Climate change adaptation solutions for local authorities in the Pacific
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Micronesia (Federated States of) SPC
16 January 2020
Climate change adaptation solutions for local authorities in the Project/Programme Title: Federated States of Micronesia
Country(ies): Federated States of Micronesia (FSM)
National Designated FSM Department of Finance and Administration Authority(ies) (NDA):
Accredited Entity(ies) (AE): Pacific Community (SPC)
Date of first submission/ [2019-06-24] [V.1] version number:
Date of current submission/ [2020-01-16] [V.3] version number
Please submit the completed form to [email protected], using the following name convention in the subject line and file name: “CN-[Accredited Entity or Country]-YYYYMMDD”
PROJECT / PROGRAMME CONCEPT NOTE Template V.2.2
Notes • The maximum number of pages should not exceed 12 pages, excluding annexes. Proposals exceeding the prescribed length will not be assessed within the indicative service standard time of 30 days. • As per the Information Disclosure Policy, the concept note, and additional documents provided to the Secretariat can be disclosed unless marked by the Accredited Entity(ies) (or NDAs) as confidential. • The relevant National Designated Authority(ies) will be informed by the Secretariat of the concept note upon receipt. • NDA can also submit the concept note directly with or without an identified accredited entity at this stage. In this case, they can leave blank the section related to the accredited entity. The Secretariat will inform the accredited entity(ies) nominated by the NDA, if any. • Accredited Entities and/or NDAs are encouraged to submit a Concept Note before making a request for project preparation support from the Project Preparation Facility (PPF). • Further information on GCF concept note preparation can be found on GCF website Funding Projects Fine Print.
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A. Project/Programme Summary (max. 1 page) ☐ Project A.2. Public or ☒ Public sector A.1. Project or programme ☒ Programme private sector ☐ Private sector Yes ☒ No ☐ A.3. Is the CN submitted in ☐ Confidential If yes, specify the RFP: Enhancing A.4. Confidentiality1 response to an RFP? ☒ Not confidential Direct Access ______
Mitigation: Reduced emissions from:
☐ Energy access and power generation
☐ Low emission transport
☐ Buildings, cities and industries and appliances A.5. Indicate the result ☐ Forestry and land use areas for the Adaptation: Increased resilience of: project/programme ☒ Most vulnerable people and communities
☒ Health and well-being, and food and water security
☒ Infrastructure and built environment
☒ Ecosystem and ecosystem services A.7. Estimated 65 municipalities A.6. Estimated mitigation adaptation impact 71% of FSM population impact (tCO2eq over (number of direct (to be confirmed when lifespan) beneficiaries and % of developing the full population) proposal) Amount: USD 2,000,000 to be A.8. Indicative total project confirmed when developing the full A.9. Indicative GCF Amount: USD 15 cost (GCF + co-finance) proposal funding requested million
A.10. Mark the type of financial instrument ☒ Grant ☐ Reimbursable grant ☐ Guarantees ☐ Equity requested for the GCF ☐ Subordinated loan ☐ Senior Loan ☐ Other: specify______funding A.12. Estimated A.11. Estimated duration a) disbursement period: 6 years project/ Programme 2020-2035 of project/ programme: b) repayment period, if applicable: lifespan Yes ☐ No ☒ A.13. Is funding from the Other support received ☒ If so, by ☐ A or I-1 Project Preparation who: The USAID Climate Ready A.14. ESS category3 ☒ B or I-2 Facility requested?2 project has agreed to support the ☐ C or I-3 full proposal development A.15. Is the CN aligned A.16. Has the CN been Yes ☒ No ☐ with your accreditation Yes ☒ No ☐ shared with the NDA? standard?
Yes ☒ No ☐ A.18. Is the CN A.17. AMA signed (if If no, specify the status of AMA included in the Entity Yes ☒ No ☐ submitted by AE) negotiations and expected date of Work Programme? signing: N/A
The programme aims to establish a dedicated facility through the Enhancing Direct A.19. Project/Programme Access (EDA) pilot. The objective is to strengthen climate change resilience in the rationale, objectives and Federated States of Micronesia through support to local authorities for pragmatic and approach of impact-driven adaptation actions to mitigate the negative consequences of climate programme/project (max change. 100 words) The programme will be managed by SPC’s Climate Change and Environmental Sustainability programme with a relay in SPC sub regional Micronesian office in Pohnpei,
1 Concept notes (or sections of) not marked as confidential may be published in accordance with the Information Disclosure Policy (Decision B.12/35) and the Review of the Initial Proposal Approval Process (Decision B.17/18). 2 See here for access to project preparation support request template and guidelines 3 Refer to the Fund’s environmental and social safeguards (Decision B.07/02)
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in the NDA office and in the four States. It will consist in 1) an empowerment component to bring up abilities of local authorities to engage in climate change adaptation and 2) a priority project grants mechanism. Both will bridge the gap that currently keeps local authorities under-resourced although they have a key role to play in climate change adaptation.
B. Project/Programme Information (max. 8 pages) B.1. Context and baseline (max. 2 pages) Describe the climate vulnerabilities and impacts, GHG emissions profile, and mitigation and adaptation needs that the prospective intervention is envisaged to address. FSM consists of 607 small islands, of which 74 are inhabited. The federation is formed by the four States of Yap, Chuuk, Pohnpei, and Kosrae. States are further divided into 76 municipalities (204 in Yap, 40 in Chuuk, 12 in Pohnpei, 4 in Kosrae). The total population in 2018 is 105,3005. Around 22% of the population live in urban areas. Half of the population engages in subsistence and mixed subsistence livelihoods.
