Pilot Program for Climate Resilience

Summary

The Pilot Program for Climate Resilience (PPCR) is a targeted program of the Strategic Climate Fund (SCF), which is one of two funds within the Climate Investment Funds (CIF) framework.

The PPCR aims to pilot and demonstrate ways in which climate risk and resilience may be integrated into core development planning and implementation by providing incentives for scaled-up action and initiating transformational change.

Details on Data

  • Information on contributions to the PPCR and project approvals are as of October 2016.
  • Projects are registered in CFU when approved by the PPCR Sub-Committee.

Basic Description

Name of Fund
Pilot Program for Climate Resilience (PPCR)
Official Fund Website www.climateinvestmentfunds.org
Date Created

 

Date fund proposed: February 2008.
30 May 2008 (design and creation agreed).Date fund made operational: 1 July 2008 (approved World Bank Board of Directors).
November 2008 (approved by the SCF Trust Fund Committee).
Proposed Life of Fund

 

The PPCR was designed to provide short-term finance through 2012.

The PPCR adopts the CIFs ‘sunset clause’ which enables closure of funds once a new financial architecture becomes effective under the UNFCCC regime.  Until such time, donors and recipients operate under the existing framework.

Administrating Organisation

 

The World Bank serves as the Trustee and Administrating Unit of the PPCR.

The World Bank Group, the African Development Bank, the Asian Development Bank, the European Development Bank, and the Inter-American Development Bank are the implementing agencies for PPCR investments.

Objectives

 

The PPCR is designed to provide programmatic finance for climate resilient national development plans with four main objectives:

1.   Pilot and demonstrate approaches for integration of climate risk and resilience into development policies and planning;

2.   Strengthen capacities at the national levels to integrate climate resilience into development planning;

3.   Scale-up and leverage climate resilient investment, building on other on-going initiatives; and

4.   Enable learning-by-doing and sharing of lessons at country, regional and global levels.

In addition, regional PPCR pilots will aim to strengthen cooperation and capacity at the regional level to integrate climate resilience into national and appropriate regional development planning and processes.

Activities Supported

 

The PPCR supports:

  • Funding for technical assistance to enable developing countries to build upon existing national work to integrate climate resilience into national and sectoral development plans.
  • Funding public and private sector investments identified in national or sectoral development plans or strategies and addressing climate resilience.

Outcomes should include:

  • An increased capacity to integrate climate resilience into country development strategies;
  • A more inclusive approach to climate resilient growth and development;
  • An increased awareness of the potential impact of climate change;
  • Scaled-up investment for broader interventions and programming related to climate resilience; and
  • Improved coordination among stakeholders regarding country-specific climate resilient programs.
Conditions & Eligibility

 

Country access requires:

  • ODA-eligibility (according to OECD/DAC guidelines); and
  • Existence of active multilateral development bank (MDB) country programs.

Priority will be given to highly vulnerable Least Developed Countries eligible for MDB concessional funds, including the Small Island Developing States.

A small number of pilot programmes have been selected on the basis of an expert review of expressions of interest and proposed criteria for prioritisation.

Accessing the Fund
  1. CIF Administrative Unit, through MDBs, inform prospective countries and invite expression of interest;
  2. PPCR-SC to identify and agree upon regional or country pilots informed by expert review
  3. Country-led, joint MDB missions to engage with the government, appropriate UN offices in the country, private sector, national civil society and other stakeholders on how the pilot program may enhance the climate resilience of national development plans, strategies and financing;
  4. Recipient countries and relevant MDBs jointly prepare proposals for PPCR funding; and
  5. PPCR-SC approves allocation of resources for programs and other activities and costs based on the proposals submitted.
Uptake & Projects Supported As of 31 March 2012, the PPCR Sub-Committee endorsed 13 Strategic Programs for Climate Resilience (SPCR) for a total amount of proposed PPCR funding of USD 800 million, an increase of USD 111 million since September 30, 2011 (USD 460 million for grant funding and USD 340 million for near-zero interest credits).

Fund Governance

Decision Making Structure

 

PPCR Sub-Committee

The SCF Trust Fund Committee established a PPCR Sub-Committee to oversee its operations. It is composed of:

  • Six representatives from donor countries to the PPCR, identified through consultation with contributor countries;
  • Six representatives from eligible recipient countries to the PPCR, identified through consultation with the recipient countries;
  • The developing country Chair or vice-Chair of the Adaptation Fund Board; and
  • One representative of a recipient country that is under Sub-Committee consideration for funding.

The first three categories of members are decision-making members.  They serve for one-year terms and may be reappointed. No more than one member will represent the same country at any given time.

