E Co. Funding proposal for Vanuatu community-based climate resilience approved at GCFB.32

climate finance vanuatu

As a Small Island Developing States (SIDS) in the Pacific, Vanuatu is highly vulnerable to the impacts of climate change. Higher temperatures combined with sea level rise and a variety of extreme weather events such as cyclones, storm surges, flooding and droughts threaten the lives of local communities. Much of the population relies on subsistence agriculture and fishing as income generators but they are rapidly becoming negatively impacted due to climate change. Therefore, the country prioritises adaptation measures to combat such threats. Many of those most vulnerable are children.

Save the Children Australia, the Ministry of Climate Change and Save the Children Vanuatu have been working together to formulate a programme “The Vanuatu Community-based Climate Resilience Project (VCCRP)” for submission to the Green Climate Fund (GCF). The Project aims to ensure that communities across Vanuatu have reduced vulnerability and increased resilience in the face of climate variability and extremes, and the adaptive capacity needed to maintain sustainable development pathways across a range of potential climate futures. The programme aims to achieve this by ensuring it is community-based and locally led to promote long-term sustainability and maximum impact. At the 32nd meeting of the GCF Board (B.32) in Antigua and Barbuda in May 2022, the Board approved the project. The Vanuatu Community-based Climate Resilience Project is the second GCF project approved in Vanuatu. The project, worth USD 32.7 million, includes a GCF grant of over USD 26 million, with additional co-financing from the Governments of Vanuatu and Australia and Save the Children Australia.

Programme description

This project will support highly vulnerable rural and coastal communities to increase their resilience to climate change, through targeted community and local adaptation activities in the agriculture and fisheries sectors. The project will also provide access to climate information and early warning systems at the local level. The project follows the following structure:

  1. Developing and implementing scalable locally appropriate actions to meet immediate and future community adaptation needs
  2. Strengthening and supporting government and civil society to facilitate local-level adaptation
  3. Facilitating horizontal and vertical dialogue between communities, government, civil society and the private sector to enhance responsiveness to community needs.

Project activities will be delivered by a range of partners, including key government departments, provincial governments and local civil society organisations.
The Vanuatu Community-based Climate Resilience Project will be implemented through local government and community organisations, following extensive consultations with affected communities. It aims to build the long-term adaptive capacity necessary to pursue sustainable development pathways across a range of potential climate futures. Programmes will increase community access to climate information and early warning systems, as part of disaster risk reduction measures. The project will also support locally led adaptation plans to increase food security and build climate-resilient livelihoods, by restoring and protecting coastal
areas, enabling women-led enterprises, and supporting climate-resilient agriculture and fisheries techniques. Key activities include establishing local disaster risk reduction committees, protecting and restoring 11,600 hectares of agricultural and fisheries sites and training smallholder farmers in climate-resilient agriculture techniques and fishers in effective coastal resource management. The project expects to benefit 200,000 people, including 90,000 direct beneficiaries and 110,000 indirect beneficiaries.

What we did

E Co. had the pleasure of assisting in the preparation of the funding proposal process for the VCCRP. Specifically, E Co’s role was to conduct and prepare economic and financial analysis of the VCCRP project, a mandatory GCF project proposal package. As part of the analysis, E Co completed the following:

  1. Reviewed available reports and secondary data on relevant economic aspects of project
  2. Worked closely with the technical team, to prepare economic cost estimates and fund flow arrangement which are based on verifiable data and are sufficient to support project implementation
  3. Conducted the economic analysis covering economic cost and benefit analysis, economic internal rates of return (EIRR), economic net-present value (NPV), sensitivity analysis, risk analysis, and benefit distributional analysis
  4. Collected and calculated the conversion factors and prepare the economic cost estimates
  5. Prepared the project’s economic due diligence documents, including project cost tables. The purpose of the economic and financial analysis is to assess the investment in the project to better understand the potential impact and value for money. They are essential for funders to determine whether or not the investment is attractive to them

Our insight

E Co’s Senior consultant, Marijan Gajsak, conducted the economic and financial analysis for this project and had this to say,

“E Co. developed economic and financial analysis for this amazing project. We are very pleased that we have been able to support this project in its development and ensuring its effectiveness. This project will directly reach more than 90,000 people in almost 20,000 households and 282 communities across all six provinces (33% of the total population or 43% of the rural population) and a further 110,000 people indirectly (a further 40% of total population or 52% of the rural population). This extent speaks for itself. This project will be vital for meeting Vanuatu’s climate adaptation needs and ensuring the countrywide climate resilience. We are looking forward to hearing about its successful implementation.”