Supporting SMEs in adapting to climate change

Project description

Title: Global Programme: Private Sector Adaptation to Climate Change
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Bangladesh
Lead executing agency: Economic Relations Division (ERD), Ministry of Finance
Overall term: 2014 to 2017

Context

The impacts of climate change present a significant challenge to the private sector, especially to small and medium-sized enterprises (SMEs), which are often seen as the drivers of economic growth in Bangladesh. If their viability is threatened by climate variability and extreme weather events, the entire economy will thus suffer. The possible consequences of climate change therefore include job losses and declining economic growth. Its impacts on businesses can be direct, such as damage to buildings and locations, or the disruption of production processes if, for instance, machines overheat or staff fall sick more often.

But the impacts can also be indirect, with the increasing scarcity – and rising prices – of resources such as water and energy, the disruption of supply chains and changes in demand for produced goods. At the same time, the need to adapt to climate change may create a new demand for products and services, and prompt new business opportunities. Examples in the case of the textile industry might include technologies for energy efficiency and building insulation, or the provision of consulting services.

Objective

New approaches and instruments have been developed and tested to strengthen the capacities of the private sector to adapt to climate change.

Approach

As part of the Global Programme, which also includes measures in Rwanda, Morocco and Central America, GIZ is working in Bangladesh to assist local SMEs in assessing their climate-related risks and opportunities more effectively, and in developing appropriate adaptation strategies. It is implementing the programme on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), and it focuses on four areas of activity:

• Raising awareness about the impacts of climate change
• Developing advisory services and tools for design adaptation strategies
• Providing advisory services on the financing of adaptation measures
• Sharing strategies and tools with other German and international development cooperation organisations

The programme is carrying out pilot activities in Khulna, where it is also developing capacity building tools specifically suited to the situation of locally based SMEs.