NDF Newsletter 3-2011

NEWSLETTER Development

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Photo: © World Bank, Simone D. McCourtie

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Integrating gender considerations into climate change policies and programs Climate change initiatives are today often treated as “gender neutral.” The different rights, roles and responsibilities of men and women are not taken into consideration even though the impact of climate change varies between men and women. Tasks traditionally carried out by women, such as securing food, water and fuel for cooking and heating, will, due to climate change effects, become increasingly difficult.

At the same time, women, as primary caretakers of children and household, are less mobile than men.

These aspects, combined with the disproportionate access to education and the decision-making process, make women - constituting the majority of the world’s

poor - in many contexts more vulnerable to climate change than men.

There is a general concern that gender considerations are missing from national policy dialogue and the operation of many ongoing and planned climate projects. To ensure that women benefit equally with men from climate change investments, a new approach is needed where gender concerns are incorporated in national policies and project guidelines.

In an effort to mainstream gender into climaterelated activities, NDF is co-financing a project with the Asian Development Bank (ADB) that aims to influence and improve the institutional settings for gender and climate change

considerations in Laos, Cambodia and Vietnam. The project will focus on capacitybuilding and policymaking on national and sub-national levels in the targeted countries and will involve government agencies, women’s groups and NGOs. In addition, three pilot projects will be carried out to function as a link between hands-on climate change mitigation work and the development of carbon finance-related policies. Within the pilots, methods for increasing women’s participation in the dissemination of low carbon technologies will be developed as well as tools and mechanisms to access climate financing. Furthermore, a regional knowledge hub will be established to disseminate information

throughout the region.

According to Linda Lundqvist, Country Program Manager at NDF, “NDF will follow the project closely as the outcomes and lessons learnt will be useful for future NDF projects.” The NDF grant is EUR 2 million.

Policy on Access to Information In its 31 May 2011 meeting, NDF’s Board of Directors adopted the Fund’s first Policy on Access to Information. In line with the policies of other multilateral financiers, NDF strives for openness. The policy can be found at NDF website under PUBLICATIONS.

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NDF supports two preparatory climate change projects in Central America

During recent years, several investment projects have been implemented in the public and private sectors in Central America.

Within the Inter-American Development Bank, the Structured and Corporate Finance Department (SCF) is responsible for the nonsovereign guarantee investments in Latin America and the Caribbean. NDF will finance a project that will review SCF’s clients’ facilities to identify concrete investment opportunities for climate-friendly improvements.

Central America relies heavily on fossil fuels.

Meanwhile the region’s energy efficiency could be substantially improved and renewable energy sources could be substituted for fossil fuels, especially in public and private facilities and production plants.

“Although the benefits from increased use of renewable energy and improved energy efficiency are easily demonstrated, several barriers continue to impede more efficient energy use in the region,” says Country Program Manager Hannu Eerola.

These barriers include lack of incentives and awareness of the economic and environmental benefits, and lack of adequate financial instruments to support energy efficiency and renewable energy technologies.

The project aims to carry out prefeasibility studies in SCF’s clients’ facilities to review the energy use and

propose actions for climatefriendly improvements that will bring the facilities up to date in terms of technology and operational practices. The studies are expectted to result in the implementation of renewable energy and energy efficiency projects. Based on the outcome, SCF will look to catalyse funds to finance the resulting projects.

“Smaller implementation measures not requiring major investments can be supported directly from project funds, for example simple facility upgrades, capacity development or similar that could be carried out with minimal investment,” says Eerola.

The total cost of the project is EUR 2 million, of which NDF will finance EUR 1.5 million. The focus areas for the studies are: Nicaragua, Honduras, Guatemala, El Salvador and Costa Rica.