The total amount of CO2 emitted in the FSM as a result of fossil fuel combustion is estimated at 151,910 metric ton (0.003% of global CO2 emissions). CO2 emissions have decreased by 7.7% since 1994. Through its Nationally Determined Contribution, the FSM commits to unconditionally reduce by 28% in 2025 its GHGs emissions below emissions in year 2000. The climate is strongly influenced by the northeast trade winds, generating consistently warm temperatures (27ºC) with little seasonal variation. Since the 1950s, temperatures increased up to 0.14 ºC per decade. The four States receive plentiful rainfall (3,100 to 7,500 mm depending on the State), with recent declines in annual rainfall in Chuuk, Pohnpei, and Yap of up to -49 mm per decade. The region is affected by storms and typhoons that are generally more severe in the western islands, as well as by periods of drought and excessive rainfall associated with different phases of the El Nino-Southern Oscillation. FSM is located in the region that has experienced some of the highest rates of sea level rise (5-10 mm per year). Since 2000, FSM has been occasionally experiencing a periodic rise of sea level in the low-lying coastal areas of low and high islands. These “king tides” cause marine inundation that damages groundwater resources, taro beds, and soil, especially on low atoll islets. On high islands, coastal communities are experiencing intensifying storm runoff and rising ocean waters, resulting in increased flooding and drainage problems. Key climate projections for FSM include: increasing air6 and sea-surface temperatures (SST); more very hot days; altered rainfall patterns (more extreme rainfall events; possible decreased frequency of droughts); and less frequent but more severe typhoons. In addition, sea level will continue to rise7, ocean acidification is expected to continue, and the risk of coral bleaching is expected to increase8. Climate change magnifies development challenges, compounds negative impacts of past and current resource management practices, and increases risks to communities, economies and social constructs. FSM is amongst the most vulnerable countries in the world for a number of reasons, including high dependence on natural resources, low economic diversification, lack of human and financial capacity and high exposure to weather and natural hazards. Possible consequences of climate variability and change are numerous and alarming: disappearance of some low-lying islands and submersion of inhabited coastlines, floods, droughts, reduction of the quality and quantity of water supplies, declining agricultural productivity, declining productivity of ecosystems and breeding grounds, shrinking reef and fisheries resources and/or migration of some important stocks such as tuna, more frequent episodes of coral bleaching with a higher risk of mortality, and reduced effectiveness of natural coastal defences. Climate change will also likely significantly increase health risks, especially vector- and water-borne disease distribution. In addition, some key infrastructures are located in highly exposed areas and the impact of climate change and associated extreme weather events is already visible in some cases. Taken together, climate change impacts associated with high-emission scenarios would destroy the backbones of FSM economy including tourism, fisheries and agriculture.
4 Yap’s constitution recognises a role for traditional leaders and customs in governance. Yap Proper has ten municipalities, while the outlying islands are separated into four precincts, each of which consists of several islands or atolls with one mayor or chief. Municipalities are most often led by the village chief, although they can sometimes be elected officials. 5 https://sdd.spc.int/fm 6 By 2030, under a high emissions scenario (RCP 8.5), the increase in temperature is projected to be of 0.6–1.1°C. 7 By 2030, under a high emissions scenario (RCP 8.5), this rise in sea level is projected to be of 16.1–35.4 inches (41–90 cm). 8 A trajectory of about + 3 ° C corresponding to the current INDCs under the Paris Agreement would be catastrophic for FSM. With a very ambitious + 1.5 ° C, the recent IPCC special report predicts, with a high level of confidence, the disappearance of 70 to 90% of coral reefs worldwide. This is expected between 2030 and 2052 if warming continues at current rate.
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The communities most vulnerable to the effects of climate change in FSM include populations at risk of being (or that have already been) displaced, for example residents of low-lying atolls or those living close to coasts, rivers and hillsides; women; those at the extremes of age (children and the elderly); those with pre-existing health problems (co-morbid conditions, the disabled); certain occupations (fishermen, farmers, outdoor workers); the poor and socially disadvantaged; and those that lack access to public information broadcasts and communications. Please indicate how the project fits in with the country’s national priorities and its full ownership of the concept. Is the project/programme directly contributing to the country’s INDC/NDC or national climate strategies or other plans such as NAMAs, NAPs or equivalent? If so, please describe which priorities identified in these documents the proposed project is aiming to address and/or improve. The capacity of FSM to adapt and increase its resilience to the aforementioned changes is a major issue today and for decades to come. This is reflected in the country’s NDC. FSM, under the direction of the National Designated Authority (NDA) for the GCF at the FSM Department of Finance and Administration, and in consultation with all four States, developed its GCF Country Program, in alignment, among others, with FSM’s twenty year (2004 to 2023) Strategic Development Plan (SDP), the Integrated Disaster Risk Management and Climate Change Policy (CC Policy) and associated Climate Change Act (2014), and the Joint State Action Plans for Disaster Risk Management and Climate Change (JSAPs), prepared by each State in 2015. Through the GCF Readiness Program (phase II currently implemented by SPC), FSM is working with partners to develop a national adaptation plan (NAP) and a green growth strategy (GGS). In these policies and strategies, the States and their municipalities are identified as key stakeholders in governance arrangements and planning processes for climate change adaptation as well as in adaptation projects implementation (see for instance FSM’s JSAPs). It is also expected that future NAP development efforts in FSM would involve the States and municipalities (as per UNFCCC Technical guidelines for the national adaptation plan process). Local authorities9 such as municipalities in FSM are increasingly seen globally as key actors in climate change adaptation and in building resilience to climate change (OECD, 2009; UNCDF, UNDP and UNEP, 2010; UNFCCC, 2015). UN Sustainable Development Goal 13 on climate action indicates that local governments are critical to strengthening resilience and adaptive capacity to climate-related hazards and natural disasters in all countries (UN, 2016). The recent IPCC special report also emphasizes the important role that subnational governments play in developing and reinforcing measures for reducing weather- and climate-related risks (IPCC, 2018). The Framework for Resilient Development in the Pacific (FRDP) highlights the key role of