Govt to explore more global funds to execute climate projects

The government wants ministries and departments to explore ways to get foreign financing - instead of local funds - to implement climate change (CC)-related projects, as foreign currency reserve is under pressure and macro economy is facing stresses.
The Cabinet Division has moved to sensitise the implementing agencies to "keep no stone untouched" to get foreign funds, including from the Global Climate Fund (GCF), so that the government funds are not spent for the projects.
Officials said the cabinet secretary would soon sit with the secretaries of various ministries and divisions to take stock on the foreign funds that Bangladesh has so far secured and analyse the impediments they have faced in getting such financing.
A senior Cabinet Division official told the FE on Tuesday that a huge amount of money is available with the GCF. But Bangladesh has so far secured a paltry amount from it.
"May be we have documentary weakness while preparing proposals for the GCF. So, our applications become unsuccessful. We want to check out the flaws behind the failure."
He also said Bangladesh is one of the top countries that are vulnerable to climate change. But the country has so far got a very small amount from global communities and initiatives to adapt with erratic climate.
The official noted that the government gives a huge sum of money from its budget to the Bangladesh Climate Change Trust Fund every year to implement the CC-related projects.
Besides, separate allocations are kept for the ministries and divisions concerned for the same purpose.
"If the government bodies can secure foreign funds for these projects, we can use our own resources for other development works," he added.
In the proposed budget for the fiscal year (FY) 2023-24, the government has kept Tk 370 billion as climate-related allocation for 25 ministries and divisions, which is 8.99 per cent of their total budget. In the current FY, the allocation is Tk 372 billion or 9.98 per cent of their total budget.
The International Monetary Fund (IMF) in a recent note indicated that the annual average damage of Bangladesh has already reached US$ 1.0 billion or 0.7 per cent of the GDP due to tropical cyclones alone. Such impact may increase further, with more frequent and intense cyclones being significant contributors to major damages.
According to the World Meteorological Organisation (WMO) report 2021, Bangladesh incurred a loss of nearly $11.3 billion due to climate-induced natural disasters in 2021, which was about 2.47 per cent of its GDP for the FY 2021-22.
Data shows that until now, Bangladesh has obtained grants worth $374 million from the GCF for seven projects along with loans worth $380 million, including $6.1 million grant from the same fund for eight readiness activities.
On the other hand, the country has so far received a total of $160 million from the Global Environment Facility (GEF) in the form of grant and $1037 million as additional co-financing for 58 projects.
From the Climate Investment Funds (CIF), Bangladesh has received a total of $110 million in grants and near-zero interest credits from the Pilot Programme for Climate Resilience (PPCR).
The officials concerned opined that the amount that the country has so far received is very insignificant compared to its vulnerability to climate change.
The damages occur every year, and the government is forced to spend resources from its exchequer to adapt with the CC impacts, they added.
Lubna Yasmine, a joint secretary at the Ministry of Environment, Forest and Climate Change, told the FE on Tuesday that as the government fund is under pressure due to the Russia-Ukraine war, the high-ups are finding alternatives to get foreign funds to implement the climate-related projects.
"We will explore how we can design the projects to be successful in getting more foreign funds."
She, however, said getting funds from abroad is "very tough" and a matter of "proper negotiation", and in many cases the conditions related to them are found "not suitable for countries like ours".
"That is why we don't get adequate loans or sometimes we don't want to take such loans," she added.
Dr A Atiq Rahman, Executive Director at Bangladesh Centre for Advanced Studies (BCAS), told the FE on Tuesday that the quality of proposals submitted from Bangladesh for getting global funds is "comparatively low", and the donors check (the country's) competitiveness before paying money.
"The government organisations don't prepare proposals with due attention and required expertise." Unless the proposals are of a good standard, these would not be able to compete with the proposals of other countries.

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