Climate Adaptation and Finance in Rural India (CAFRI)

Project description

Title: Climate Adaptation and Finance in Rural India (CAFRI)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: India
Lead executing agency: Ministry of Environment, Forest and Climate Change (MoEFCC), Government of India and National Bank for Agriculture and Rural Development (NABARD)
Overall term: 2020 to 2023

Context

Nationally determined contributions (NDCs) are at the heart of the Paris Agreement and the achievement of long-term climate goals. NDCs embody efforts by each country to reduce national emissions and adapt to the impacts of climate change. India’s NDCs emphasise the need to “better adapt to climate change by enhancing investments in development programmes in sectors vulnerable to climate change, in particular agriculture, water resources, the Himalayan region, coastal regions, health and disaster management”. The National Action Plan on Climate Change (NAPCC) and the State Action Plan on Climate Change (SAPCC) provide guidance on the long term strategy to address climate change at national and state levels under the country’s NDC commitments. However, with limited funding support, implementation of the SAPCC and NAPCC has been a challenge. It is therefore crucial to reorient development schemes within the climate adaptation and risk framework. The existing financial adaptation concepts lack planning and technical capacities for effective implementation of climate adaptation in priority sectors of NDCs in rural areas of India.

Objective

The implementation of the Indian nationally determined contribution (NDC) on climate adaptation is improved with regard to need- and evidence-based planning of adaptation initiatives and climate-sensitive design of financial instruments.

Approach

CAFRI aims to support the Ministry of Environment, Forests and Climate Change (MoEFCC) and the National Bank for Agriculture and Rural Development (NABARD) for reducing climate change risks of vulnerable population groups and sectors. It also aims to develop the capacity of different actors in the planning, implementation and financing of climate adaptation initiatives at the state level (Himachal Pradesh and Uttar Pradesh).

The key areas for the project support comprise:

• Gender-responsive participatory adaptation planning and implementation on a local level
• Impact assessment and monitoring of adaptation related initiatives
• Innovative funding sources for adaptation 
• Collaboration and coordination at national and subnational levels while implementing the NAPCC and SAPCC

The key outputs: 

Output 1 aims to improve the planning and impact monitoring of adaptation-relevant measures. The project would develop appropriate participation formats and procedures with the national and federal authorities to ensure that local needs are incorporated into the development of adaptation projects.

Output 2 focusses on the increased use of existing development programmes and innovative new sources of finance to fund gender-sensitive measures that are relevant to climate adaptation. NABARD will receive methodological and process-related advice from the project. These inputs from the project will aid in the development of a climate risk assessment instrument. Together with NABARD and the private sector, the project will also further develop ideas on how private sector resources can be systematically mobilised to finance adaptation to climate change.

Output 3 aims at improving coordination and cooperation between the various actors in the field of adaptation, in particular at state level. National partners are the Ministry of Environment, Forests and Climate Change and the National Bank for Agriculture and Rural Development (NABARD).