subnational governments and administrations in undertaking priority actions to reach one of its three goals (Goal 1: Strengthened Integrated Adaptation and Risk Reduction to Enhance Resilience to Climate Change and Disasters). In practice local authorities are uniquely positioned to tackle climate change-related challenges: - Climate change adaptation responses differ from place to place and are highly context sensitive. Local authorities are well positioned to understand the diversity and complexity of local ecosystems as well as the needs and priorities of local communities. And, to be fully effective, large-scale investments need local complementary actions. - Climate change adaptation largely falls within the scope of the mandate and responsibilities of local authorities. Although their mandates vary from country to country, local authorities have historically been responsible for land use planning, environmental and construction regulation, and investments in infrastructure including irrigation and drainage and defence from natural hazards. These activities are fundamental to climate change adaptation and to building community resilience. - Local authorities have unique local-level opportunities and potential to work across sectors and to bundle activities, which – given the appropriate funding and conditions – will ensure enhanced resilience. - Climate change adaptation requires effective coordination between various stakeholders with different mandates and interests. Local authorities have the legitimacy and convening power to coordinate, co-finance and interact with stakeholders including national-level institutions, civil society bodies, the private sector and various local government departments. In FSM, while significant efforts are being dedicated or planned to strengthen climate change adaptation capacities at the national and States levels, there are currently no dedicated programme to support local authorities (i.e. municipalities) through climate change adaptation readiness and priority projects to meet pre-identified and substantial needs at the local level (e.g. small-scale resilient infrastructures, food and water security, waste management).
9 The terms “local authority” and “local government” can be used interchangeably. Both cover the broad range of local government structures, mandates and authorities specific to each country context (e.g. community councils, municipalities, districts, provinces etc.). In the context of FSM, it refers to municipalities.
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This is why the NDA, together with stakeholders from the States, CSOs and municipalities, and SPC as the Accredited Entity, are co-developing 10 this EDA programme to empower municipalities to implement priority climate change adaptation projects. In addition to directly contributing to national and States climate change policies and strategies, the programme is fully aligned with the FSM GCF Country Programme (CP), in which capacity building, including at the municipal level, is listed as one of the three enabling pillars to strengthen FSM’s readiness and to access GCF funding. Describe the main root causes and barriers (social, gender, fiscal, regulatory, technological, financial, ecological, institutional, etc.) that need to be addressed. There is strong evidence that local authorities in FSM lack resources and capacities to contribute effectively to climate change adaptation and resilience building. More specifically, local authorities face: - A strong lack of operational capacities (e.g. human resources, equipment, tools, finance & procurement systems) and skills (e.g. financial management incl. for grants, project management, MEL) - A lack of awareness, knowledge and incentives to take action on the issue of climate change adaptation; - An inability to finance the costs of climate change adaptation; - A lack of appropriate budgetary allocations from the national level; - A lack of financing for revenue-generating public/private adaptation actions at the local level; - A difficulty to directly access climate finance, which is mainly available through national or international programmes. In summary, local authorities in FSM are in a unique position to identify the climate change adaptation responses that best meet local needs, and typically have the mandate to undertake the small- to medium-sized adaptation investments required for building climate resilience. Yet they lack the resources to do so – particularly in a manner aligned with established local decision-making processes and planning, budgeting and budget execution cycles.
B.2. Project/Programme description (max. 3 pages) Describe the expected set of components/outputs and subcomponents/activities to address the above barriers identified that will lead to the expected outcomes. This EDA pilot programme will establish a dedicated facility to strengthen the capacity of local authorities (LAs) in FSM to adapt to climate change and to address urgent, top priority vulnerability issues, with support and facilitation from the NDA. The facility will empower all interested LAs by providing them with organisational and individual capacity-building in resilience and priority adaptation project development. Then, the facility will release, through the NDA and States focal points, call(s) for proposals for LAs to submit priority adaptation projects according to a set of pre-identified criteria. Direct grants are provided to partner LAs (or support organization) to implement selected projects. In parallel, additional empowerment activities are conducted upon partner LAs demand as a support mechanisms for sustainability. The programme has two components. Component 1 - Local authorities empowerment
Expected outcome : Local authorities are empowered to deliver climate change adaptation services to their populations Activities: - Project development workshops (at least one per State), trainings & mentoring (incl. one-on-one and remote support) for component 2 (including priority action identification, guidelines on eligible activities and how to meet the assessment criteria etc.) - Optional project preparation grants (up to USD 20,000) for project development (from project concept note to full proposal) - Resilience training for local authorities staff and elected and appointed officials - Organisational audit to improve LAs' service delivery for resilience: evaluate and improve the effectiveness of risk management, control, and governance processes. Coaching and potential reorganisation recommendations may address the allocation of tasks and responsibilities, coordination and control mechanisms, rules and procedures, and financial management, for LAs administrations to be more fit for resilience building in their jurisdiction. - Project management (incl. reporting, finance, procurement, MEL) workshops (at least one per State), trainings & mentoring (incl. one-on-one and remote support) for component 2 - Other empowerment activities upon targeted LAs’ demand based on audit results as a support mechanism for sustainability of projects implemented in component 2 o Vulnerability and resilience assessment in local authorities jurisdictions (in line with relevant national policies and frameworks action plans)
10 A workshop was organized by FSM NDA and the Pacific Community (SPC) to discuss the geographic and thematic scope of the proposed EDA programme as well as its implementation modalities (see workshop report in annex 1).
