Building local capacities for access to climate finance

There is an urgent need for better delivery mechanisms and institutions that can channel climate finance to local actors, as they are the ones who can deliver more targeted, context-relevant and appropriate climate adaptation outcomes. How can local institutions channel finance for more effective climate action? A briefing paper by IIED, IUCN NL and WWF NL presents the conclusions of joint efforts in the programme Shared Resources, Joint Solutions.

Header photo: Reforestation by ECOTRUST in Uganda © Henk Simons

Solving the climate crisis is urgent, but the availability of climate finance for local adaptation and mitigation solutions is scarce. According to a study by IIED, only 10% of international climate finance is reaching the local level, and only 18% is dedicated to the least developed countries.

The shake-up of priorities brought by COVID-19 creates an opportunity to reorientate development finance flows towards a more localised approach. IIED, IUCN NL and WWF NL have therefore worked with local institutions through the pandemic, using the IIED ‘Money where it matters’ framework to support their capabilities to mobilise and manage increased volumes of climate finance.

Examining emerging evidence from this work and broader evidence from IIED research, this briefing sets out why donors and development actors should support local actors and how local institutions can develop joined-up, equitable and locally appropriate responses to the challenges they face.

‘Local institutions are often most directly in touch with communities who are feeling the negative effects of climate change the most,’ says Maxime Eiselin, Expert Green Economy at IUCN NL. ‘Therefore, they are often best suited to support tailored and appropriate solutions. Yet, the large international climate finance streams, investors and political talks are often too far away, are unknown or unclear to local organisations.’

Missing middle

The paper concludes there is a missing middle in climate finance provision. ‘Local institutions either do not yet exist or lack the capacities to attract and distribute climate finance,’ Eiselin explains.

Scale-up locally-owned solutions

Using IIED’s ‘Money where it matters’ framework, our local partners ECOTRUST in Uganda and ADEL Sofala in Mozambique have gained the hammer and the nails to scale-up their locally-owned nature-based climate solutions. ‘They have gained capacities to access climate finance by building a track record of their results, writing an impact narrative for donors, and getting transparency in the important actors that channel the finance,’ Eiselin explains.

Changing the risk perception

Pauline Nantongo, CEO of ECOTRUST Uganda states: ‘Channeling climate finance to local institutions like ECOTRUST Uganda is by no means an investment risk. The real risk is that money stays in the multiple layers of international intermediation and does not reach the local levels. The ‘Money where it matters’ framework can be used to change the risk perception of climate finance donors. It helps in communicating for local organisations such as ECOTRUST that have a track record of forest protection, linked to climate change mitigation and adaptation.’

More information

To help civil society organisations who work at local level with the ‘Money where it matters’ framework, IIED, IUCN NL and WWF NL hosted a learning webinar in May 2020 for civil society and community-based organisations involved in the SRJS programme. More than 60 people joined these webinars, hosted in different time zones and languages. Watch the webinar below. 

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