Despite the challenges of receiving accreditation for National Implementing Entities (NIEs), the Adaptation Fund has demonstrated numerous advantages for pursuing this approach to accessing financing from the Fund.
The Adaptation Fund is encouraging projects through direct access by placing a 50% funding cap for multilateral entities to reserve fund resources for national entities.
11 June 2012: In an article originally published in the International Development Journal, the Adaptation Fund outlines the benefits of its “direct access” approach for developing countries and national implementing entities (NIEs) to access funds without going through international organizations.
The article notes that much of the international funds available for environmental efforts in developing countries are only accessible through large international organizations. It underlines that only ten designated international organizations are able to manage projects or activities from the Global Environment Facility (GEF). In contrast, the direct access facility of the Adaptation Fund allows national institutions in developing countries to be accredited to receive funds and implement projects in particular countries. This requires national entities to prove their ability to meet international standards for finance, organization and anti-corruption measures. NIE applicants must be approved by the Adaptation Fund Accreditation Panel.
The article emphasizes the limitation that the Adaptation Fund cannot provide funding for capacity building of potential NIEs, requiring complementary support for national capacity building of such entities. It indicates that 35 entities have applied for accreditation and that 11 countries have accredited entities. As of March 2012, only two project proposals from NIEs have been approved. The articles notes that while direct access projects are more time consuming than traditional multilateral entities to develop, they provide additional benefits for improving resource management, capacity for governance, and project development, implementation, and management. The Adaptation Fund is encouraging projects through direct access by placing a 50% funding cap for multilateral entities to reserve fund resources for national entities.
The Global Environment Facility (GEF) provides secretariat services to the Adaptation Fund Board (AFB) and the World Bank serves as trustee of the Adaptation Fund, both on an interim basis. [Adaptation Fund Article]