This October, the Green Climate Fund’s board approved a spending breakthrough, agreeing to send more than $100 million to help Somalia’s farmers – battered by droughts, floods and conflict – to shore up their access to water, restore land and earn a more reliable living from their animals and crops.  

The deal – the fund’s first sizeable help for a single conflict-affected state – is an early example of the kind of investment climate finance experts say needs to be rapidly expanded as many of the world’s most vulnerable countries face the crushing double pressures of conflict and climate impacts.  

At COP28 in Dubai last year, more than 100 countries, banks and other organisations called for “collective action to build climate resilience at the scale and speed required in highly vulnerable countries and communities, particularly those threatened or affected by fragility or conflict”.

On Friday, as the COP29 climate summit in Baku reached its halfway point, a handful of fragile countries – including Somalia, Yemen, Iraq, Chad and Burundi – launched a “Network of Climate-vulnerable Countries Affected by Conflict or High Levels of Humanitarian Needs”, aimed at scaling up the climate finance they say has been lacking. 

“There is a blind spot in climate funding which is preventing the world’s most vulnerable people from receiving the support they desperately need. Our message to all countries is clear: we can no longer afford to ignore this,” said Yemen’s environment minister Tawfiq al-Sharjabi, speaking at a COP event. 

Aid agencies grapple with climate adaptation in fragile states

With climate shocks growing in scale and number, “climate change is a matter of survival for Somalia,” the country’s environment minister Khadija Mohamed Al-Makhzoumi said in October as the new Green Climate Fund (GCF) package was announced. 

But persuading the GCF to take a chance on Somalia took years of diplomatic pressure and wrangling, climate finance analysts say – and rapidly moving the much larger sums of money needed for urgent climate adaptation in fragile nations through a range of finance providers will be a colossal challenge. 

“Somalia is only one country. All that diplomacy and work went for financing $100 million,” said Mauricio Vazquez, who leads work on climate change and conflict at ODI Global, a London-based global affairs think-tank. 

“It’s just not feasible to do that for $35 billion,” he warned, referring to the amount of money the 24 most fragile and conflict-affected countries say they need annually over the next 5-10 years to achieve their national climate adaptation plans. 

As he sees it, the GCF’s Somalia funding “is one in 1,000 they should be doing – so the Somalia success, when you look at it in the big picture, is a demonstration of collective failure.” 

Low appetite for risk 

Countries embroiled in conflicts, or with weak or absent governments, have long struggled to access climate finance, not least because much of it is provided as loans – and loan providers prefer low-risk investments. 

Heavily conflict-affected countries received an average of just $2.74 per capita each year in international adaptation funding in the decade to 2020 – 40% of what other low-income countries got, according to a World Bank report published in July.

Weaker states often also lack the systems, human resources and know-how to effectively apply for funding. As part of its mandate to push half of its adaptation finance to the most vulnerable states, the GCF offers every country at least $4 million in “readiness” funds to help prepare their applications. But an analysis found most fragile and conflict-affected states hadn’t even sought that money. 

“They weren’t accessing investments, or even getting to readiness,” Stephanie Speck, a spokeswoman for the Green Climate Fund (GCF) told Climate Home in an interview. Relying on countries to “come to us” – the normal process – doesn’t work in these cases, she said. 

Adaptation Fund head laments “puzzling” lack of pledges at COP29

Under international pressure to try to move more funding to countries and communities where it is needed most, the GCF – and some other multilateral development banks, including the African Development Bank (AfDB) – are trying to fundamentally rethink how they work with fragile countries. 

They are also looking for new sources of funding – particularly from the long-reluctant private sector – with public climate and development aid unlikely to grow substantially, especially given developments such as the re-election this month of incoming US President Donald Trump, who cut international climate spending during his first term in office. 

“Every actor, including the multilateral development banks, says it’s absolutely vital to bring in the private sector. Otherwise, it’s just a drop in the ocean,” said Yue Cao, an ODI climate finance researcher. 

Much room for improvement 

The AfDB now factors in both fragility and climate change as part of its decision-making on all investments, said Frederik Teufel, the bank’s lead coordinator of efforts to boost its work in fragile contexts. 

To woo more private investors, the bank is moving away from focusing first on the fragility of countries such as Somalia and Chad – a term the countries themselves dislike – to emphasising potential investment opportunities that could aid longer-term development, from expanding access to mini-grid power to building irrigation systems, Teufel said.  

“When you overly focus on the problem, investors say, ‘I can’t invest there,’” he told Climate Home. 

The bank also is shifting from a project-by-project approach in fragile situations to a longer-term investment effort – and its new 2024 strategy sees homegrown African investors as the key. 

“The risk perception from investors is completely different within the continent versus outside the continent,” he said. 

But to attract homegrown – or other – investment, the bank admits in its strategy it will need to help fragile countries develop and put into action stronger financial management systems, aimed at building “transparency, accountability and anti-corruption measures, and sustainable management of debt”. 

The GCF, in turn – which Speck noted was “established to be a high risk taker” – is trying to build more flexibility into its investments to accommodate the often fast-changing situation on the ground in conflict-hit countries. 

“Things sometimes change one day to the next. You think you can work in District A, then a warlord takes over. You don’t want to have to take a year to decide to move to District B,” she said. Being flexible and nimble, she noted, “is new for us”. 

In Somalia, Green Climate Fund tests new approach for left-out communities

Recognising that making applicants wait up to two years for an answer on a funding proposal also didn’t work, especially in fragile settings, the GCF, under its new executive director Mafalda Duarte, has pledged to report back on basic concept proposals within six weeks starting next year, and to provide decisions on full proposals within nine months, Speck said. 

Funders including the GCF and the AfDB say they are also increasingly taking into account that not backing a project in a fragile setting can carry as much or more risk than funding it. 

“People’s careers are based on success – and success is riskier in places that are more difficult,” said Vazquez. Investing in conflict-affected states is also often more expensive than in more stable settings, he said. 

But in places with very low levels of food security or poor health, for instance, the amount of improvement that can potentially be achieved with an investment is huge, he noted, compared to more “minimal” advances in places with less severe problems. 

With climate impacts surging globally, “the adaptation window is closing, and countries affected by conflict and fragility can easily reach their limits, if they’re not already there,” he said. “The question is, who actually pays the cost of doing nothing?” 

Sponsored by SPARC (Supporting Pastoralism and Agriculture in Recurrent and Protracted Crises) through the Climate, Peace and Transboundary Resilience Pavilion at COP29. See our supporters page for what this means. 

Laurie Goering is a freelance writer and editor based in London, UK. 

The Climate, Peace and Transboundary Resilience Pavilion at COP29 will host 30 events with world-leading experts, including heads of state and other leading representatives from governments, climate funds, aid agencies, civil society organisations, and more. All events will be livestreamed. For more information visit the Pavilion page here.

The post Can climate funders overcome fear to tread in conflict zones?  appeared first on Climate Home News.

Can climate funders overcome fear to tread in conflict zones?