Federated States of Micronesia (2015): Intended Nationally Determined Contribution, prepared with assistance by the Government of Germany Ministry for the Environment, Nature Conservation, Building and Nuclear Safety.

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Federated States of Micronesia (2015): Implementing an integrated “Ridge to Reef” approach to enhance ecosystem services, to conserve globally important biodiversity and to sustain local livelihoods in the FSM, ProDoc for the United Nations Development Program Global Environmental Facility-5 United Nations Environmental Program.

Federated States of Micronesia (2015): Second National Communication to the United Nations Framework Convention on Climate Change, prepared with the assistance of the United National Development Program Global Environmental Facility.

Federated States of Micronesia (2013): Policy for Overseas Development Assistance (ODA), with assistance from Australian Aid.

Foruw, T. and Konno-Anisin, V. (2010): Inventory of the Greenhouse Gas Emissions for the Federated States of Micronesia. Draft Report, Submitted to Office of Environment and Emergency Management, Palikir, Pohnpei, as used in the FSM Second National Communication to the United Nations Framework Convention on Climate Change.

Global Climate Change Alliance (GCCA) (2013): Climate Change Profile, Federated States of Micronesia, Version 2, July 2013, GCCA: Pacific Small Island States project with the Pacific Community. Online: http://www.spc.int/wp-content/uploads/2017/01/FSM.pdf

Micronesia Red Cross Society (2016:), Strategic Plan 2016 to 2020, in association with the International Federation of Red Cross and Red Crescent Societies and the American Red Cross.

Pacific RISA (The Pacific Regional Integrated Sciences and Assessments) Program (2017): US Department of National Oceanic and Atmospheric Administration. Online: https://www.pacificrisa.org/places/federated-states-of-micronesia/

Secretariat of the Pacific Community (2013): Review of Mainstreaming of Climate Change into national plans and policies, Federated States of Micronesia, prepared through the Planning 4 Sustainable Development and the Four Assist Network of Experts.

United Nations Framework Convention on Climate Change (2005): Technical Paper 3: Assessing Vulnerability for Climate Adaptation, prepared by Downing, T.E. et al.

Section 2:

Asian Development Bank (2016), Gender Statistics: the Pacific and Timor-Leste, in partnership with the Pacific Community, Manila, Philippines. Online: https://www.adb.org/sites/default/files/publication/181270/gender-statistics-pacific-tim.pdf

Federated States of Micronesia( 2014), 2023 Action Plan, prepared by the FSM 2023 Planning Committee. Online: http://dofa.gov.fm/strategic-planning/

Federated States of Micronesia, Department of Finance and Administration, Economic and Fiscal Update 2017. Online: http://dofa.gov.fm/economic/

Federated States of Micronesia, Department of Resources & Development (2017): FSM Household Income and Expenditure Survey 2013/14. Online: http://www.fsmstats.fm

Federated States of Micronesia (2014): FSM Household Income and Expenditure Survey 2013/14 Main Analysis Report, Statistics Division of the former Office of Statistics, Budget and Economic Management, Overseas Development Assistance and Compact Management, FSM.

Federated States of Micronesia (2014): FSM Household Income and Expenditure Survey 2013/14 Methodological Report, Statistics Division of the former Office of Statistics, Budget and Economic Management, Overseas Development Assistance and Compact Management, FSM.

Federated States of Micronesia, Department of Resources & Development (2017): Population Census 2010. Online: http://www.fsmstats.fm

International Organisation for Migration (IOM) (2016): Migration in the Federated States of Micronesia, A Country Profile 2015, co-funded by the IOM Development Fund, Geneva, Switzerland

Global Green Growth Institute: www.ggi.org

Green Climate Fund (2014): Gender Policy and Action Plan, GCF/B.08/19

The Pacific Community (2013): Review of Mainstreaming of Climate Change into national plans and policies, Federated States of Micronesia, prepared through the Planning 4 Sustainable Development and the Four Assist Network of Experts.