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o Development of municipal disaster plans, development of municipal climate change and DRM zoning regulations o Innovative financial mechanisms at local or national scales for LAs (e.g. local Trust funds) - Ad-hoc support to develop and foster a network of development partners, incl. knowledge sharing mechanisms to support an effective community of practice across municipalities (e.g. through workshops, bilateral exchanges etc.) Component 2 - Priority project implementation Expected outcome: Priority adaptation issue(s) addressed in selected local authorities Activities: - Grants allocation to local authorities for priority adaptation projects: USD 100,000 – USD 500,00011. Grants duration is from 1 to five years. Particularly vulnerable, small and/or under-resourced municipalities may apply for smaller-grants upon approval from the States, the NDA & SPC. - Priority adaptation project implementation. Projects can cover three thematic areas12 and shall align with the GCF results management framework and in particular the climate impact areas that GCF can finance under its policies: o Climate-induced disaster risk reduction and coastal protection e.g. equipping municipalities with necessary supplies to respond to disaster (e.g. drugs, provision), building shelter, retrofitting existing buildings (e.g. cyclone proofing, solar panels, rainwater tanks), building green (e.g. mangroves) and grey (e.g. sea walls) small-scale coastal infrastructures (as appropriate, use of endemic species planting, wave breakers, man-made channels), watershed reforestation for landslide protection and flooding control; o Food security e.g. setting up nurseries for agroforestry and climate change resilient local food crops (e.g. seedlings of salt resistant crops), food security practical trainings, locally-managed marine areas/marine protected areas, fish aggregating devices; o Water security e.g. procurement and distribution of rain water collection tanks / pipes, rehabilitating water catchments, installing solar-powered water pumps; - Grants projects management, including communication, reporting, monitoring, evaluation and learning.
In terms of rationale, please describe the theory of change and provide information on how it serves to shift the development pathway toward a more low-emissions and/or climate resilient direction, in line with the Fund’s goals and objectives. The programme aims at supporting municipalities through: (1) capacity-building, given their lack of operational capacities as well as knowledge, awareness, and skills for climate change adaptation; and (2) grants for adaptation projects implementation, given their lack of resources and access to climate finance, to address local climate variability and change problems in the areas of disaster risk reduction and coastal protection (e.g. impacts on livelihood and infrastructure from sea-level rise and more severe typhoon), water security and food security (e.g. impacts from altered rainfall patterns, increasing air and sea-surface temperature on water and food resources). See theory of change in annex 2.
Describe how activities in the proposal are consistent with national regulatory and legal framework, if applicable. In FSM, empowering municipalities to cope with climate change and implementing priority adaptation projects to deal with disaster risks reduction, food and water security issues is fully consistent with most of JSAPs objectives and in line with the Integrated Disaster Risk Management and Climate Change Policy.
Describe in what way the Accredited Entity(ies) is well placed to undertake the planned activities and what will be the implementation arrangements with the executing entity(ies) and implementing partners. The programme would be managed by SPC which is a regional Direct Access Entity with the following fiduciary functions: small project management (category B E&S) and grants award. SPC’s comparative advantage lies in: 1) Its extensive ties with Pacific Islands governments, administrations, agencies and partners in all Pacific island countries, and in particular FSM where SPC has its Micronesia regional office. 2) Its broad mandate on development issues – inter alia health, agriculture and forestry, fisheries, energy and transport, water, climate change and environmental sustainability, gender in development, human rights and natural resource management.
11 Past and current small-grants projects/programmes in FSM have been or are below USD 50,000, hence the focus on the higher range for this EDA proposal. 12 Examples listed in this concept note are based on consultations, existing adaptation projects activities (e.g. Adaptation Fund project, SPC RENI project) and JSAP action plans.
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3) Its large funding base with multi-lateral and bilateral donors, allowing for cofinancing options, cost sharing and combined programmatic funding. 4) Its extensive international partnerships which range from UN agencies to other IGOs, NGOs, civil society groups, the informal sector etc., including in FSM.
The programme would be managed by SPC’s Climate Change and Environmental Sustainability (CCES) programme at Noumea Headquarters, through its Climate Finance Unit, which is also SPC’s GCF focal point. The CCES programme’s three main objectives are to enhance capacity of countries to address climate change and build resilience, to enhance SPC’s contribution to the regional and international collaborative effort to address climate change and to enhance SPC’s climate and environmental accountability. The CCES programme is experienced in managing projects with budgets comparable to the facility (e.g. ongoing PROTEGE project funded under EDF 11 with EUR 38 million over three years).
Implementation arrangements Figures 1 below presents an overview of the programme implementation arrangements, which will be further refined and confirmed through stakeholder consultations during the full proposal development (incl. feasibility study).
