Climate Change and Climate Finance in Lao PDR

Climate Change and Climate Finance in Lao PDR Introduction COORDINATED GCF/GEF NATIONAL DIALOGUE 12 -14 FEBRUARY 2019 – VIENTIANE CAPITAL – LAO PDR Syamphone SENGCHANDALA (Mr) DDG and NDA, Department of Climate Change, Ministry of Natural Resources and Environment

OUTLINE 1. Climate Change and its impacts 2. NDA for GCF 3. Climate Change policy and partnership 4. Current status preparedness to access the GCF 5. Key challenges and next step

1 - Climate Change and its impacts Climate Change affects people’s lives ACCESS TO FOOD AND WATER : rice, freshwater Lao Farmers Devastated by Severe Drought – Asia. News 20/07/2015) HOUSEHOLDS ACCESS TO SERVICES : Education, health, , … ການປຽນແປງດນຟາອາກາດ ກະທບຕຊວດຂອງຄນ , ສດ ແລະ

1 - Climate Change and its impacts Climate Change will affect the long-term development TRADE TRANSPORT COMMERCE ການປຽນແປງດນຟາອາກາດ ແມນບນຫາທທາທາຍຕການ ພດທະນາໄລຍະຍາວຂອງ

1 - Climate Change and its impacts The ADAPTATION to climate change is crucial to Laos CLIMATE RESILIENT CITIES Bioengineering Road (landslide protection) Crop diversification ການສາງຄວາມເຂມແຂງໃນການ ປບຕວເຂາກບສະພາບການປຽນ

1 - Climate Change and its impacts The MITIGATION of climate change need to be taken into account ການຫດຜອນການປອຍທາດອາຍເຮອນແກວ ມຄວາມມຈຳເປນຕອງໄດເອາໃຈໃສ.

2. Laos DNA Establish 2015 MONRE nominated DDC National Focal for GCF National Designated Authority Department of Climate Change 1. Div. of General Affairs (Secretariat) 2. Div. of Education and Awareness 5. Div. of Adaptation 3. Div. of Promotion 6. Div. of DRR 4. Div. of Mitigation

2. Laos DNA Establish MINISTRY OF NATURAL RESOURCES AND ENVIRONMENT Department of CLIMATE CHANGE COORDINATION - coordination with line agencies and administrations on climate change activities OPERATIONALIZATION - development and implementation of CC action plans and programmes REPRESENTATION - national focal point for climate change conventions and agreements REPORTING - evaluation and reporting to the government the implementation of CC activities KNOWLEDGE - collection & monitoring the information on implementation of climate change activities AWARENESS - raising the public awareness and engaging people to contribute to climate change COMMUNICATION - dissemination of CC decisions/actions to the public

3. Climate Change policy and partnership The Context - Climate Change Action Plans and Policies NDC 2016 8 th NDSEDP 11

3. Key Climate Change policy and partnership National Socio Economic Development Plan 8 th NDSEDP

3. Climate Change policy and partnership NATIONALLY DETERMINED CONTRIBUTIONS MITIGATION ADAPTATION M 1 -Land Use Land Change and Forest A 1 -Agriculture • -Increasing and maintaining National Forest • Farming Systems and Agriculture Infrastructure Cover • Appropriate Technologies M 2 -Renewable Energy. A 2 -Forestry and Land Use Change • Increasing use of renewable energy sources • Forestry Production and Forest Ecosystems A 3 -Water resource M 3 -Rural Electrification • Water Resource Information Systems • -Increasing the level of rural electrification • Managing Watersheds and Wetlands for Climate Change Resilience • Water Resource Infrastructure Resilience to Climate Change • Climate Change Capacity in the Water Resource Sector M 4 -Sustainable Transport • -Improving the road network and developing public transport services M 5 - Institutional and policy framework • Climate change policy A 4 -Transport and Urban Development • Urban Development and Infrastructure A 5 -Public Health • Public Health Infrastructure and Water Supply Systems

3. Climate Change policy and partnership Nationally Determined Contributions – MITIGATION Mitigation Priorities Increasing and maintaining national forest cover Increasing use of renewable energy sources Increasing the level of rural electrification Improving the road network and developing public transport services Climate change policy and implementation plans

