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Strengthening adaptive capacity in Mozambique coastal cities

N o r d i c D e v e l o p m e n t F u n d

NDF is financing its firstclimate change project inMozambique. With a grantof EUR 3.8 million, NDFis co-financing a coastalcities climate change pro-ject with the World Bank.

Mozambique has 2470 kmof coastline on the IndianOcean. The country’s majoreconomic assets, such asports, roads, railways andmanufacturing industries,are concentrated along thecoast. More than 3.5 mil-lion people live in Mozam-bique’s ten coastal citiesand about 70% of theselive in the three regionalport cities: Maputo, Beiraand Nacala. Mozambique’scoastal cities play a criticalrole in the country’s devel-opment as they provide

essential transport andsupport services to theagriculture, tourism andextractive sectors. Thesesectors are the country’smain sources of income.According to the WorldBank, severe weatherevents are currently on average annually reducingMozambique’s GDP by1.1%. A significant part of these costs is caused by flooding in the maincoastal cities.

The World Bank is im-plementing a Cities andClimate Change projectthat aims to strengthen selected cities’ resilience to climate-related impacts.The project is aligned withthe Strategic Program forClimate Resilience; a multi-donor long-term invest-

NEWSLETTER

ment program that willplay a catalytic role in promoting climate-resilientgrowth strategies in Mozam-bique. NDF will contributewith additional financing forclimate change capacity de-velopment, institutionalstrengthening and techni-cal studies.

The World Bank projecthas two components:strengthening the munici-pal sector and enhancingresilience of strategic coastalcities. NDF will primarilysupport the latter compo-nent, but will, as much aspossible, work across theproject to ensure that cli-mate change is taken intoaccount in the institutionalcapacity-building activitiesand in the work on theground. “The combination

of both institutional andphysical investments willenhance the project’s sus-tainability and will providean adaptation model forother vulnerable cities,”says Aage Jørgensen,Country Program Man-ager at NDF. NDF supportwill be focused on increas-ing adaptive capacity inerosion and flood controlat both national and mu-nicipal level. More specifi-cally; institutions dealingwith sanitation in Nacalaand Beira will be strength-ened to manage and planerosion and flood control.The project has a povertyreduction focus since themajority of the direct bene-ficiaries will be low-incomehouseholds located in in-formal settlements.

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NDF’s new climate changemandate has allowed NDFthe opportunity to reviewand update several of its policies and workprocesses. Not only havemandate-related policiesbeen introduced, but alsogeneral policies and pro-cedures have been up-dated in order to furtherenhance NDF’s functionalframework. NDF has nowbegun reviewing its anti-corruption policy and isplanning to present a re-vised framework for itswork on integrity mat-ters in 2012. In recentyears, the multilateral development banks, leadagencies in most projectsfinanced by NDF, haveintensified their coopera-tion and agreed on aframework for prevent-ing and combating fraudand corruption. Throughits revised anti-corrup-tion framework, NDF in-tends to adhere to theprinciples developed bythis international cooper-ation. In addition, NDFwill strengthen its coop-eration with its leadagencies to facilitate col-laboration on integritymatters, both in regardsto proactive work in thepreparation and imple-mentation of projects aswell as in handling alle-gations of fraud and cor-ruption.

As a part of the revi-sion process, NDF willalso be focusing on rais-ing awareness and train-ing staff. In January,Lead Specialist AndersAgerskov from the WorldBank’s Integrity VicePresidency provided con-crete ideas on how toproactively identify andmitigate integrity risk ina seminar arranged byNDF. The next step is tofocus on integrity issuesspecifically in climatechange related projects, a topic that will be ad-dressed later this year.

Anti-corruptionwork at NDF

Urban growth in the GreaterMekong Subregion (GMS)will, in the next few decades,primarily be in small- andmedium-sized cities, and inperi-urban areas along exist-ing and new growth corri-dors that connect citiesacross the region. Main-streaming climate changeconsiderations into economicplanning and investments in urban areas is essential for sustainable long-termgrowth.

The Asian DevelopmentBank, together with NDF,is implementing a projectthat aims to assist GMS

cities to develop tools andprocesses that will enhancetheir ability to adapt toclimate change in an effi-cient and equitable man-ner. A handbook will beproduced to serve as aguide and toolkit to orientpolicy makers and urbanpractitioners towards ef-fective city-based climatechange adaptation meas-ures. Along with the hand-book, a series of high-levelpolicy dialogue events,such as seminars andworkshops, will be con-ducted between nationaland local governments

Resilient cities in the Greater Mekong

Sub-region

and the private sector. The purpose of theseevents will be to discussnational policy responses,allocation of responsibil-ities and mobilisation offinancial resources.

Ultimately, the pro-ject will help to improvethe cities’ institutionalcapacity, so that theycan address the impactsof climate change andtake efficient and equi-table adaptation actions.The total project cost isEUR 790,000 of whichNDF is contributingEUR 500,000.

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Support to the Nicaraguan Road Sector

Training in GeothermalDrilling inKenya

The road network inNicaragua is increasinglyaffected by climate change.The economic impacts, especially from severerainfall events, are oftensubstantial, mainly throughloss of access due to dam-damage to roads, culverts,and bridges.

