Enhancing India’s Readiness to Climate Finance

Enhancing India’s readiness to access and deliver international climate finance
4. Institutional response to climate change – Have effective institutional mechanisms
to respond to climate change been put into place?
1.6
India has launched several plans and policies (emission intensity targets, NAPCC and
SAPCC) to address climate change but they are lacking detail in terms of implementation,
internal procedures, coordination and funding. The majority of plans are not very detailed
or ready for implementation, and do not have clear funding strategies. The key actors involved
in the process are:
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Political Function: Prime Minister’s Council on Climate Change
Strategic Function: Planning Commission and MoEFCC
Financial/ MRV: Climate Change Finance Unit, MoF
Execution/ Implementation: MoEFCC and other line ministries & departments such as
MNRE, MOP, BEE, Financial institutions such as IREDA, NABARD, SIDBI etc.
Clear systems and procedures are in place but the level of engagement and frequency
of meetings have been limited. Even though there is high-level political commitment to the
NAPCC at the PMO-level, the operationalisation of the strategy has been slow and limited.
Climate change programmes are not legally mandated, though they are formally assigned
to key ministries for planning & execution purposes. These programmes are appraised like all
other major Government programmes and funded by budgetary allocations.
5. Institutional capacity to access & coordinate climate finance – Is there strong
institutional experience/knowledge in accessing & delivering international climate
finance?
1.9
There is knowledge within a number of Ministries and agencies (e.g. MoEFCC,
NABARD) on opportunities to access international climate finance through traditional
routes. To date India has accessed more than $550 million in international public climate
finance (see Chapter 3) from multilateral funds – mainly through the CTF and the GEF.
Limited analysis has been undertaken to identify key sectors and activities where
international climate finance would add more value. According to the 12 th Five Year Plan,
all direct climate-related spending should come from international sources; however a
strategic assessment of how this will be achieved has not been undertaken.
Capacity constraints and knowledge gaps still exist for scaling up access and
deployment of international climate finance. Existing government departments (MoEFCC
and DEA) and Development Finance Institutions (SIDBI, IREDA, NABARD) have good
experience in accessing international climate funds and deploying climate finance in key
projects, respectively. However, it is not clear whether existing skills and experience are
transferable to emerging modalities such as the GCF. Capacity gaps that still remain include:
limited sectoral coverage for projects; technical capabilities to design, evaluate, and screen
programmes; limited geographical reach; lack of experience in using innovative financial
instruments; and MRV capabilities.
6. Mainstreaming climate change into national budgets – Is climate change
mainstreamed into the national budget and financial planning cycle?
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There is limited capacity and coordination within ministries to integrate climate plans
with other strategic plans and budgeting cycles. Climate change is not systematically
mainstreamed into national and State budgets, as most development policies/programmes
view climate/environmental outcomes as co-benefits rather than as explicit programme
objectives. With the setting up of the Climate Finance Unit at the MoF, the process is
beginning to be streamlined. However, the CFU needs to be strengthened to be able to
Ref: Ricardo-AEA/R/ED59216/Final Report
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