3. Climate Change policy and partnership CC related- Lao PDR instruments and partners AF FIP UN- REDD CTCN REDD+ Early Movers NGOs/CSO UNEP IUCN WWF IFAD UNDP Bilateral GIZ FAO UNHABITAT LUXDEV AFD others JICA NDF KFW WB ADB IFC EIB KOICA PROPARCO USAID Private Sector IFIs / MDBs EU New Chip Xeng Group NTPC BFL Acleda Partners WCS GCF CBIT ASAP CDM FFEM GEF GAFSP Carbon Market German - IKI LDCF FCPF Carbon Fund UN Agencies EU-GCCA Financing instruments EU FLEGT- Facility FCPF readiness fund

4. Current status of preparedness to access the GCF Status overview 1. COORDINATION READINESS SUPPORT (4 readiness approved & 3 readiness developed & 1 NAP on discussion) - Enhanced Coordination of on-going activities - Increased Awareness and communication : national and provincial level - Processes development : Non objection and stakeholder engagement 2. STRATEGIC PLANNING - Country Program– Short term and long term priorities - Strategic engagement on priority areas: Forest and Sustainable cities - NAP complementary and coherence with existing projects 3. ACCREDITATION - Support EPF to become one of the National accredited entities. INVESTMENTS 4 FP ready 3 project ideas 4. INVESTMENTS - 4 project proposal ready for consideration by GCF ( USD 125 million) - 3 project ideas on development

4. Current status of preparedness to access the GCF- Four potential areas of support NDA strengthening 1 Strategic frameworks 2 Support for direct access entities 3 Adaptation planning processes 4

4. Current status of preparedness to access the GCF Lao’s approach COORDINATION and M&E 4 NAPs - ADAPTATION PLANS (LDCF-UNEP focused on information and processes and LDCF FAO on data information and DSS) R 7 STRATEGIC PLANNING CLIMATE FINANCE SECTORIAL STRATEGIES Agriculture and Forest (ADB) Sustainable cities (ADB) Sustainable transport (tbd) Others 2 GCF INVESTMENT PLANS : Programmatic approaches 1. Sustainable cities (GGGI) –R 3 2. REDD+ (FAO) –R 4 3. Agriculture and food security 4. Sustainable transport 5. Renewable energy and electrification –R 6 6. Health and education PRIVATE SECTOR ENGAGEMENT – R 5 DIRECT ACCESS 3 EPF ACCREDITATION (GCF-GIZ) - R 2 INNOVATION CAPACITY BUILDING NDA STRENGTHNING(GCF-UNDP) – including COUNTRY PROGRAM (R 1) Processes 1 Capacity building Stakeholder engagement Strategic frameworks

4. Current status of preparedness to access the GCF Readiness Activities –Portfolio Project TITLE DP R 1 - Green Climate Fund readiness and UNDP preparatory support for Laos PDR Benef. Supporting the development of the country work Ending programme, no objection procedure and February 2019; 300, 000 stakeholder engagement guideline USD R 2 - Getting Lao PDR Environment Protection Fund accredited to the GCF GIZ USD EPF 488, 000 R 3 - Readiness support to enhance green finance in the areas of green cities GGGI USD DCC Priority projects/programs related to green, climate resilient cities and opportunities and 474, 000 challenges to private sector engagement R 4 - Incentive mechanisms for private sector engagement under REDD+ FAO USD DOF Duration Supporting the accreditation of EPF to the GCF Developing a strategy for financing the forestry 349, 000 and land use sector Approved;

4. Current status of preparedness to access the GCF Readiness Activities - Pipeline Project TITLE DP R 5 - Enhancing NDA capacity to engage GGGI private sector and access to the GCF DCC R 6 - Market transformation of energy efficient lighting, air conditioners and refrigerators R 7 - Urban climate change resilience in cities along the Greater Mekong Subregion East-West Economic Corridor UNEP MEM Benef. Duration USD Submitted Further building NDA capacity in accessing the GCF 610, 000 comments and engaging with the private sector received Submitted— USD Market study and potential activities on energy 345, 500 efficient lighting, air conditioners and refrigerators On discussion UNUSD Submitted – Climate change exposure and adaptation Habitat 415, 000 measures in an economic priority area of Lao PDR re-considered MPWT TBD < 3 m R 8 - NAP financing and implementation Supporting the development of projects, including Under USD DCC for the water sector their financing strategy, to implement the NAP consideration /EPF R 7 proposal objectives may be adjusted for a NAP proposal- as R 8

