1. Trialling Demand-led Climate Finance
in Ethiopia: Is DFID onto a Winner?
Climate Change and Food Security Marketplace,
University of Cambridge, 13 June 2014
Jules Siedenburg, Freelance Consultant

2. CLIMATE FINANCE: SUPPORT NEEDED
 Climate change poses a huge threat to developing
countries, esp poor and vulnerable communities.
 Outside support is desperately needed.
 Climate finance initiatives respond to this need by
providing funding for ‘climate smart’ initiatives

3. TRANSFORMATIVE POTENTIAL
 Potentially, such support can create transformative
opportunities for poor countries and communities
 Helping vulnerable groups capture technological
and managerial innovations that deliver livelihood
advances that are climate resilient and sustainable

4. LANDSCAPE PROBLEMATIC
 Yet this landscape remains problematic...
 Schemes employ strict mechanisms to ensure
rigour and accountability of their finances
 National stakeholders often possess limited
capacity, despite their dynamism and potential.
 End result is a dilemma: Finance is often inaccessible
to those who most need it & could make best use of it.

5. DILEMMA WIDELY RECOGNISED
 Dilemma is widely recognised, and potential
solutions are being explored
 These have merit, and could prove fruitful in time.
 Yet currently the difficulties faced by stakeholders
from developing countries remain

6. POTENTIAL SOLUTIONS TO THIS PROBLEM
Potential solutions Rationale Problems
Streamlining access
modalities
Makes existing funds
more accessible to
applicants from
developing countries
Modalities remain
complex, and access
remains elusive for
national stakeholders
Establishing national
climate funds
Provides a vehicle for
enhanced access that
responds to national
needs and priorities
Difficult to set up, donors
reluctant to channel funds
via NCFs, may deprioritise
initiatives by non-state
actors
Securing direct access to
funds
Provides a vehicle for
enhanced access that
responds to national
needs and priorities
Generally involves
securing access via a
country-based multi-
lateral donor office, so
access remains difficult
Table 3: Potential solutions to difficulties accessing funds

7. SCIP OFFERS POTENTIAL SOLUTION
 The Strategic Climate Institutions Programme Fund
(SCIP) offers a potential solution to dilemma
 1. Take seriously the needs and concerns voiced by
diverse national stakeholders re this challenge
 2. Address barriers and thus enable these stakeholders
to take full part in their country’s CC response efforts
 Premise that these stakeholders are key clients, since it
is their actions that will ultimately determine whether or
not LDCs respond effectively to climate change.

8. MID-TERM REVIEW FINDINGS
 Began with initial diagnosis of the needs and
concerns voiced by diverse national stakeholders.
 Mid-term review:
 Overwhelmingly positive about basic design, but
saw implementation challenges
 Had captured imaginations, and was seen as
suited to addressing critical gaps in the
institutional landscape

9. COMMENTS FELL INTO 3 CATEGORIES
 Categories corresponded to SCIP’s three key
innovations:
 empowering stakeholders
 fostering partnerships
 bolstering government
 For each innovation, the gist of these comments is
summarised then sample quotations are cited.

10. FIGURE 1: SCIP’S THREE INNOVATIONS
Table 3: Potential solutions to difficulties accessing funds
(a) Empowering stakeholders (b) Fostering partnerships (c) Bolstering government
One precondition IIInnnttteeerrraaaccctttiiivvveee ttteeeccchhhnnniiicccaaalll aaassssssiiissstttaaannnccceee
EFFECTIVE CLIMATE CHANGE RESPONSEACTIONS

11. INNOVATION 1: EMPOWERING NATIONAL
STAKEHOLDERS
 Virtually all raised concerns about the limited
capacity of national stakeholders
 Stressed the need for opportunities to ‘learn by
doing’ via financial support coupled with TA.
 TA critical to ensure access & effective use.
 A key benefit would be to empower and mobilise
diverse national actors, thus expanding the range
of voices and engaged stakeholders

12. INNOVATION 1: EMPOWERING NATIONAL
STAKEHOLDERS
Examples include...
 “The capacity of key Ethiopian institutions is still low, and
without this CRGE (i.e., Ethiopia’s climate change response)
won’t work. One critical gap that must be addressed is the
ability to produce strong proposals.”
 “We spend lots of time preparing proposals but few are
successful, which is extremely frustrating. If those writing
proposals are unsuccessful they become discouraged, but
we need to ‘activate’ as many of these people as possible to
help deliver CRGE, including at lower administrative levels.
Of course, the issue is not just preparing proposals, but also
implementing them. At present, access to technical support
in both these areas is a critical gap.”

