Adaptation Fund

Organizational profile: The Adaptation Fund was established to finance concrete adaptation projects and programmes in developing countries that are parties to the Kyoto Protocol and are particularly vulnerable to the adverse effects of climate change. Since 2010, the Adaptation Fund has committed US$ 720 million, including supporting 100 concrete adaptation projects with about 8.7 million direct beneficiaries. The Fund is financed in part by government and private donors, and also from a two percent share of proceeds of Certified Emission Reductions (CERs) issued under the Protocol’s Clean Development Mechanism projects. The Adaptation Fund (AF) finances projects that help vulnerable communities in developing countries adapt and build resilience to the effects of climate change while providing an innovative direct access modality that allows accredited national institutions in developing countries to access financing and manage projects directly.

Component one of the Fund’s Readiness Programme for Climate Finance is focused on providing support to accredited implementing entities of the Fund. Under this component, the secretariat will provide support to accredited implementing entities of the Fund. The Adaptation Fund Board (the Board) has made Project Formulation Grants (PFGs) available to accredited national implementing entities (NIEs) of the Adaptation Fund (the Fund) to build the capacity of NIEs in project preparation and design. To compliment the PFGs and support the undertaking of specialist technical assessments during project preparation and design, the Board has also made available Project Formulation Assistance (PFA) grants. Project Scale-Up Grants are funded under the Fund’s Readiness Programme for Climate Finance and activities under ER3 include: Readiness funding to support planning, assessment, capacity enhancement (individual, organization and institutional) for designing and developing scaling up pathways for project scale up; and Public and private partnerships and collaborations to support project development for scale up.

In additional to general project funding and grants to support implementing entities, the Fund's Innovation Facility supports  the development and diffusion of innovative adaptation practices, tools, and technologies. This funding opportunity makes available small-grant projects, using the services of accredited national implementing entities (NIEs).

Financing Instrument: Readiness Grants, Project Finance, Innovation Grants, Direct Access

Project scale: Forest related projects have ranged from approximately US$500,000 to US$$1,900,000.Project Formulation Grants (PFGs) have a maximum of US$30,000 per project. Project Formulation Assistance (PFA) grants have a maximum of US$20,000 per project. Project Scale-up Grants are available up to a maximum of $100,000 per project and programme.  The innovation facility will provide up to US$250,000 to National Implementing Entities (NIE).

Applicable geographical regions/country groups: Global

Eligibility Criteria: Proposals require endorsement by a National Implementing Entity, a Regional Implementing Entity, or a Multilateral Implementing Entity with projects focused on climate adaptation in developing countries particularly vulnerable to the adverse effects of climate change and part of the Kyoto Protocol.

Application guidelines: Project proposals are accepted three times a year: twice before the biannual Adaptation Fund Board meetings and once during an intersessional review cycle. All funding applicants must submit project proposals through a National Implementing Entity, a Regional Implementing Entity, or a Multilateral Implementing Entity. Proposals also require endorsement by the Designated Authorities of the country in which the proposed activities would take place. The proposal should identify an adaptation or resilience challenge that could be addressed with support by the Adaptation Fund through a project or programme. The project or programme would need to be in accordance with priorities laid out in national strategies and plans or in Nationally Determined Contributions.

There are two approval processes under the Adaptation Fund project cycle: (i) a one-step approval process; and (ii) a two-step approval process. All small-size projects/programmes will follow the one-step approval process, while regular projects/programmes may follow either the one-step approval or the two-step approval process, depending on the stage of project/programme preparation, and at the discretion of the project/programme proponent.

This process may be used for small-size projects/programmes or regular projects/programmes with proposals that are already fully prepared. Approval process includes the following steps:

     (a) Eligible Parties submit a fully prepared project/programmes document to the AFBSEC at least nine weeks before the next AFB meeting.

     (b) The AFBSEC will screen all proposals and prepare a Technical Review for each project/programme. The AFBSEC will submit a collection of proposals consisting of technical reviews for all projects/programmes to the Project and Program Review Committee (PPRC) at least seven (7) days prior to the next AFB meeting.

     (c) The PPRC meeting will be held back-to-back to the Adaptation Fund Board (AFB) meeting. The PPRC will review and prepare recommendations for submission to the Board the next day(s).

     (d) AFB approves/does not approve/rejects the recommendations during the meeting.

     (e) All approved projects will be posted on the AF website following the conclusion of its meeting.

The two-step approval process may be used for regular projects;/programmes if it is so decided by the proponent Party: (i) project concept approval; and (ii) fully developed project document approval. Each of these steps is subject to the same approval process as the single approval process, i.e., the project/programme is subjected to the single approval process twice.