Climate Adaptation Finance Update: MDBs Approve Projects with Co-benefits

At the close of 2017, multilateral development banks (MDBs) announced funding for several climate adaptation and resilience projects that will target multiple co-benefits, such as job creation, poverty eradication and food security with their implementation.

Caribbean Builds Back Better

In December 2017, the Caribbean Development Bank (CDB) reported on funding for several initiatives and projects that will support recovery from the recent hurricanes in the Caribbean and build disaster and climate risk resilience for the future.

A US$65.6 million package of loans and grants to the Virgin Islands, a British overseas territory with a population of approximately 30,000, will support reconstruction of social and economic infrastructure in the aftermath of Hurricane Irma, which caused total losses and damages of an estimated US$3 billion on the Islands. In Anguilla, a British territory of 15,000, a US$5 million loan will fund the restoration of the islands’ power transmission and distribution system, also damaged during Hurricane Irma. In Antigua and Barbuda, US$29 million from the CDB will support similar efforts. The reconstruction efforts will follow CDB’s ‘build back better’ concept. [CDB Press Release on Virgin Islands] [CDB Press Release on Anguilla] [CDB Press Release on Antigua and Barbuda]

British Virgin Islands are also benefiting from a US$650,000 CDB Community Disaster Risk Reduction Fund (CDRRF) project that will establish flood-resilient ‘SMART Communities’ with the help of non-governmental organizations. A SMART Community, according to the CDB, “integrates comprehensive disaster management principles to reduce vulnerability and build resilience to climate change impacts.” The project will include the retrofitting of community buildings and installation of alarm systems and sedimentation traps.

In an effort to increase resilience while reducing poverty, the CDB’s CDRRF, which includes Canada and the EU as donors, will be launching an Enhanced Country Poverty Assessment (CPA) in first quarter of 2018. The CPA will enable measuring the vulnerability of communities and groups to natural hazards and climate change impacts, and support decision-making on how to build their resilience.

Agricultural Resilience Projects with Multiple Benefits

In the area of food security and agricultural resilience, the African Development Bank (AfDB), through the Least Developed Countries Fund (LDCF), will target the root causes of the drought crises in the Horn of Africa through a US$17 million programme centered on building critical water management infrastructure in agro-pastoral production systems in Somalia and Sudan. [AfDB Press Release]

In Afghanistan, a US$71 million project financed by the LDCF, the Asian Development Bank (ADB), the World Bank, the UN Development Programme (UNDP) and the Afghan government, will focus on boosting the climate resilience of women and marginalized groups through measures in four areas: enhancing gender-sensitive disaster risk reduction at the community level; establishing community-based early warning systems; promoting climate-resilient agricultural practices and livelihoods; and working with government institutions at various levels on integrating climate change into planning. According to the UNDP, an estimated 80% of Afghanistan’s economic losses are caused by climate-induced disasters and extreme winters, and 75% of Afghans rely on agriculture for their livelihoods. [UNDP Press Release]

Also in December, Madagascar and the International Fund for Agricultural Development (IFAD) signed a US$53 million loan and grant package agreement that will support a US$250 million programme for improving incomes and food and nutritional security among 320,000 rural households in the country where insufficient nutrition is a problem among 76% of the population. The programme, which will concentrate on eight priority food value chains, will include a component that promotes sorghum for increased resilience in the country’s highly climate vulnerable southern regions. [IFAD Press Release]

In India’s Tamil Nadu state, a US$318 million loan from the World Bank will support economic growth and climate resilience among small and marginal farmers. The funding will rehabilitate and modernize about 4,800 irrigation tanks and 477 check dams, benefiting 500,000 farmers. According to Indian authorities, “rehabilitating and modernizing irrigation tanks will improve the reliability and availability of irrigation water for farming communities, making them less prone to climatic hazards.” [World Bank Press Release on India]

The World Bank will also provide US$42 million for agricultural climate resilience in Uruguay where flooding and extreme droughts have become more frequent and severe over the past decade. The project, covering more than half of the country’s arable lands, is expected to support 3,900 farmers in increasing their productive capacity, climate resilience and greenhouse gas (GHG) emissions through sustainable natural resource management. The project, which started in 2011, has already received US$49 million in financing from the World Bank. [World Bank Press Release on Uruguay]

In the Caribbean, a US$5 million CDB loan will help promote climate-smart agriculture through the delivery of technical assistance and financial support to poor rural communities in Grenada. The project will simultaneously aim to stimulate job creation and youth empowerment. [CDB Press Release]

Road, Water Infrastructure with Integrated Climate Resilience

In the Southern Philippines, a US$380 million loan from the ADB will support the government’s efforts to strengthen the Mindanao island’s road infrastructure and its economy while also incorporating climate resilience features, including elevated pavements, enhanced slope protection, and better drainage. In Northwest Argentina, a US$300 million World Bank loan will similarly improve the road network while increasing its resilience to extreme weather events, such as floods. [ADB Press Release on the Philippines] [World Bank Press Release on Argentina]

In Bolivia, a programme that will expand water supply and increase resilience to extreme effects of droughts in urban areas will receive a loan of US$50 million from the Inter-American Development Bank (IDB) and an investment of US$25 million from the South Korea Program for Infrastructure Financing in Latin America and the Caribbean (KIF). The country is amidst one of its worst droughts in decades. The programme interventions will include infrastructure works and capacity building. [IDB Press Release]

Climate Resilience through Policy-based Financing, Private Sector Participation

Three Pacific island states, Samoa, Tonga and Tuvalu, will receive a US$15 million loans/grants package from the ADB for the Pacific Disaster Resilience Program, aimed at strengthening disaster resilience by facilitating faster early recovery and reconstruction. The programme builds on the experience of Cook Islands with using policy-based financing, where loan funds have been made available for a three-year period and can be drawn upon flexibly to support short-term post-disaster activities. [ADB Press Release on Samoa, Tonga and Tuvalu] [ADB Press Release on Cook Islands]

In Tajikistan, the European Bank for Reconstruction and Development (EBRD) and the Climate Investment Fund’s Pilot Programme for Climate Resilience (CIF-PPCR) will co-fund a US$1 million loan to the country’s First MicroFinance Bank (FMFB) to finance investments in climate resilience technologies in the commercial and residential sectors. The financing is part of the EBRD’s Climate Resilience Financing Facility (CLIMADAPT), which supports climate resilience measures in the private sector. [EBRD Press Release]

In Belize, the tourism industry’s climate resilience will receive a boost from a US$10 million IDB loan that will include investments to reduce floods and to control coastal erosion. The project is expected to benefit more than 100,000 people. According to the IDB, measured by losses/gross domestic product (GDP), Belize is one of the countries most affected by extreme weather events. [IDB Press Release]

Lessons in Resilience

In project lessons and results, the Word Bank reported on its Central Asia Hydrometeorology Modernization Project, implemented to strengthen weather forecasting and early warning efforts in Tajikistan and the Kyrgyz Republic. According to the World Bank, forecast accuracy in these two countries has increased by 20-30%, which in turn will enable better anticipation of extreme weather events and related measures to protect populations and minimize losses. [World Bank Press Release]

The Global Environment Facility (GEF) wrote how a project in Liberia, supported by the UNDP and GEF-administered LDCF, which aimed to enhance the climate resilience of vulnerable coastal areas and communities, resulted in the construction of a 600-meter breakwater revetment that has reduced the vulnerability of thousands of families. The project will be replicated in another Liberian coastal community in 2018. [GEF Press Release]