The UNCDF LoCAL initiative for Cambodia, also called Local Governments and Climate Change Project (LGCC) demonstrates the role of local governments in fostering climate change resilience and identifies practical ways to mainstream climate change resilience into subnational planning and finance systems.

Cambodia is ranked one of the most climate-vulnerable countries in the world. The latest National Strategic Development Plan streamlines sectoral climate change strategies and action plans to guide the country’s climate change response over the next decade, including at the local level.

Over 2014-2018, the government benefitted from USD 1,901,330 of grant support in the form of Performance-based Climate Resilience Grants (PBCRGs) and operational grants from Swedish International Development Cooperation Agency (SIDA) and EU Global Climate Change Action (GCCA), co- financing USD 100,000. Overall, USD 2,725,490 over the 4 years was provided.

276 adaptation measures across 8 districts have been financed through PBCRGs. Of this total, 229 projects were small-scale infrastructure projects mainly entailing construction of elevated roads/bridges and renovation/construction of rural/farm roads; restoration/protection of irrigation canals; and rehabilitation/construction of water gates, sewage systems and community ponds. Several capacity-building and awareness-raising activities were supported as well.

Through this experience, Cambodia successfully built institutional capacities for a full roll-out of the LoCAL mechanism, for subnational climate change adaptation finance. The system has started attracting other sources of finance. In 2019, 34 districts will receive PBCRG support with funding from International Fund for Agricultural Development (IFAD), with another 10 districts to be supported by UNDP/GEF.

The long-term path to scaling up and institutionalizing the PBCRGs system also involves financing from the Green Climate Fund (GCF) and other sources. To this end, in 2015, the Ministry of Environment, as national designated agency for the GCF, nominated the National Committee for Subnational Democratic Development Secretariat (NCDD-S) as a national implementing entity to be accredited to GCF and benefit from the GCF’s Enhanced Direct Access modality.

WHAT IS “DIRECT ACCESS” FOR NATIONAL ENTITIES ? One of the key components of the design of the GCF is that it allows for “Direct Access”. Amongst climate funds, direct access has only been included in the design of the Adaptation Fund and, to a lesser extent, the Global Environment Facility (GEF). Other climate funds provide exclusively for “international access”, which allows for the provisions of funds to a recipient country via international entities. Direct access allows for fund transfer directly to recipient countries via sub-national, national or regional Accredited Entities (AEs). One of the goals of incorporating direct access into the design of the GCF is to increase country ownership. The accreditation of national entity is therefore an essential component for the success of the GCF direct access design component. GCF Readiness Programme

With EU support, UNCDF has been supporting the NCDD-S throughout the GCF accreditation process. NCDD-S has now reached Stage II of GCF accreditation.

As the NCDD-S finales the accreditation process, Cambodia is focusing on meeting the targets set to prepare systems and capacity for scale-up with GCF support. This work includes

1. more formally integrating the PBCRG into the budget and financial management framework of the subnational administrations; and
2. improving the efficiency of implementation so that the task of administering a large number of grants does not become overwhelming for the NCDD-S.

Obtaining accreditation will be a major achievement as it will make climate change adaptation finance accessible to the most vulnerable local administrations and communities nationwide. Up to 60 districts may receive GCF funded PBCRGs. In combination with other funding sources, this would allow full scale-up of climate adaptation finance.