NEWSLETTER Nordic
Development
Fund
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NDF shows results in integrating development and climaterelated objectives After three and a half years of climate change operations NDF has approved, by the end of 2012, a total of EUR 134,5 million for altogether 50 projects in 14 countries. Nearly half of the approved euro volume is allocated to countries in Sub-Saharan Africa, and the rest for low-income countries in Asia and Latin America. The number of approvals is noteworthy, especially taking into account the rigorous preparation procedure that each operation undergoes prior to discussion at the NDF Board of Directors. Approved Financing by Region - 134,5 m€
In order to ensure that all its projects were in compliance with NDF’s climate change mandate, NDF started elaborating, in late 2009, its own criteria for project identification and screening for climate change contents. The first version of the criteria, which concentrated its efforts on defining quantitative climate adaptation and mitigation criteria, was endorsed by the NDF Board of Directors in December 2010. After some time of testing the criteria on actual projects, the criteria were further refined to include more detail on multiple development issues. The revised criteria were approved by the Board of Directors in September 2012. “In my view, the NDF criteria and NDF’s new role as an active contributor to project design represent a substantive
intellectual and practical contribution to the identification and putting into action of activities genuinely linked to causes and consequences of climate change,” says Pasi Hellman, NDF Managing Director. NDF-funded projects which are effectively combining the climate and development objectives include, for example, mitigation projects targeting the urban and rural poor, projects involving smallscale businesses as well as projects with strong gender elements. Regarding adaptation activities, the combined screening criteria developed by NDF can help in identifying investment opportunities which primarily benefit the poor. Current activities funded by NDF include activities targeted, for example, at ethnic minorities, small
farmers and residents of coastal areas; NDF activities can have a significant impact on the adaptation ability of these at-risk populations. In early 2012, an independent evaluation of NDF’s progress under the first two years of the climate mandate concludes that NDF’s instruments and work fit well into the international climate financing agenda and that NDF’s funding reaches the countries that need it most. Furthermore, the report states positive results regarding fulfilment of objectives, increased value added, streamlined approval procedures, a high level of development effectiveness and the organisation’s results orientation. According to Mr Hellman, “these findings form a good foundation for future work at NDF.”
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Joint seminar on integrity and anti-corruption arranged by NDF, NIB and NEFCO On December 12, NDF, the Nordic Investment Bank (NIB) and the Nordic Environment Finance Corporation (NEFCO) arranged a joint seminar on integrity and anti-corruption for the board members, managements and anti-corruption committees of the three institutions. All three organisations have existing procedures to prevent and detect fraud and corruption, and the seminar had the dual objective of providing additional knowledge and awareness for the participants as well as to deepen the cooperation on common topics between the three institutions. Three highly notable speakers were invited to share their knowledge and experiences, namely Jannik Lindbæk, former President of NIB and former Executive Vice President of IFC, and one of the founding members of Transparency International Norway; Integrity Vice President Leonard McCarthy of the World Bank; and Duncan Smith, Deputy Head of Fraud Investigations at the European Investment Bank (EIB). Jannik Lindbæk gave an introduction to how the international financial institutions (IFIs) have handled the questions of integrity and anti-corruption over the last couple
of decades as well as to how and why Transparency International was founded, while Leonard McCarthy gave examples of the devastating effects of fraud and corruption and how the World Bank fights such misconduct today. Duncan Smith gave a presentation from the EIB and EU perspective including examples on procedures for investigation and prevention. The Corruption Perceptions Index for 2012, recently published by Trans-
parency International, gave the Nordic countries strong rankings - between 1st and 11th place. However, this fact does not mean that the question of fraud and corruption is not a relevant and important topic for Nordic governments and Nordic/Baltic institutions, also. The speakers agreed that regardless of the type of financing or geographical regions, it is essential to work preventively and investigate and address misconduct when appearing. “Never
Duncan Smith, Jannik Lindbaek and Leonard McCarty
give up zero tolerance against corruption,” Leonard McCarthy stated. For the Nordic institutions, fraud and corruption not only risk the results of the projects being financed, but also pose a great reputational risk to the institutions. To mitigate such risks, raising knowledge and awareness among staff, management and board members is a first step. Preventive work also includes having a wellfunctioning due diligence process: “Make sure you know who you are doing business with,” as Lindbæk stated. Preventive and investigative anti-corruption work is a priority for the IFIs today, and the speakers concluded that NDF, NIB and NEFCO have important roles to play. When cooperating and jointly working towards common interest, such as combatting fraud and corruption, the Nordic governments and institutions can achieve good results. IFIs should continue to cooperate formally and informally on this topic: “It is important to speak with one voice,” Duncan Smith concluded. NDF, NIB and NEFCO will now continue to explore how the institutions can most efficiently develop their cooperation in combatting fraud and corruption.
