Closing the Climate Finance Gap in Fragile and Conflict Affected Settings

Fragile and conflict-affected countries are amongst those most vulnerable to the impacts of climate change. A key reason is that countries affected by FCV often lack the financial and technical resources needed to implement adaptation at scale. While international climate finance to support adaptation in developing countries has increased rapidly in recent years, only a fraction of available funds goes to FCV-affected countries. The implications are clear: those most vulnerable in fragile contexts and struggling to receive finance needed to support vital climate action.

In this session we explored key barriers and opportunities for scaling access to climate finance in FCV-affected settings, bringing together perspectives from funders, intermediaries and recipient governments. The discussion highlighted best practices and novel partnerships needed in accelerating access to finance in FCV environments, as well as exploring how momentum from COP28’s Relief, Recovery and Peace Declaration can be built on going forward.

In Somalia: we have to decide whether to continue funding the war, invest in the productive sector, or allocate resources to the current humanitarian crisis that is resulting from drought and floods. It is about time to come up with a very specific, harmonized, and tailored approach to fragile countries. We don’t have the connection between humanitarian crisis to development.

We need climate financing that is predictable, sustainable, and accessible. Adaptation should be the priority. Mitigation is secondary in fragile settings.

Partners should invest more in government-led platforms. If so, we can fully maximize investments (by moving away from aid fragmentation). These platforms have led to policy dialogue, identifying priorities. We want to replicate this model in countries without platforms.

We must make the long-term investments in institutional capacity building, including at the subnational level.

We need to harmonize procedures to access climate finance and we need to move faster and to reduce transaction costs.

WB increased share of climate finance in programs to 45 percent – and specifically for adaptation. Islamic Development Bank is pushing portfolio to climate finance to 35 percent. But it’s not enough. We need to work on derisking - that is the future of financing.

We need more sophisticated ways for financing; we need to introduce new ways for donors to contribute to the development Banks – ‘think outside the box.’

Doing core development work better and faster is being responsive to the climate agenda. We know that agriculture helps climate, so we need better agriculture projects. Also need to put climate and crisis response toolkit in country programs.

Host by World Bank, ODI, G7+

Moderator: Andrew Herscowitz, Executive Director, ODI North America

Speakers:

Salah Ahmed Jama, Deputy Prime Minister, Somalia

Kenyeh Barlay, Chair of g7+, Minister of Planning and Economic Development, Sierra Leone

Majid Al-Suwaidi, Director-General, COP28, UAE COP28 Presidency

Ousmane Diagana, Vice President, Western and Central Africa, World Bank

Alexia Latortue, Assistant Secretary for International Trade and Development, US Department of the Treasury

Issa Faye, Director, General Global Practice and Partnerships, Islamic Development Bank