13. INNOVATION 2: FOSTERING
PARTNERSHIPS BETWEEN INSTITUTIONS
 Most strongly supported SCIP’s emphasis on fostering
collaborative partnerships between institutions.
 Two types of partnerships
 Between national institutions
 Seen as a way to break down historic barriers between
institutions and to harness potential synergies.
 Between national & overseas institutions.
 Desirable, provided that they build the capacity of their
national partners.

14. INNOVATION 2: FOSTERING
PARTNERSHIPS BETWEEN INSTITUTIONS
Examples include:
 “While the government leads in providing services
and managing resources, CSOs can help. Suitable
roles for CSOs include engaging with communities
and translating insights and lessons learned into
policy.”
 “It is fine to leave SCIP open to overseas bidders
as long as their bids include an Ethiopian partner
institution, in order to ensure that Ethiopian
capacity is developed.”

15. INNOVATION 3: BOLSTERING
GOVERNMENT
 Many saw SCIP as an unambiguous boon for
government
 Helps lay institutional groundwork for climate action.
 Naturally complements planned national climate fund
 “Achieving the CRGE vision will be very difficult,
since the climate change challenge is huge and
complex. Diverse actors are needed to assist
government, and SCIP ensures diverse actors are
capacitated and mobilised.”

16. INNOVATION 3: BOLSTERING
GOVERNMENT
 Others perceived the relationship between SCIP and the
CRGE Facility as more complex.
 Govt suggested be temporary to avoid duplication with government,
 NSAs highlighted the merits of retaining SCIP over the longer-term.
 “The SCIP Fund is an ideal precursor to the new CRGE
Facility, since it generates useful lessons on various levels.
But it must complement government’s initiatives and avoid
becoming a parallel structure.”
 “If climate finance goes exclusively through government
channels, then actors like CSOs, research institutes, the
media may not have access to it, since there is no evidence
of this having happened previously in Ethiopia.”

17. THE SCIP FUND DESIGN
 SCIP is demand-led in two distinct senses
 Distributes grant funding based on soliciting proposals
from across Ethiopian society.
 Provides this support in a way that responds to the needs
and priorities voiced by Ethiopian stakeholders.
 Design includes both responsive and proactive
components

18. THE SCIP FUND DESIGN
Table 3: Potential solutions to difficulties accessing funds
SCIP Fund
 Distributes finance
 Provides technial assistance
GA 3
NGO / CSO
(+ Partner)
Development
agency
(+ Partner)
Private
consultancy
(+ Partner)
Research
institute
(+ Partner)
GA 2 GA 4
Government
agency (GA) 1
GA 5
PROACTIVE SUPPORT
RESPONSIVE SUPPORT
Government
agency
(+ Partner)

19. THE SCIP FUND DESIGN
 SCIP’s focus is its responsive component, which supports proposals
submitted by national applicants or overseas institutions with Ethiopian
partners. This component solicits proposals, then evaluates them
against a set of criteria. Proposals pitch ‘bottom up’ project concepts
borne out of the experience and insights of applicants.
 SCIP also conducts targeted outreach and engagement via its proactive
component. Outreach efforts help partners identify capacity gaps then
develop proposals for submission to SCIP. Such proposals must
undergo the same rigorous and independent evaluation as other
proposals in order to be awarded funding.
 SCIP delivers two services to its clients. It finances selected projects
and provides interactive TA to help qualifying applicants transform
promising proposals into ‘bankable’ ones and to ensure successful
implementation of projects.

20. STAKEHOLDERS’ COMMENTS ABOUT SCIP
Table 3: Potential solutions to difficulties accessing funds
Views of SCIP voiced by
interviewees
Percentage of stakeholders expressing
this view (%)
Addresses key capacity building
needs
56%
Helps mobilise diverse national
actors
33%
Fosters valuable collaborations 56%
Inherently complementary to CRGE 78%
Has good potential, but design
problems remain
56%
Not needed / fundamentally
problematic
0%

21. SUMMARISING D-LED CLIMATE FINANCE
 Supporting national stakeholders to develop
‘bankable’ proposals via interactive TA
 Generates alternative approaches and solutions, since
identifying viable climate resilient livelihood pathways is a
walk into the unknown
 Supports organisations with a long-term commitment to
vulnerable countries & communities
 Harnesses the dynamism, local wisdom and diverse
perspectives already existing in these societies