Figure 1 Overall programme implementation arrangements
Step 1: establishing governance structure SPC CCES Climate Finance Unit at Noumea Headquarters is responsible for the overall programme management, with a Programme manager and a Finance officer in charge of overall reporting to the GCF, procurement, finance, and MEL. A dedicated Programme Coordination Unit is hosted at SPC regional office in FSM, with one Programme Coordinator, one Programme administrative assistant, and one Grants Officer. SPC signs a grant agreement with FSM covering the whole EDA programme duration and stating each partner’s responsibility. The NDA acts as official focal points in-country. Grant agreement covers the NDA’s role in the facility, including as appropriate: local recruitment of one staff at the NDA office; local recruitment of one staff to support the States GCF focal points and to serve as liaison between local authorities, the NDA and SPC; domestic travel; office equipment (laptop etc.). The NDA, together with SPC, decide of a national decision-making body to be chaired by the NDA and to conduct the final stage review and approval of preselected project proposals submitted by municipalities as part of component 2. Initial in-country consultations with stakeholders suggested the creation of a dedicated body with the following
PROJECT / PROGRAMME CONCEPT NOTE Template V.2.2 GREEN CLIMATE FUND | PAGE 7 OF 4 composition: a representative from each State appointed by governors, a representative from the NDA, from the FSM Health and Social Affairs Department (gender and social inclusion specialist), from the Department of Environment, Climate Change & Emergency Management (DECEM), from the Department of Resource & Development, from the Department of Transportation, Communication, and Infrastructure, a representative from SPC, and a representative of CSOs (for instance from the Micronesian Conservation Trust). SPC forms an Independent Assessment Panel (following a competitive process - call for tender). To the extent possible, the panel includes one or two national experts, in addition to external experts. Its composition is approved by the NDA. The full proposal will confirm the suitability and modalities for this independent assessment of grant proposals. SPC (with participation of the NDA in the technical evaluation) selects through international call for tenders a consortium of empowerment contractors, made of local experts (mandatory) as well as international ones if there is a lack of available expertise locally.
Step 2: building capacity of LAs for priority adaptation project development capacity SPC mandates empowerment contractors in FSM to deliver at least four State-wide resilience trainings (one per State) and project development workshop for LAs. The NDA and States inform all LAs of the trainings & workshops opportunity. Travel arrangements, accommodation and per-diem to be provided to each participating LAs (up to three participants per LA) by the empowerment contractors. Empowerment contractors run the resilience trainings and project development workshops. Participating LAs are informed about upcoming calls for proposals. Selection criteria are presented and discussed. LAs are encouraged to draft a priority adaptation project proposal during the final day(s) of the workshop. After the workshop, LAs may request additional support (through the States, NDA and SPC/the facility) from the empowerment contractors to assist them further developing their draft proposal.
Step 3: calls for proposals and priority adaptation projects selection SPC releases calls for proposals, solely opened to local authorities13, which can submit a project on their own or in association. Several modalities regarding calls for proposals could be considered based on timeline and the overall programme implementation stages (e.g. at least one small grants call per year, open for four months). Specific guidelines and criteria for eligible activities will be provided in the calls for proposals. Such criteria will also aim at
13 Local authorities are the main focus of this EDA programme given that community-based organizations are already targeted by existing Small-Grants programmes in FSM.
PROJECT / PROGRAMME CONCEPT NOTE Template V.2.2 GREEN CLIMATE FUND | PAGE 8 OF 4 ensuring sub-projects will fall within ESS category C or B, for instance types of building retrofitting, design of water infrastructure (e.g. size of rainwater collection tanks), types of materials for road or seawall construction (e.g. no corals, maximum area covered) etc. A template for calls for proposals will be provided in the full funding proposal. Following consultations with communities, LAs with demonstrated capacity (to develop fundable projects, to implement such projects, to report as required and account for funds disbursed) apply directly. While this is the preferred modality, most LAs may lack this requisite capacity (to be confirmed as part of the feasibility study). In that case, LAs could designate support organizations (State agencies, locally-registered CSOs or SPC; to be confirmed as part of the feasibility study) in their grant project proposals, which will implement, monitor and report on grant projects in partnership with them. In order to ensure full ownership by the LAs, support organizations will need to fulfil pre- established conditions (e.g. locally-registered support organizations, formal endorsement from both the NDA and the LA, overhead costs of the supporting organization limited to 25% of the total proposal’s budget) and their exact role shall be detailed in the grant project proposal. LAs submit project proposals to the EDA programme coordination unit at SPC. The GCF focal point at the State level have to be consulted to ensure that the proposal presented by the municipality is in line with the State policies, strategies and priorities. The EDA coordination unit conducts pre-screening and asks for incomplete proposals revision and re-submission. Once the call is closed, the EDA coordination unit review the proposals according to pre-established criteria (Review stage 1), in line with SPC procurement policies. The EDA coordination unit either decline, approve or send back the proposals for improvements. In the latter case, empowerment contractors are available to support LAs in reviewing and consolidating proposals (priority will be given to LAs without a support organization). The EDA coordination unit then requests approved project proposals assessment from the independent assessment panel (Review stage 2). The independent assessment panel requests modifications (empowerment contractors available to support LAs in reviewing and consolidating proposals in that case) and/or approve finalized project proposals. The EDA coordination unit finally submit reviewed and approved proposals to the national decision-making body for approval (Review stage 3).
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Step 4: implementation of priority adaptation projects and further empowerment activities SPC then sign a grant agreement with the LAs for the implementation of selected projects (including management and reporting), with locally-based project team. If a support organization has been designated by a LA in a selected grant project proposal, SPC then contract directly this organization to support the implementation of the project in full collaboration with the LA as set out in the proposal. LAs (with or without local support organizations) implement the projects. Upon demand, SPC provides assistance to the partner LAs through the empowerment contractors as a support mechanism for sustainability: organisational audit, mentoring, coaching and potential reorganisation, vulnerability and resilience assessment, DRR plan development, financial mechanisms.
