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Download PDF A billion dollar ‘multi-donor trust fund’ for Bangladesh is on the cards to finance long-term climate change mitigation and adaptation in the public and private sector.
The national ‘trust’ would pool money obtained from different national and multilateral climate-change funds and be managed by a ‘board of trustees’. But the scale and scopes are currently under discussion, according to government and donor sources.
The government and donor officials close to the process say the fund is likely to be around $1 billion as it would finance long-term climate change adaptation plans in sectors varied from education and health to agriculture.
“The fund has not really taken shape yet. A trust has to be formed, the trustees have to be decided who will give the money, distribution of the fund, and the role of the government and donors — all have to be fixed,” Economic Relations Division Secretary Md Aminul Islam Bhuiyan told The Daily Star.
However, unlike other ‘trust-funds’, this would be accessible to the government agencies, NGOs, and the private sector who design and implement climate change mitigation and adaptation projects.
Recently, Raja Debasish Roy, special assistant to the chief adviser on environment, has strongly stressed on clear government oversight of such a ‘multi-donor funding mechanism’. But the fund would also be designed to be flexible and less bureaucratic.
Despite being at the forefront of the countries affected by climate changes, Bangladesh has received only $10 million in foreign aid over the past decade, even though recent donor estimates put future climate change adaptation bill for the country at over $1 billion.
Talking to The Daily Star, a number of climate change experts, NGOs and donors have also raised questions about Bangladesh’s ability to absorb such a huge fund and implement projects in such a wide variety of sectors based on declining implementation rate of the Annual Development Plan.
The government says its implementation rate has significantly improved in the past decades and capabilities are already expanding. In addition, ERD Secretary Bhuiyan said: “The civil society [NGOs] and private sector have also increased their capabilities, so as a nation, Bangladesh’s capacity has improved by leaps and bounds.”
The idea of the fund was floated in the aftermath of Cyclone Sidr and World Bank-led study that projected a $4 billion need for climate change adaptation, protection of the southern coast and disaster reconstruction.
The new mechanism would ensure that Bangladesh government and NGOs would locally compete for project-funds rather than go through the time-consuming and competitive bid for global climate change funds.
The government is currently looking into linking the fund to the three-phase 15-year disaster recovery project of $4 billion. But at this point, the trust-fund is focused exclusively on climate change mitigation and adaptation, said the ERD secretary.
Currently, the World Bank, the European Commission, Japan and Britain’s Department for International Development (DFID) are willing to provide funds for the trust.
In 2006, 32 donor countries pledged $3.13 billion to fund projects between 2006 and 2010.
Japan also has a $10 billion “Cool Earth” partnership for climate change, out of which $2 billon would be given to assist developing countries like Bangladesh for adaptation.
The Global Environment Facility (GEF) allocates and disburses about $250 million a year for projects for developing energy efficiency, renewable energy, and sustainable transportation, as the financial mechanism of the Climate Convention.
Bangladesh could also take advantage of two special funds under the UN Framework Convention on Climate Change (UNFCCC) — the Least Developed Countries Fund, and the Special Climate Change Fund.
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