Photo: Dreamstime

Identifying climatefriendly investment opportunities

Photo: © World Bank, Curt Carnemark

Increasing the water sectors’ resilience to climate change

Water has been recognised as one of the main means through which climate change will negatively affect the population and

the environment in Latin America. In order to develop realistic adaptation strategies that will help the region achieve sustainable

development, one needs to understand the potential impacts and costs climate change has on the water sector. NDF is together with the Inter-American Development Bank (IDB) co-financing a project that aims to lay out the foundation for future adaptation investments within the water resource sector. Through case studies on sea level rise impacts in Honduras and increased hydrologic extremes in Nicaragua, the project intends to determine the additional costs of adaptation actions in the region. The main objective of the project is to provide input to policy development and identify feasible

climate change adaptation investment projects in the water sector.

The study will complement and benefit from the recently NDF approved Economics of Climate Change Study. “There are synergies between the two projects and relevant findings will be exchanged through joint participation in workshops and other outreach activities,” says Aage Jørgensen, Country Program Manager at NDF. NDF has granted EUR 800,000 to help finance two major case studies, capacitybuilding activities, and the preliminary design of two specific investment projects.

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Photo: Liza Leclerc

Climate-proofing roads in the northern mountainous areas of Vietnam

Vietnam’s mountain ecosystems are recognised as being extremely vulnerable to climate change. Despite this fact, much of the attention with respect to climate change impacts and adaptation has been concentrated on its long coastline. To fill this gap, NDF is together with the Asian Development Bank (ADB) co-financing an infrastructure project in the northern mountainous areas of Vietnam. With a grant of EUR 2 million, NDF is adding a climate change adaptation aspect into Transport Connections in Northern Mountainous Provinces, an ADB-funded project.

The NDF-financed activities will address potential damage caused to road transport infrastructure by changes in climate, such as increased temperatures, changes in rainfall patterns

and extreme weather events.

The outcome will be better and more reliable road connectivity with increased resilience to climate change.

The NDF component will focus primarily on technical assistance and capacitybuilding of relevant stakeholders to consider climate change adaptation strategies in the design, planning and maintenance of road infrastructure.

Within NDF’s climate change mandate, infrastructure is one of NDF’s focal areas. To date, two NDF projects within road infrastructure are being implemented; one in Cambodia (Adaptation Approaches for the Transport Sector) and one in Senegal (Transport and Urban Mobility Project). The roads project in Vietnam will build on experience gained from the two ongoing projects.

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Reducing infrastructure assets’ vulnerability to climate change in Africa Sub-Saharan Africa suffers from a very weak infrastructural base, which is considered to be a key factor to why the region fails to realise its full potential for economic growth. Climate change is further deteriorating the existing infrastructure and thus jeopardising the technical, financial and economic viability of future infrastructure investments.

A few years ago, the World Bank conducted a study in Africa to find out the magnitude of the continent’s infrastructure challenges. The study resulted in the Africa Infrastructure Country Diagnostics (AICD), which is a state-ofthe-art data and analytical platform documenting the status of main infrastructure sectors in 24 countries in Sub-Saharan Africa.

NDF is now, together with other financiers, providing the necessary funds to the World Bank to conduct an additional study, which will add a climate change dimension to the AICD.

“Adding the climate change dimension to the previous study is a cost-efficient way to address the vulnerability of African infrastructure and estimate the additional costs attributable to climate change,” says Country Program Manager Hannu Eerola.

The AICD has already assembled a considerable amount of spatial data on infrastructure and financial needs of infrastructure requirements that could provide a basis for a more thorough continental analysis of the vulnerability of infrastructure assets to climate change. By layering a climate dimension on the AICD analysis, it will be possible to build a more comprehensive picture of where investments should be prioritised, and what the adaptation costs might be.

The objective of this study is to assist African countries in reducing the vulnerability of regional infrastructure assets to climate change and catalyse the policy dialogue on the development and deployment of climate finance instruments.

The new study will cover four areas of infrastructure: irrigation, power, roads and water storage. The total cost of the study is estimated at EUR 800,000, of which NDF will finance up to EUR 600,000.