EDA Grant Investment Criteria In line with the GCF investment criteria, EDA grants will only be awarded to projects that meet the following criteria, which will be further developed in the call for proposal as well as listed and explained in the calls for proposals: • Climate change adaptation impact potential o Direct and indirect beneficiaries whose vulnerability is reduced or resilience is increased (with detailed information on locations & exposure, gender, social conditions etc.) o Inclusion of most vulnerable populations (e.g. at risk of being displaced, women, those at the extremes of age, those with pre-existing health problems, the poor and socially disadvantaged, outer islands communities, etc.) o Climate change resilient jobs/livelihoods created o Dependency on livelihoods vulnerable to climate change reduced o Increase in generation and use of climate information in local decision-making • Transformational/paradigm shift o Degree to which the proposed project addresses prevailing unsustainable practices/situations towards a resilient development pathway o Degree to which the project is innovative/business unusual o Potential for scaling up and replication elsewhere if the project proves successful o Potential for knowledge and learning o Sustainability of outcomes and results beyond completion of the intervention (projects will need to include an exit strategy and demonstrate commitments towards long-term sustainability through the use of specific tools such as, for instance, operation & maintenance plans) • Sustainable development o Environmental Co-Benefits (not directly climate-related), such as biodiversity, soil quality, air quality etc. o Social Co-Benefits such as health and safety, access to education, cultural preservation etc. o Economic Co-Benefits such as expanded and enhanced job markets, job creation and poverty alleviation, improved sector income-generating capacity, increase in agricultural productivity etc. o Gender-Sensitive Development: degree to which the project addresses prevailing gender inequalities in general and with regards to climate change vulnerability and risks in particular • Needs from local communities o Degree to which the proposals account for local communities’ needs. o Direct community involvement in the project implementation • Alignment with national or sub-national priorities o Degree to which the project clearly aligns with national or subnational priorities (e.g. contributing to objectives of national climate change policies, action plans implementation of JSAPs or local DRR plans) • Efficiency and effectiveness o Cost-effectiveness and efficiency o Co-financing o Financial viability
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o Application of best practices Environmental and social safeguard assessment All proposals will include an environmental and social safeguard screening to avoid, minimize and mitigate any harm to people and ecosystems and to incorporate environmental and social concerns as an intrinsic part of project cycle management. The programme will only approve proposals that are categorized as low or medium risks in line with SPC’s Social and Environmental Responsibility policy and the GCF’s environmental and social safeguards (category C or B). For medium risk projects (category B), local authorities will be required to develop an environment and social impact assessment and action plan. Specific guidelines regarding environmental and social safeguard will be provided in the calls for proposals. Redress Mechanism SPC has a Grievance and Redress Mechanism in place to ensure that complaints are being promptly reviewed and addressed by the responsible units (see https://www.spc.int/accountability). SPC is committed to receiving any concerns or grievances from an affected community, about the environmental and social plans or performance of any SPC project, including this EDA proposal. Please provide a brief overview of the key financial and operational risks and any mitigation measures identified at this stage. Operating projects and large programmes in FSM can be challenging due to limited human resources in national and subnational governments. A potential risk is the difficulty to liaise with local authorities to determine relevant requests for support. By providing ad-hoc resources to the NDA and States through the grant agreement, and by providing technical assistance from the empowerment contractors, this risk is minimized. The programme will involve grants from SPC to the NDA. SPC has a long history of providing grants to partner countries and has well-established procedures for managing and monitoring such grants to reduce any associated financial risks. The programme will target all LAs in FSM so as to maximize impacts and paradigm shift. A potential risk is having too few or too many interested LAs that participate in the capacity-building activities and submit priority adaptation projects proposals. The risk will be addressed during the design of the full programme proposal through discussions with the States and the NDA. There are some additional minor risks that could influence the success of this EDA pilot. For example instability in the NDA office and targeted local authorities, such as conflict or a change of leadership could lead to delays and/or reluctance to engage with the project. However, this can be mitigated by maintaining strong relationships and good communications with the NDA office, States’ and local authority’s focal points staff so that the engagement approach can be adapted. Besides, cyclones or other natural hazards may prevent local authorities from engaging in project activities while they recover and rebuild. These risks cannot be eliminated, so project staff will need to be flexible around changing plans in the event of a natural disaster. A thorough assessment of risks will be carried out during the design of the full programme.
B.3. Expected project results aligned with the GCF investment criteria (max. 3 pages) Provide an estimate of the expected impacts aligned with the GCF investment criteria: impact potential, paradigm shift, sustainable development, needs of recipients, country ownership, and efficiency and effectiveness. Impact Potential: The EDA programme contributes to increasing the resilience of vulnerable people and communities, infrastructure and built environment as well as ecosystems at local authority levels. It does so by empowering municipalities in FSM to foster climate change adaptation at their operating scale, and by addressing top-priority vulnerabilities through local projects implementation. The capacities of local authorities to cope with climate-induced disasters, health, food and water security issues are improved through component 1 (local authorities are empowered on climate change and resilience, better informed on vulnerability issues and organized to deal with them), while their needs to address targeted drivers of vulnerabilities through one-off priority projects are answered through component 2. Both components target all 76 municipalities of FSM, which encompass the entire FSM population. Preliminary consultations suggest that around 15% of municipalities may lack the basic capacity or formal legal registration to actually benefit from component 1 (and thereby component 2), and that only two-third may actually be able to implement priority adaptation projects as part of component 2. As a result, 65 municipalities would be direct beneficiaries of component 1, while around 50 would be direct beneficiaries of component 2. These 50 municipalities correspond to the most populated ones with a total of around 95,000 inhabitants and a resident population ranging from around 400 inhabitants to around 14,000 inhabitants for each municipality, according to the 2010 census (FSM
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Statistics Division). Around 70,00014 inhabitants (that is around 71% of FSM population), including 50% of women, would then be benefiting from priority projects implemented as part of component 2. A more precise estimated adaptation impact (number of direct beneficiaries and % of population) will be determined when developing the full proposal based on assessments conducted as part of the feasibility study.
