Government urged to access climate fund directly, not through WB

THE Institute for Climate and Sustainable Cities (iCSC) is urging the Philippine government to access the United Nations Adaptation Fund (AF) directly instead of going through channels like the Washington-based lender, the World Bank Group.

In a statement sent to the BusinessMirror, the iCSC said there is a proposal to have the $15-million Flood Early Warning System project—implemented by the Department of Public Works and Highways (DPWH) and the Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa)—funded by the AF through the World Bank.

The iCSC said the World Bank is trying to push for “more climate loans” instead of the country accessing the multibillion-dollar AF directly by submitting a proposal to the Adaptation Fund Board (AFB) which manages the fund.

The AF is the first financial instrument under the UN Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol (KP).

“The World Bank-crafted proposal shows the World Bank inserting itself as the Philippine funding conduit to the AF. The document shows the World Bank colluding with unwitting officials from the [DPWH] and the [Pagasa] through a prospective $15-million AF grant. Under the proposal, the World Bank serves as an intermediary institution that will access the AF on behalf of the Philippines,” the statement said.

“It carries provisions that deliberately contradict the Philippine position in international climate-finance talks, which champions the promotion and operationalization of adaptation finance directly accessed by developing countries and free of MDB intermediaries. The proposal is not based on the country’s adaptation action plan and will likely squander urgently needed financial resources from the AF,” the statement added.

Joe Tuyor, World Bank East Asia and the Pacific Region Philippine Sustainable Development Unit Senior Operations Officer, told the BusinessMirror in a phone interview over the weekend that the details of the project have reached the bank, but the matter has not yet been acted upon because the project was not endorsed by the Department of Environment and Natural Resources (DENR) and the Climate Change Commission (CCC) for funding under the AF.

Tuyor explained that accessing the AF could be done through multilaterals like the World Bank and United Nations Development Programme (UNDP), or directly by submitting a proposal to the AF board.

He stressed that it is still for the Philippine government to decide whether or not to have a particular project submitted for funding under the AF, and what kind of modality it will use to obtain AF funding.

“Countries can submit proposals direct to the adaptation board without going through the World Bank or UNDP, the other implementing agency of the adaptation fund. The guidelines for accessing the fund is available in the fund’s web site,” Tuyor said in a text message.

Tuyor added that based on their discussions with State officials in June, the bank and the government decided to postpone the evaluation of the proposal until after the Philippine Action Plan is drafted and completed by the CCC.

As the country’s sole policymaking body on climate change and other related programs and projects in the government, the iCSC said ensuring that projects like these are closely monitored is a priority.

However, in a recent statement, Senate President Juan Ponce Enrile said some actions of the CCC, a collegial body headed by the President, have only been decided by the vice chairman, the position occupied by former Environment secretary Heherson Alvarez.

Because of this, Enrile is also pushing for the amendment of Republic Act 9729 or the Climate Change Act, which created the CCC.

“This is a case of malicious intention on the part of the World Bank, which should be aware of the country’s long-held preference for the direct-access modality of the adaptation fund. But this is also an indication of the Commission’s cluelessness. This condition means it is part of the reason behind the governance chaos plaguing the administration of climate finance in the country,” iCSC Executive Director Renato Redentor Constantino said.

Alvarez, on the other hand, said the CCC is aware of all adaptation projects, including the ones discussed before the CCC was given its full mandate.

He said he has already submitted the country’s National Framework Strategy on Climate Change to a United Nations body to access the AF in a recent conference in Bonn, Germany.

Alvarez also said having a framework sent the signal to the UN that the Philippines is now ready to access the fund. He also said that on Tuesday, the CCC will meet with the DENR to discuss how to access the fund and what projects can be funded under the AF.

“The WB is clearly to blame for attempting to pull a fast one. But we have become easy prey because of the commission’s incompetence. The vice chairman is unaware of the World Bank (WB) submission. Worse, the same person has tried to access the AF by submitting the wrong document to the wrong body,” Constantino added.

Based on the project document obtained by the iCSC, the lion’s share of the funding will be for the $5.3-million National Early Warning Center, which will command and control the early warning system.

Other big items to be funded include the $2.4-million procurement of hardware and software for the system, and $2-million feasibility study for priority investments for the Bank’s identified Master plan for flood management in Metro Manila.

“The WB proposal intends to fund yet more feasibility studies [costing $2 million], for priority investments to be identified under a WB-financed flood-management plan, instead of concrete-adaptation projects called for by the Philippines. In addition, though feasibility studies are critical, the effort must at least be based on a country’s agreed priority needs,” the iCSC said.

Other items to be financed include the $1.514-million project to rehabilitate and upgrade flood control operation systems and the $1.15-million management fee for the WB.

“The proposal will waste $1.514 million to rehabilitate failed projects which, based on flawed designs, should probably not have been financed in the first place,” the iCSC said. “The total project cost of the WB proposal amounts to $13.85 million and allocates for the WB $2-million representing management costs, bringing the total financing proposal to $15 million.”

The iCSC said the Philippines played a central role in pushing for the creation of the AF, which represents, among global climate funds, the benchmark in terms of accountability principles, democratic governance, and innovative funding modalities.

The AF has the potential to generate greater resources. Unlike other global climate funds, the AF is not Official Development Assistance-driven and instead is funded by a 2-percent levy on Clean Development Mechanism (CDM) transactions.

Currently, iCSC data showed that revenues generated from the CDM levy are projected to be between $160 million and $950 million. Ongoing discussions indicate that the application of levies on international air travel may generate an additional $4-10 billion annually. The AF has also begun to receive bilateral funds, with Spain contributing $60 million recently. –Cai U. Ordinario / Reporter, Businessmirror