4. Current status of preparedness to access the GCF Project and programs - Pipeline Project TITLE AE- -Gov GCF (US$) Instr. UNEP P 1 - Building resilience of urban populations with 19, 267, 000 Grant Mo. NRE ecosystem based solutions P 2 - Resilient Integrated Food Systems (RIFS) in rural Laos UNDP 31, 425, 910 Grant MAF ADB P 3 - Climate-friendly agribusiness value chain sector 30, 000 Grant MAF project GIZ P 4 - Climate change mitigation by implementing 45, 000 Grant MAF & provincial REDD+ action plans through governance, MONRE forest landscapes and livelihoods WFP P 5 - Climate resilient smallholder farmers and local $9, 000 Grant communities supporting community-led school feeding MAF P 6 – Lao PDR REDD+ results-based payment for results JICA TBD Grant MAF period 2015 -2018 WB P 7 - Lao PDR Landscapes and Livelihoods Project TBD Grant, MONRE loan MAF Status FP submitted to GCF Secretariat FP finalized – to submitted by February 2019 Project idea agreed by MAF Project idea under discussion For discussion

4. Current status of preparedness to access the GCF R 1 - Green Climate Fund readiness and preparatory support for Laos PDR –UNDP: 3 main outcome: 1. Laos GCF Country Programme 2. Laos GCF No Objection Procedure 3. Laos GCF Stakeholder Engagement Guidelines

Lao PDR GCF Country Programme

What is a GCF Country Programme? • Sets out national priorities for GCF • Brings together climate change and development priorities • Is not a requirement to access the GCF (voluntary) • Will be regularly updated to reflect changing priorities (living document) Benefits of having a GCF Country Programme: ü To support discussions with Accredited Entities ü Improved project identification and selection ü Increased country ownership ü Increased transparency and GCF awareness with national stakeholders

Outline of Country Programme 1. INTRODUCTION: climate change profile, socioeconomic development profile, climate change policy response, capacity development needs 2. COUNTRY PRIORITIES AND GCF PIPELINE: summary GCF sectoral priority climate activities, pipeline of investment and readiness projects, potential national Accredited Entities 3. GCF ENGAGEMENT AND COORDINATION: institutional arrangements, Accredited Entities in Lao PDR, stakeholder engagement, GCF/GEF coordination, EPF as key implementation mechanism 4. MONITORING AND EVALUATION: M&E framework for Programme 5. IMPLEMENTATION PLAN: action plan to implement Programme • Annex 1: Stakeholders consulted • Annex 2: Detailed sectoral priority climate activities • Annex 3: GCF results framework

Process for identifying GCF priorities

CP priorities Mitigation Adaptation SHORT TERM PRIORITIES (2019 -2021) WATER RELATED LAND USE LAND CHANGE AND FOREST Increase the resilience of urban areas to water impact, in particular to floods (R 8) Increase and maintain National Forest Cover (R 4) - Small scale infrastructures, i. e. water retention, dykes P 1 - Ecosystem based adaptation (P 1) Potential projects key areas: - REDD+ Provincial plan implementation (P 4) - Climate proofing infrastructures - REDD+ Results Based Payments (P 6) - Knowledge and data information production and sharing - Regional collaboration and law enforcement Increase the resilience of rural areas to climate induced droughts and - Landscape and forestoration approach (P 7) floods (R 8) - National Protected Areas protection (P 5) - Small scale infrastructures - Private sector engagement (credit lines, guarantees, (R 4) - Ground water development - Regulatory and legal framework (taxes, FLEGT, etc. ) - Ecosystem based adaptation - Watershed approaches - Knowledge and data information production and sharing AGRICULTURE Enhance resilience of smallholder farming communities in vulnerable Climate friendly agribusiness value chain (P 3) areas (P 2) - Enhancing crop productivity - Food and nutrition security (P 5) - Climate proofing production and post-harvest infrastructures - Micro watershed management - Climate sensitive agri-business (i. e. climate smart agriculture) - Climate information system - Promote climate-related insurance P 1 – Project number 1 : Building resilience of urban populations with ecosystem based solutions R 4 – Readiness number 4 : Incentive mechanisms for private sector engagement under REDD+

CP priorities Mitigation Adaptation MEDIUM to LONG TERM PRIORITIES (2022 - 2030) ENERGY EFFICIENCY AND RENEWABLE ENERGY Promoting energy efficiency measures Energy efficient appliances (R 6) Energy efficiency of public buildings Engagement of Private sector and market development (R 6) Increasing use of renewable energy sources Waste to energy in sustainable cities (R 3) Renewable energy sources financing Biofuels development Engagement of Private sector and public-private partnership Sustainable Transport Implementing a low carbon transport development Develop public transport nationally and regionally Support implementation of the Clean Renewable Vehicle Development Strategy (draft) PUBLIC HEALTH Increasing the resilience of the health system (infrastructure and population) Resilient Water Supply Systems expansion and development Climate change health strategy Development Climate-health sensitive urban planning (R 3 and P 1) TRANSPORT Transport and urban development Enhance the resilience of urban infrastructures Climate proof infrastructure Land use planning