The Ministry of Tran-sport and Infrastructure(MTI) is the agency respon-sible for the road plan-ning system in Nicaragua.A national road mainte-nance fund was estab-

lished in 2005 to supportthe maintenance of theroad network. However,the ongoing efforts arenot adequate and the know-ledge base in the Ministryis insufficient. “These issues increase the climatevulnerability of the exis-ting roads and the situa-tion has led to an adap-tation deficit in the roadsector that will continue to grow unless an adapta-tion programme is put inplace,” says Aage Jørgensen,Country Program Man-

ager at NDF. The Inter-American

Development Bank has together with MTI pre-pared a Road Sector Sup-port Program. NDF will,with EUR 4.4 million, co-finance an adaptationcomponent of the pro-gramme. The adaptationcomponent’s objective isto develop adaptive capa-city in key institutionsand furthermore, inte-grate climate change aspects into the mainte-nance, planning and design

of the road infrastruc-ture. “The present pro-gramme is focused onmaintenance and rehabili-tation, which is the best ap-proach to cope with theexisting climate. NDF’sparticipation will providetools and knowledge thatwill make the road net-work more robust and ca-pable of handling variousclimate conditions,” con-tinues Mr. Jørgensen.

Due to unstable electri-city generation of hydro-power plants, Kenya ex-periences power short-ages and has to rely onexpensive emergencygeneration using fossilfuels. In recognition ofthe potential and reliabil-ity of geothermal power,the Kenyan governmenthas embarked on an am-

bitious generation expan-sion plan to increase theinstalled geothermal ca-pacity from existing 200to 5,000 megawatts by2030. Geothermal energyis a environmentally-friendly renewable energysource that emits insigni-ficant emissions. The Geo- thermal DevelopmentCompany (GDC) has beenmandated to acceleratethe country’s geothermaldevelopment.

Drilling of geothermalwells is a highly riskybusiness since investmentand operation costs arehigh. Access to skilled,permanent staff is impor-tant for cost-effective

drilling operations. At the moment, GDC ismainly using foreigndrilling services. To en-sure long-term sustain-ability, it is crucial todevelop the country’s ownhuman resources. Inorder to execute the man-date and meet the objec-tive, GDC has to deploy atleast twelve drilling rigswith qualified drillingpersonnel. Inadequate access to trained labourin operation and mainte-nance of the drilling rigshas slowed down Kenya’sexploration activities. Toovercome these capacityconstraints, NDF is finan-cing an extensive geo-

thermal drilling trainingprogramme under theWorld Bank’s ElectricityExpansion Project. Theprogramme will consist of two parts: a trainingneeds assessment andtraining in drilling opera-tions. The total cost of theproject is estimated atEUR 2.7 million, of whichNDF’s share is EUR 1.5million.

“From a climate per-spective, the proposedactivity is important asit fosters investments inclean geothermal energy”says Hannu Eerola, Coun-try Program Manager atNDF.

The bridge Paso de Caballos in Nicaragua was financed by NDF and connects the road between Chinandega and the Pacific port of Corinto.

FINANCING FOR CLIMATE CHANGEPROJECTS IN LOW-INCOME COUNTRIES

The Nordic Development Fund (NDF) provides financing for climate change interventions in low-income developing countries. NDF is the joint deve-lopment finance institution of the Nordic countries—Denmark, Finland, Iceland, Norway and Sweden—and finances projects in cooperation with otherdevelopment institutions.

NORDIC DEVELOPMENT FUND, P.O. Box 185, FIN-00171 Helsinki, Finland (Visiting address: Fabianinkatu 34), Tel: +358 10 618 002, Fax: +358 9 622 1491, E-mail: info.ndf@ndf.fi, www.ndf.fi

Nordic Development Fund

NDF Newsletter presents NDF's operations. The newsletter is published as needed. Layout Kubik, print Libris Oy.

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NCF 3rd call: 30 proposals shortlisted

The third call for propos-als for the Nordic ClimateFacility (NCF) closed inJanuary after attracting128 applications. Afterscreening the applica-tions, the NCF team hasshortlisted 30 applicantsto submit full proposals.NCF will evaluate andscore the final applica-tions based on NCF’sguidelines.

The third call for propo-sals for NCF had the theme:innovative low-cost climatesolutions with a focus on

local business development.“The theme may have beenchallenging as, comparedto the two previous calls,fewer applications werereceived,” says MartinaJägerhorn, Country Pro-gram Manager at NDF.The first two calls gene-rated 138 and 176 app- lications, respectively.

NCF is funded by NDFand jointly administeredwith the Nordic Environ-ment Finance Corporation(NEFCO).

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Urban flood prevention in Senegal

Climate change is likely tocause more frequent andsevere extreme weatherevents, sea level rise andstronger storm surges,which all increase floodrisks. Flooding incidentsin urban Senegal have sig-nificant social and eco-nomic impacts. Over thepast 30 years, flooding hasaffected over 900,000 peo-ple in Senegal and hascaused significant damageto infrastructure alongwith economic losses.Lately, suburban Dakar,where 80% of the coun-try’s economic activitiesare concentrated, has beenhardest hit.

The World Bank plansto support a storm watermanagement and climatechange adaptation projectcalled PROGEP in Senegal.The objective of PROGEP

is to improve storm waterdrainage and flood pre-vention in peri-urbanDakar for the benefit oflocal residents. NDF is contributing EUR 3 millionto activities that aim tostrengthen the climatechange adaptation as-pects of the PROGEPproject. The activities financed by NDF will design and integrate flood risk reduction andadaptation measures into communal actionplans. Furthermore, NDF activities will sup-port climate resiliencerelated capacity-building,public awareness-raising,knowledge disseminationas well as prepare theground for extending climate change adaptationinitiatives to other citiesin Senegal.