This study examines the landscape of climate finance in Gujarat and Madhya Pradesh, and outlines strategies for enabling the states to mobilise capital.
Background
Over the last decade or so, there has been growing awareness at the Central and sub-national levels in India regarding the importance of action plans on climate change. However, climate finance requirements are very high and will need to be met through a combination of domestic and international climate finance. Given this context, this project seeks to sensitise State department officials of two states, Gujarat and Madhya Pradesh, about the landscape of climate finance, both domestic and international, and the modalities involved in accessing it. It also aims to facilitate the documentation of potential concept notes for States. These concept notes can then be developed further and submitted to either domestic or domestic international climate funds.
Approach
As part of this project, stakeholder consultation workshops were organised in each state, which helped in gathering first-hand information on their climate initiatives and sensitising them on funding sources. Based on an in-depth understanding of the barriers faced by the implementing agencies in preparing concept notes for dedicated climate funds, a set of draft guidelines were proposed to be considered during such submissions. Another integral component of this project was to take stock of the states’ engagement with NABARD which is the Accredited Entity (AE) for the National Adaptation Fund on Climate Change (NAFCC) and the Green Climate Fund (GCF) in India. The Project Report also provides specific recommendations on enhancing this engagement as well, based on detailed feedback and inputs from select States.
Key Findings
While most states are actively seeking funding to implement components of their respective SAPCCs, the critical role of the NABARD in motivating concept note preparation for the NAFCC has been widely recognised. There is sufficient procedural clarity in the roles and inputs to be received at each stage of concept note submission and DPR preparation, among the EEs, nodal agencies and the NABARD representatives. For those projects that are already being implemented, it is understood that the internal progress is documented in customised formats of the EE/ relevant departments.
Implications
The project engagement suggests that the identification of climate co-benefits of development schemes forms the starting point of estimating additional funding needs of the government for exclusive climate actions. This can pave the way for considering incremental changes in the existing design of ongoing developmental programmes to focus more on climate mitigation or adaptation. There is a need for a comprehensive approach to build state capacity for identifying ideas and developing potential concept notes, and dovetailing them to meet the investment criteria and modalities of such funds.