Guidelines for Designing Bankable Adaptation Projects

Within the context of the United Nations Framework Convention on Climate Change (UNFCCC, 1992) governments have agreed on options that will facilitate the effective, equitable, and efficient delivery of climate finance. This process has reinforced the importance of strong national climate strategies as well as in-country institutional structures. A major theme within these discussions has been “direct access” to climate finance, and over the past decade the volume of nance and number of sources of such finance have grown rapidly.

India provides an example of one country where good progress has been made on identifying the best national partners to develop, prepare, and implement bankable development projects and programs that are financed both internationally and domestically. This paper describes how this was achieved through the process in support of the National Bank for Agriculture and Rural Development (NABARD) in its role as the national implementing entity (NIE) for the Adaptation Fund (AF). The paper also suggests that other countries, especially smaller countries such as the Pacific Island Countries, can make similar progress by following the NABARD example.  

The Guidelines are organized based on a typical project cycle, which has four stages: (i) project identification/ problem diagnosis of the baseline situation; (ii) project design, including appraisal – also called project preparation; (iii) project implementation; and (iv) monitoring and evaluation. Climate analysis must be integrated into each stage. Design and appraisal are part of the project preparation phase, extending up to the approval stage and before implementation starts. This requires a good understanding of the basic project preparation process and the format and content required for submitting project proposals for consideration by the AF Board.