Responsibilities of PPCR Sub-Committee:

  • Approving programming priorities, operational criteria and financing modalities for the PPCR;
  • Selecting countries to be funded under the PPCR and approving PPCR financing for programs;
  • Ensuring that activities of the PPCR complement the activities of other development partners (including the Global Environment Facility (GEF) and the UN organizations), in order to maximize synergies and avoid overlap.
  • Approving members of the Expert Group and providing guidance and information necessary for the Expert Group to perform its duties.

Observers

Active observers for the PPCR-SC also include representatives from:

  • Four civil society representatives (from Asia, LAC, Africa and developing countries respectively);
  • Two private sector representatives (one from a developed country and one from a developing country);
  • One community based organisation; and
  • Two Indigenous Peoples representatives.

Expert Group

An Expert Group was established by the PPCR Sub-Committee to make recommendations on the selection of countries that will receive financing under the PPCR.  The Expert Group consists of eight members with a wide range of scientific, economic, social, environmental, development, policy and/or governance/institutional expertise, as well as climate-related knowledge in areas such as agriculture, forestry, fisheries, and health.

Consultation with Non-Government Stakeholders

 

In designing the Climate Investment Funds, consultations took place with potential donors and recipients, the United Nations family, other multilateral development banks (MDBs), civil society organizations, and the private sector.  The CIF were created on agreement from some 40 developing and industrialized countries.

The SCF Trust Fund Committee and the PPCR-SC encourages strong developing country participation and works closely with the Adaptation Fund Board to ensure that PPCR pilot programs are complementary to the work of the Adaptation Fund (AF) and strengthens the knowledge-base for future AF actions.

Over time, the PPCR has made a growing investment in engaging stakeholders within recipient countries around the goals of the programme.

Information Disclosure

 

Pledges, deposits and funding decisions for SCF and its subsidiary funds (PPCR, SREP and FIP) are reported to the Sub Committee in biannual trustee reports.

Disclosure policy

In May 2009, the Trust Fund Committees approved a disclosure policy supporting in-country disclosure of country-owned investment plans and strategies (developed under each of the Trust Funds) prior to their submission to a CIF Committee for approval. Proposed plans are also posted on the CIF website no later than three weeks prior to review of the proposal by a Committee.  In the case of proposed programs and projects, an information document describing the proposal is to be made public at least two weeks prior to a decision on the funding of the proposal.  The policy recognizes that a country or a project proposer may have justifiable reasons for not publicly disclosing all information in an investment plan or project, and in exceptional cases, subject to Committee approval, certain information may be kept confidential. Information on the disbursement of finance is provided in trustee reports, however this information is not always comprehensive.

Issues Raised
 
The PPCR has been controversial as it establishes a parallel framework for delivering adaptation finance to UNFCCC funds such as the Special Climate Change Fund, Least Developed Countries Fund, and the Adaptation Fund.

It has also been controversial  because it offers developing countries (concessional) loans for adaptation which many stakeholders feel is inappropriate as it adds to developing country debt, and is inconsistent with some understandings of adaptation finance as compensation for harm caused by the developing world under the polluter pays principles. 

Relationship with Official Development Assistance 

Inclusion as Official Development Assistance Yes.

The application of all CIF finance (concessional loans, grants, and guarantees through the MDBs) can be classed as ODA by MDBs if:

  • It meets the criterion of promoting economic development and welfare;
  • The grant element is at least 25%; and
  • The funds are to be used in a country included in DAC list of ODA eligible countries.
Financial instrument/ delivery mechanism used (e.g. grant, loan)

 

PPCR Finance includes:

  • Grant finance to prepare the Strategic Program for Climate Resilience (Phase 1)
    • Grant amount of up to USD$1.5m proposed for Phase 1 preparation of single country pilots.
  • Preparation grants for detailed preparation of activities in the Strategic Program (Phase 2)
    • An estimated USD$1.5 million in preparation funds is available for each participating country (for a single country pilot).
  • Financing (to the extent it is available), to cover the additional costs associated with mainstreaming climate resilience into investments.
    • Both grants and concessional loans are available to finance the additional costs necessary to make a project climate resilient.

Currently, funding is split equally between loans and grants. The World Bank has emphasized that loans are optional; a recipient country can accept the grant component without the loan component. Highly Indebted Poor Countries will not be eligible for loans, in order to avoid further debt burdens.

Financing may be made available through budget support/development policy lending, coordinated investment programs across key sectors, alongside national financing and/or existing international support mechanism targeted at the public and/or private sector, which may, for example, include credit lines and partnerships with financial intermediaries, guarantees, and equity based operations.

As the PPCR is designed to integrate climate resilience into development plans, PPCR funded actions should, as an overarching principle, not be free-standing and should be fused with MDB resources and/or other parallel co-financing measures, including government and/or private sector resources.

Nature of recipient country involvement PPCR pilot programs are intended to be country led, build on National Adaptation Programs of Action and other relevant country studies and strategies, and strategically align with the Adaptation Fund and other donor funded activities.