LIVING DOCUMENT : Update of the Country Program – UNDP-GCF A framework with a preliminary list of priorities - Y 0 Country Program 2 – A further detailed of priority projects and coordination arrangements Y 1 GCF REDD+ Investment plan FAO Sust Cities Investment plan GGGI GCF readiness Climate Finance Investment Plans Forest & Agriculture Climate Finance Investment Plans Sustainable Cities ADB TA Country Program 3 Priority projects : private sector and Direct Access Entities (i. e. EPF) EPF Accreditation - GIZ Energy Efficiency Markets - UNEP Private Sector Enhanced Engagement-GGI 9 th NSEDP Climate Change Strategy GCF readiness Climate Finance Investment Plans (Health ? )

Lao PDR GCF No Objection Procedure

What is a GCF No Objection Procedure? • Process to ensure consistency of GCF funding proposals with national strategies and priorities • Process that result in a no-objection letter - to be signed by the NDA (DCC). - is a GCF condition for approval of investments and accreditation applications from national entities • Countries decide the appropriate national process for providing the no-objection letter.

Lao PDR No Objection Procedure for GCF Type of activity 1. Concept notes Who submits to Clearance from NOP letter required GCF NDA by GCF NDA or Accredited Yes No Entity 2. Project preparation facility Accredited Entity Yes No 3. Investment project funding Accredited Entity Yes National entity Yes proposals 4. Accreditation applications from national entities

No Objection Procedure for GCF funding proposals Line Ministry Accredited Entity NDA (DCC) Line Ministry with the support of the Accredited Entity initiates Project Development (Idea/Concept/Proposal) IP 2: Line Ministry provides clearance letter GEF and GCF Committee/ MONRE Minister IP 1: Accredited Entity submits funding proposal to line Ministry IP 3: Line Ministry or Accredited Entity submits funding proposal and clearance letter to NDA IP 4: NDA gives feedback on funding proposal IP 5: If in conformity with criteria ; Funding proposal is presented for approval to Committee / Minister NO OBJECTION LETTER IP 7: NDA provides no objection letter to Accredited Entity IP 6: GEF and GCF Committee /Minister approves no objection letter

Main Criteria for Non Objection of Funding proposal 1. aligned to Lao PDR’s national priorities, strategies and plans and GCF country program 2. in conformity with relevant national and international laws and regulations 3. complement to existing activities or funding proposals 4. adequately consulted stakeholders, beneficiaries and affected communities 5. cleared by relevant line ministries • If the proposal is a public loan, clearance by relevant Ministry (Mo. F/MPI) is needed.

Lao PDR GCF Stakeholder Engagement Guidelines

What are Stakeholder Engagement Guidelines? • Provides clarity on national expectations and GCF requirements in relation to stakeholder engagement when identifying, developing and implementing projects • Enhanced national ownership, as an opportunity for stakeholders to provide feedback and get involved in GCF activities

Outline of the Stakeholder Engagement Guidelines 1. Introduction: Background, objective, importance of robust and inclusive stakeholder engagement, links to Country Programme and No Objection Procedure 2. GCF guidance on stakeholder engagement: summary of key GCF policies which set GCF requirements on stakeholder engagement 3. Stakeholder engagement for GCF project development: groups of stakeholders to be consulted, consultative mechanisms to be utilised, case study of UNDP project proposal submitted to GCF

5. Key challenges and next step 1. Coordination : enhanced coordination, in particular in Country Program priority areas; 2. Capacity and dissemination: • Continue capacity and support EPF to be National Entity for direct access to GCF • Continue Line Ministry/NDA capacity building • Enhanced stakeholders engagement and dissemination 3. Alignment : Consider the updated NDCs and 9 th NSEDP when updating the Country Program 4. Engagement with Private sector : Build a platform for engagement with private sector 5. Enhanced Coordinated engagement with GEF and others (CTCN, AF, etc)

domestic process for providing the noobjection letter. Department of Climate Change • Countries determine the appropriate Ministry of Natural Resources and Environment (MONRE) THANKS FOR YOUR ATTENTION