Paradigm shift: By addressing the main barriers that hamper local authorities’ action in FSM (lack of capacity and financial resources for climate change adaptation) and mainstreaming climate change considerations into policies and planning at a local level (municipalities will access ad-hoc support towards climate change adaptation planning, for instance through development of municipal climate change and disaster risk management zoning regulations), the EDA programme goes beyond one-off project investments and creates an enabling environment for local authorities and sustained climate action. Targeting all local authorities, with full support and facilitation from the States and the NDA, also generates a high potential for knowledge sharing, scaling-up and replication not only in FSM but also across the Micronesian region and beyond. Some activities in component 1 will foster a network of development partners and implement knowledge sharing mechanisms to support an effective community of practice across municipalities in FSM but also across the Micronesian region. This will allow to disseminate outcomes and lessons learned from activities in components 1 and 2. In its first phase, the programme will target most local authorities in FSM. Activities realized in component 1 and projects implemented in component 2 (the programme will only fund projects that meet a paradigm shift/transformational criteria), including innovations, could easily be scaled-up to local authorities in other Micronesian countries (Republic of Marshall Islands and Palau), and replicated in other Pacific island countries using the capacity of SPC to disseminate outcomes and lessons-learnt across its member countries and development partners. If successful, the operating capacity of the EDA facility could be expanded in a second phase in which the number of countries and local authorities could be multiplied.
Sustainable development: The EDA programme contributes to all three sustainable development pillars, and numerous environmental, social and health, and economic co-benefits are expected. The programme also aims to reduce gender inequalities in climate change impacts. These co-benefits and wider positive impacts are assessed and monitored for any project implemented in component 2 through specific sustainable development indicators (e.g. change in local authorities’ budget deficit, improved health and safety, improved biodiversity, increased number of women in leadership position).
Needs of recipients: The EDA programme addresses climate change adaptation needs from local authorities, by providing technical assistance and additional funding resources. Component 1 aims at better identifying the scale and intensity of vulnerability to climate change at the local authority’s level (e.g. by a clear description of the scale and intensity of exposure to climate risks), and at strengthening their organisational and implementation capacity. Component 2 then addresses priority economic, environmental and social development issues pre-identified as the main sources of vulnerabilities.
Country ownership: The EDA programme has been co-developed by SPC and the NDA, with strong support and inputs from other FSM stakeholders, incl. all four States and civil society organizations. The planned activities fully align with national climate change adaptation policies, strategies and priorities (such as JSAPs or the GCF country programme, as explained in section B1). The NDA, which will also be the official focal point, and the four States will be fully involved and play a key strategic role in the programme implementation. Resources will be provided to the NDA and States to guarantee ownership by developing key strategic partnerships between SPC, the NDA and local authorities. A national decision-making body made up of representatives from key stakeholders will endorse key milestones, including selection of projects as part component 2 (see section B2 for implementation arrangements).
Efficiency and effectiveness: The EDA programme will demonstrate a strong cost effectiveness and financial soundness. The proposed financial structure of the facility is deemed adequate and reasonable in order to achieve the project’s objectives while minimizing transaction costs, in particular given the high complexity of targeting all municipalities in each of the State to include particularly vulnerable populations living in rural areas and outer-islands. Indeed, the long distances, at times unfavourable weather, logistics and high-cost challenges in inter-island transportation in FSM make it particularly difficult to deliver assistance. The programme will be funded mainly through a 15 million grant from the GCF, with additional co-financing (incl. from other donors and in-kind contributions from the national, State, and local governments) that will be confirmed at the full proposal stage. A detailed economic and financial analysis will be conducted as part of the feasibility study while developing the full proposal.
B.4. Engagement among the NDA, AE, and/or other relevant stakeholders in the country (max ½ page)
14 Assuming that 100% of the population would be benefitting from projects implemented in municipalities with less than 1000 inhabitants, while two-third of the population would be benefiting from projects implemented in municipalities with more than 1000 inhabitants.
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Please describe how engagement among the NDA, AE and/or other relevant stakeholders in the country has taken place and what further engagement will be undertaken as the concept is developed into a funding proposal. The concept note has been co-developed by the NDA and SPC as the Accredited Entity, and shared and discussed with stakeholders from the FSM government, States governments, CSOs and municipalities during in-country consultations mid-October 2019, including a one-day national workshop gathering around 30 participants (see annex 1). These initial consultations confirmed a strong interest, provided positive feedback, and demonstrated a high level of engagement and support. Further in-depth discussions and consultations with all relevant stakeholders will be taking place when developing the full proposal.
