Collaborative Insights to Unlock Climate Finance in Central Asia and the Caucasus
Mobilizing the finance required to achieve the Paris Agreement targets requires a transformational vision. One example comes from Tajikistan, where the government, through the Committee for Environmental Protection (CEP), is developing the required policy frameworks and enabling spaces for stakeholder exchange and engagement.
With support from the Asian Development Bank (ADB), CEP is finalizing the development of Tajikistan's Climate Finance Plan using the UNDP-supported NDC Implementation Plan as the basis. Both policy instruments are expected to serve as comprehensive frameworks to spell out the country's strategy for achieving its climate mitigation and adaptation targets by developing comprehensive recommendations to support the enabling environment for climate investments. According to ADB's Principal Climate Change Specialist, Kate Hughes, "the plan recommends structural reforms needed to increase flows of finance for NDC investments which will also support scaling up of climate action in the future."
Tajikistan is also showcasing its convening role in Central Asia and the Caucasus. In collaboration with the NDC Partnership, CEP convened the Climate Finance Forum for Central Asia & South Caucuses in Dushanbe from July 3 to 7, bringing together more than 130 participants from NDC Partnership country members, international finance institutions, and other development partners.
The Forum featured the presentation of Tajikistan's NDC Implementation Plan and NDC Climate Finance Plan and included a Peer Convening Exchange on NDC Investment Planning.
Discussions from the peer exchange highlighted the challenges and opportunities countries in the region face when unlocking NDC-aligned finance. Notably:
- Countries face limited institutional capacity challenges highlighted by the lack of communication and collaboration between ministries and Government agencies. This is especially the case when creating project pipelines and programs.
- Governments and development partners should seek alignment between priorities to ensure efficient resource allocation. To do so, governments should ensure project prioritization takes place as part of a rigorous process.
Investment Planning Capacity
Participants shared their main challenges in creating enabling environments and institutional arrangements for NDC finance mobilization, such as the limited institutional capacity and insufficient resources hindering the effective execution of climate action plans. Additionally, information gaps pose a significant obstacle, as crucial data necessary for decision-making may be unavailable. Furthermore, inadequate communication and collaboration between ministries and government agencies hamper coordinated efforts toward NDC implementation. Moreover, the lack of access to international resources further exacerbates these countries' difficulties in achieving climate goals. Addressing these barriers is crucial to enhance NDC implementation and promote sustainable development in the region.
Best Practices
- Establishing effective coordination mechanisms to foster cooperation among various ministries and stakeholders, ensuring a cohesive approach towards climate action. Similarly, coordination mechanisms between development partners are vital in aligning objectives and leveraging resources for sustainable development.
- Establishing robust Monitoring, Reporting, and Verification (MRV) systems is essential for tracking progress and ensuring transparency in climate actions.
- Governments should prioritize capacity development strategies within their institutions to enhance their ability to address climate change challenges effectively.
- Inclusivity and participation of all stakeholders are crucial for achieving comprehensive and sustainable solutions.
- Appointing climate envoys who champion the climate agenda, raise awareness, and mobilize political will can significantly drive climate action.
Identification and Prioritization of Investment Needs
Participants also shared their insights during session 2 on the main challenges and best practices to prioritize investments and engage stakeholders in the process. In accessing financing for projects, considering the level of decentralization is crucial. Highly decentralized countries require additional support, so governments should prioritize projects rigorously to allocate resources efficiently and guide development partners effectively. This involves identifying national development and climate priorities, including plans, strategies, and commitments such as NDCs and NAPs. It also entails conducting socio-economic analysis, engaging stakeholders, and employing modeling systems to assess project impacts and resilience. Establishing inclusive multi-stakeholder processes and engaging with financiers are important steps. Additionally, creating programs and pipelines for prioritized projects, with capacity support as needed, streamlines the implementation and financing process.
Countries must consider decentralization, prioritize projects, and create programs and pipelines to access financing. Countries can effectively utilize resources and achieve their development and climate objectives by aligning with national priorities, employing a rigorous approach to project selection, and engaging stakeholders.
Investment Mobilization
During Session 3, representatives from development partners, the private sector, multilateral development banks, and multilateral climate funds came together to discuss their perspectives and success stories surrounding climate finance mobilization. This session allowed participants to understand the complex landscape of climate finance and explore potential collaboration and resource mobilization pathways.
The Peer Convening sessions set the stage for an enlightening three-day technical workshop on needs-based financing organized by the UNFCCC. The workshop aimed to provide participants with the necessary tools and knowledge to identify and develop regional project ideas.
The workshop yielded promising outcomes as the country participants successfully identified four regional project ideas. These ideas revolved around critical themes such as green bonds, early warning systems and disaster risk reduction, agriculture, forestry, and other land uses (AFOLU), and sustainable rural development focused on locally-led adaptation. Utilizing the insights shared by the trainers, the participants further refined these ideas by incorporating elements such as climate rationale, theory of change, safeguards requirements, and monitoring and evaluation frameworks. After the workshop, participants showcased their regional project ideas, which are expected to be nurtured in collaboration with interested partners.
The Forum highlighted the crucial role of collaboration between governments and development partners in formulating effective and sustainable NDC investment plans. The success of these plans relies heavily on the combined efforts, resources, and expertise of all stakeholders involved. By working together with governments from the planning stage, development partners can align their assistance with the priorities and needs of the countries they support. This synergy enhances the overall quality of investment plans and fosters a sense of ownership and commitment among all parties, laying the foundation for successful implementation.
"The Republic of Tajikistan hopes that developed countries, United Nations structures, international and regional organizations, and influential financial institutions will continue to cooperate in the implementation of the Climate Finance Plan for the implementation of Tajikistan's NDCs.", said Mr. Mavlodod Abdulkodir, CEP Deputy Chairman.