NDF supports transport project in Senegal

Abdoulaye DIOP, Minister of Economy and Finance in Senegal, and Martina Jägerhorn, Country Program Manager at NDF, signed an agreement on 21 March 2011 regarding NDF’s grant contribution to the Integrating

Climate Change Adaptation to Transport project under the World Bank’s project Senegal Transport and Urban Mobility. The signing of this agreement makes Senegal the largest recipient of NDF grants.

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Reducing coastal areas’ vulnerability to climate change The coast of Tanzania is considered to be highly vulnerable to the impacts of climate change.Impacts such as sea level rise, coastal erosion, salt water intrusion, and increase in sea temperature negatively affect the coastal populations’ livelihoods.

NDF has granted EUR 800,000 for a preparation study on coastal adaptation to climate change in Tanzania. The study is co-financed with the World Bank and aims to examine the impacts climate change has on coastal areas and identify specific adaptation investments to enhance resilience.

The study will add a climate change dimension

into ongoing and planned donor- and governmentfunded activities. The objective is to promote sustainable coastal development and support Tanzania in the development and implementation of a long-term vision to decrease coastal vulnerability to climate change. “By incorporating an analysis of climate change considerations into existing programs, it will be possible to build a more comprehensive picture of where investments should be prioritised and what the adaptation costs might be,” says Aage Jørgensen, Country Program Manager at NDF.

In May, NDF signed two agreements in Hanoi

The agreement for the Adaptation Approaches for the Transport Sector Project was signed by, from the left: Mr. Helge Semb, Managing Director of NDF, Ms. Satu Santala, Chair of the Board of Directors of NDF and Mr. H.E. Vongsey Vissoth, Secretary General, Ministry of Economy and Finance.

NDF and the Government of Cambodia signed a grant agreement for the project Adaptation Approaches for the Transport Sector.

The grant contribution of EUR 4.2 million will be used for climate change adaptation measures and capacity building within the ADB co-financed Rural Roads Improvement Project.

NDF and ADB signed in the context of the ADB Annual Meeting in Hanoi a grant agreement for the project Capacity Building for Efficient Utilization of Biomass for Bioenergy and Food Security in the Greater Mekong Subregion. The project received a grant contribution of EUR 3.1 million from NDF.

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Improved sanitation and sewage management will help reduce emissions

The sanitation situation in the Greater Accra Metropolitan area in Ghana is highly unsatisfactory and unsustainable. Over the past two decades, the area’s population has increased rapidly, putting great stress on the area’s urban infrastructure.

The sewerage system has very limited coverage and a majority of new houses depend on septic tanks, pit or bucket latrines and unsewered public toilets. Large volumes of collected septage and nightsoil are dumped into the sea or temporary dumps and pits, causing serious environmental problems, including methane emissions.

To strengthen the financial and operational performance of the Greater Accra septage management operations, NDF will co-finance the Greater Accra Septage Digesters project together with the World Bank. The NDF grant of EUR 2.5 million will be used for the design of two identical anaerobic septage/nightsoil digester plants and for cofinancing the works and

equipment. Each of the plants will have the capacity to receive 500m3 of septage and faecal sludge per day.

The project is primarily an environmental sanitation project but has climate change mitigation benefits. The greenhouse gas (GHG) emissions resulting from poor management of septage will be reduced. In addition, renewable energy in the form of biogas from the anaerobic digesters will substitute the use of fossil fuels. The annual emissions reduction potential from the two plants together is estimated at 7,800 tCO2e. Over the range of 20-25 years of expected lifetime of the plants, the total amount of emission reductions could range from 160,000 to 200,000 tCO2e.

Septage and sludge tipping fees, revenues from sales of certified emission reductions and revenues from sales of biogas-based electricity will enhance the sustainability of the area’s septage management operations.

GRANT FINANCING FOR CLIMATE CHANGE PROJECTS IN LOW-INCOME COUNTRIES The Nordic Development Fund (NDF) provides grant 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 Libris Oy.