C. Indicative Financing/Cost Information (max. 3 pages) C.1. Financing by components (max ½ page) Please provide an estimate of the total cost per component/output and disaggregate by source of financing. Component/Output Indicative cost GCF financing Co-financing (USD) Amount Financial Amount Financial Name of (USD) Instrument (USD) Instrument Institutions Component 1: 5,450,000 4,950,000 Grant 1,500,000 In-kind National and Empowerment (To be contributions States activities confirmed) and grants governments + other donors Component 2: Direct 9,500,000 9,000,000 Grant 500,000 In-kind National and grants for priority (To be contributions States adaptation projects confirmed) and grants governments + other donors Programme 1,050,000 1,050,000 Grant Management Costs Indicative total cost 17,000,000 15,000,000 (USD)
C.2. Justification of GCF funding request (max. 1 page) Explain why the Project/ Programme requires GCF funding, i.e. explaining why this is not financed by the public and/ or private sector(s) of the country. FSM contributes <0.01% of global GHG emissions each year and is recognised as being at the forefront of the impacts of climate change. GCF funding is essential to enable FSM communities and governments to adapt to these changing circumstances. Local authorities in FSM are in a unique position to identify the climate change adaptation responses that best meet local needs, and have the mandate to undertake the small- to medium-sized adaptation investments required for building climate resilience. Yet they lack the resources to do so. Neither public nor private sectors in FSM are able to cover LAs needs for a resilient development. Describe alternative funding options for the same activities being proposed in the Concept Note, including an analysis of the barriers for the potential beneficiaries to access to finance and the constraints of public and private sources of funding. There are no alternative funding options for the same activities being proposed in the Concept Note considering the very pilot nature of the GCF-EDA scheme. Justify the rationale and level of concessionality of the GCF financial instrument(s) as well as how this will be passed on to the end-users and beneficiaries. Justify why this is the minimum required to make the investment viable and most efficient considering the incremental cost or risk premium of the Project/ Programme (refer to Decisions B.12/17; B.10/03; and B.09/04 for more details). The justification for grants and reimbursable grants is mandatory. Grant financing is justified for this programme because of the extreme vulnerability to climate change of FSM and the lack of resources from local authorities to deal with them. Other justifications include a high level of poverty15 and a significant external debt16. The programme will be developed in a way that builds on other initiatives to support local
15 The level of extreme poverty is higher than average for the Pacific region. According to the latest Household Income and Expenditure Survey (HIES), conducted in 2013—2014, the incidence of poverty was estimated at 39.5% and 16% using the lower middle income class and the 2011 per person per day USD 1.90 international poverty lines, respectively. 16 The 2017 Debt Sustainability Analysis (DSA) from IMF assesses that FSM remains at high risk of debt distress.
PROJECT / PROGRAMME CONCEPT NOTE Template V.2.2 GREEN CLIMATE FUND | PAGE 13 OF 4 climate change adaptation action, and will empower LAs towards a more resilient development. Grant finance allows both the targeted communities and the LAs to gain resilience without incurring more national debt. The proposed financial structure of the programme is deemed adequate and reasonable to achieve the proposal’s objectives and make the proposal viable.
C.3. Sustainability and replicability of the project (exit strategy) (max. 1 page) Please explain how the project/programme sustainability will be ensured in the long run and how this will be monitored, after the project/programme is implemented with support from the GCF and other sources. The exit strategy of the programme is articulated around the following point: Local ownership and empowerment This programme will be enabled LAs to directly access climate finance. The grant facility will be fully aligned with the GCF’s objectives and investment criteria while allowing for maximum consistency with national and local priorities. In contrast to a pre-determined top-down funding approach, the proposed approach of self-determined local adaptation is expected to: (i) respond directly to local needs, vulnerabilities and opportunities; (ii) empower LAs towards sustained climate change action; and thus (iii) be sustainable beyond the period of direct financial support. Support mechanisms for sustainability are included in component 1 (as part of ad-hoc support to municipalities with projects selected in component 2 – see section B2). These mechanisms include, inter alia, development of vulnerability assessment, planning document and zoning in line with State and national policies and strategies, and financial mechanisms (e.g. local trust funds). Training municipalities to identify and incorporate climate adaptation in their planning and priorities, develop projects, receive grants but also look for other sources of climate funding will also be part of capacity building in component 1 and contribute to the sustainability of the EDA. Upon completion of the EDA programme, the role of municipalities in JSAP will be better and more effectively identified, and the municipalities’ development plans, when available, will include climate adaptation, both of these factors enhancing long term sustainability. Sustainability of priority adaptation projects The “transformational/paradigm shift” grant project selection criteria include “sustainability of outcomes and results beyond completion of the intervention” (see section B2 - EDA Grant Investment Criteria). To do so, projects will need to include an exit strategy and demonstrate the use of specific tools for sustainability such as operation & maintenance plans. Grants awarded towards priority adaptation projects shall include a proper exit strategy. Some priority adaptation projects could also entail self-sustaining elements (e.g. secured future sources of funding). Pilot nature of the programme The proposed EDA programme constitutes a first-of-its-kind, not only in FSM, but also internationally (with the exception of the UNCDF LoCAL programme). The proposed programme therefore constitutes a pilot which has a huge potential for learning. Lessons will be learned for the design of a full-scale EDA programme with stronger elements of self- sustainability, or other programmes targeting LAs. Thorough monitoring, evaluation & learning of the programme impact and sustainability will be key in order to maximize the value of the proposed project beyond its lifetime. Before completion of the programme and if the facility proved successful, both the FSM government and SPC will seek to mobilize additional funds (from multilateral and bilateral donors) for the facility to continue its activities in FSM and possibly be expanded to target other countries’ local authorities as well in the Micronesian region (both the Republic of Marshall islands and Palau have expressed their interest for such a facility if successful in FSM).
D. Supporting documents submitted (OPTIONAL) ☒ Map indicating the location of the project/programme (See FSM map attached) ☒ Diagram of the theory of change (annex 2) ☐ Economic and financial model with key assumptions and potential stressed scenarios ☐ Pre-feasibility study ☐ Evaluation report of previous project ☐ Results of environmental and social risk screening
Self-awareness check boxes
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Are you aware that the full Funding Proposal and Annexes will require these documents? Yes ☒ No ☐
• Feasibility Study • Environmental and social impact assessment or environmental and social management framework • Stakeholder consultations at national and project level implementation including with indigenous people if relevant • Gender assessment and action plan • Operations and maintenance plan if relevant • Loan or grant operation manual as appropriate • Co-financing commitment letters
Are you aware that a funding proposal from an accredited entity without a signed AMA will be reviewed but not sent to the Board for consideration? Yes ☒ No ☐