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Photo: Fergal of Claddagh
NDF
NDF supports strengthening of hydrometeorological services in Mozambique Temperature and rainfall are key indicators of changes in the climate. Measurements of rainfall are essential for assessing the effects of climate change on the water cycle and water balance. Systematic and high-quality data on air temperature, wind speed, precipitation and river flow are fundamental to understanding and acting on climate change. In Mozambique, development and economic growth is extremely vulnerable to hydro-climatic variability and change. More than 60% of Mozambicans live in the low-lying and flat coastal areas of the country; even small changes in sea level or river flow have far-reaching impacts, including increased exposure to floods and cyclones. Almost all agriculture in Mozambique is subsistence rainfed farming and provides livelihood, income and food for 80% of the population. Changes in rain patterns will thus affect the food security of large parts of the population. Aquaculture, commercial fishery and artisanal fisherfolks depend on timely meteorological information to avoid dangerous storms and the resulting loss of life and
resources such as nets and boats. Developing the country’s hydropower potential of 13,000MW and effectively operating existing and future dams relies directly on an accurate record of hydrological data. Infrastructures such as bridges, roads and drainage structures are improved by accurate and long-term hydrological record. In transport, the efficiency and security of Mozambique’s aviation industry depends on high-quality weather forecasts. Hydrometeorological information can enhance productivity of key sectors of the economy by providing information that can translate into economic output. Equally, greater understanding of extreme weather events from more accurate, relevant and timely hydrometeorological information can minimise their negative impacts. At the moment, there is no fixed business model set up to support Mozambique’s hydro-meteorological services. The mandate and responsibility for collecting hydro-meteorological data resides with three different agencies. The absence of sufficient resources for basic operation and maintenance has undermined investments in data
collection networks and eroded the overall efficiency of the system. For example, only 38 weather monitoring stations out of 154 are in operation. Maintaining existing and expanding long-term networks is challenged by limited access and transport to remote areas, lacking operation and maintenance, insufficient financial resources, and far-reaching calibration needs. In order to strengthen Mozambique’s national hydro-meteorological data collection and management, NDF, together with the World Bank, is financing Transforming HydroMeteorological Services. With a total of EUR 12.5 million, the project will contribute to improving monitoring, forecasting and information product delivery. This will be achieved by investments into optimised hydro-met monitoring networks, more effective data management and data exchange, advancing forecasting capabilities which will feed into more robust early warning systems and the development of relevant, accurate and timely hydromet information products to users. The project will also focus resources on
training and skills-development of staff, and institutional strengthening and reform. The wider economic and societal benefits are multiple and will range from higher productivity (e.g. agriculture and hydropower) to preventing human and infrastructure losses due to natural hazards (e.g. cyclones and reoccurring floods). The combination of both institutional capacitybuilding, planning and physical investments will enhance the long-term sustainability. “Investments in meteorological infrastructure and services are fundamental for development of other tools to improve adaptive capacity such as insurance instruments”, says Aage Jørgensen, Country Program Manager at NDF.
"Infrastructures such as bridges, roads, and drainage structures are improved by accurate and long-term hydrological record, and forecasting." The project will be a special sub-project to the World Bank National Water Resources Development Project (NWRDP), which has the development objective to strengthen the development and management of national water resources. The project is under the umbrella of the Strategic Program for Climate Resilience (SPCR); a multi-donor long-term investment programme that will play a catalytic role in promoting climateresilient growth strategies in Mozambique. NDF has a long-standing cooperation with the World Bank in Mozambique. The cooperation between NDF and the Mozambique authorities has also worked well.
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Projects approved in 2012 Region
Project
NDF Grant EUR m
SGF - Social Analysis and Adaptation to Climate Change in Developing Countries
0.2
Global Global Africa Regional (E-Africa)
Geothermal Exploration Project
5.0
Kenya
Training in Geothermal Drilling
1.5
Mozambique
Coastal Cities and Climate Change
3.8
Mozambique
Transforming Hydro-Meteorological Services
4.5
Senegal
Flood Risk Management
3.0
Tanzania
SGF - Hydropower Sustainability Assessment
0.5
Tanzania
SGF - Climate Smart Solutions for Water & Energy
0.5
SGF - Resilient Cities in the GMS: Adapting Cities to Climate Change
0.5
Bolivia
Rural Electrification with Renewable Energy
4.0
Nicaragua
Adaptation to Climate Change in Road Transport Sector
4.4
Asia Regional (Asia) Latin America
During 2012, NDF approved financing for 11 projects with a total value of approximately EUR 27.900.000 million. NDF has been most active in infrastructure, natural resources and climate change capacity-building.
New Managing Director takes over at NDF Pasi Hellman started as the new NDF Managing Director on 1 November 2012. He comes from the position of Deputy Director General at the Development Policy Department of the Finnish Ministry for Foreign Affairs. He has also represented Finland in the Board of Directors of NDF. During the last twenty years, he has served in various positions related to international relations and global development in Europe, Africa and Asia. Hellman is replacing Helge Semb, who took over six years ago when NDF’s future was uncertain. During Semb’s time, NDF’s mandate was revised, and the organisation is now in the forefront of emphasising climate change aspects in development financing. ”It has been a privilege helping transform NDF to its current function,” says Semb, who is returning to Norway after 18 years of international service.
FINANCING FOR CLIMATE CHANGE PROJECTS IN LOW-INCOME COUNTRIES The Nordic Development Fund (NDF) provides financing for climate change interventions in low-income developing countries. NDF is the joint development finance institution of the Nordic countries—Denmark, Finland, Iceland, Norway and Sweden—and finances projects in cooperation with other development institutions.
Nordic Development Fund 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 NDF Newsletter presents NDF's operations. The newsletter is published as needed. Layout Kubik, print Erweko Oy.