United Nations Framework Convention on Climate Change (2005): Technical Paper 3: Assessing Vulnerability for Climate Adaptation, prepared by Downing, T.E. et al. Graduate School USA (2016): Federated States of Micronesia Fiscal Year 2015 Economic Review, prepared under a grant from the Department of the Interior. Online: http://www.econmap.org

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The World Bank Group (2017): Poverty and Equity, Country Dashboard, Federated States of Micronesia. Online: http://povertydata.worldbank.org/poverty/country/FSM

Asian Development Bank (2017): Poverty in the Federated States of Micronesia. Online: https://www.adb.org/countries/micronesia/poverty

United Nations Development Program (UNDP) (2016): Human Development for Everyone. Briefing note for countries on the 2016 Human Development Report 2016, Federated States of Micronesia. Online: http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/es/FSM.pdf

United Nations Development Program (UNDP) (2017): “Oceans and small island states: First think opportunity, then think blue.” A blog by Craig Hawke, Principal Advisor, Small Island Developing States, Bureau of Policy and Programme Support, 22 Feb 2017: http://www.undp.org/content/undp/en/home/blog/2017/2/22/Oceans-and-small-island-states-First-think-opportunity-then-think-blue.html

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Annex 8: Acknowledgements

The preparation of this Country Program was made possible by the leadership of the Honorable Sihna Lawrence, Secretary of Finance and Administration and NDA to the Green Climate Fund.

It has been accompanied by communications with States and National government officials. The key States officials include the States GCF focal points, Maria Laaw (Yap), Anselmo Daniel (Chuuk), Feliciano Perman (Pohnpei) and Nena Williams (Kosrae); and the JSAP and IDP coordinators for each State, Victor Moonfel and Jonathan Fatal respectively for Yap State, Wilfred Robert and Eliseus Akapito respectively for Chuuk State, Nena Williams and Lipar George for Kosrae State, Patrick Carl and Jack Yakana for Pohnpei State. The National Government officials include: Eugene Amor, Assistant Secretary Budget and Planning, Department of Finance and Administration; Andrew Yatilman, Director, Office of Environment and Emergency Management; Cindy Ehmes, Assistant Director, Environmental and Sustainable Development, Office of Environment and Emergency Management; Elina Paul, Assistant Director, Emergency Division, Office of Environment and Emergency Management; Hon. Secretary Marion Henry, Secretary, Department of Resources and Development; Alissa Takesy, Assistant Secretary, Department of Resources and Development; Hon. Lukner Weilbacher, Secretary, Department of Transportation, Communication and Infrastructure; Dickson Wichep, Assistant Secretary, Department of Transportation, Communication and Infrastructure; Kemsky Sigrah, Administrator of the Compact Management Office; Gillian Doone, Administrator of Overseas Development Assistance Office; Norleen Oliver, National Gender Officer, Department of Health and Social Affairs; Moses Pretrick, Environmental Health Coordinator, Department of Health and Social Affairs.

Special thanks to colleagues in the FSM-GCF Readiness Program, Kensley Ikosia (Climate Finance Advisor/Team Leader), Belinda Hadley (National Consultant), Patrick Blank (Projects Development Specialist) and Rob Solomon, Economic Advisor, Department of Finance and Administration; for raising questions, correcting errors and clarifying phrasing. Thank you also to Lisa Ranahan (Deputy Director) and Tamara Greenstone (Program Manager) of the Micronesia Conservation Trust for their contributions. They have all greatly improved the quality of the text. Any remaining errors and omissions are the sole responsibility of the author. The views presented in this document do not necessarily reflect the views of the officials listed here, and are equally the sole responsibility of the author.

Thank you to the team at the Pacific Community, delivery partner for the FSM-GCF Readiness phase, for their attentive efforts.

Finally, many thanks to the GCF team: Coral Pasisi, Diane McFadzien, Ramona Calin and Alastair Morrison, for their guidance and support.

The preparation of this Country Program was funded under the FSM-GCF Readiness Program grant.

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