ENVIRONMENT & ECONOMY IN THE MALDIVES
were available to gather the right data and incorporate the best designs suited for the islands. OFQ : Do SIDS collaborate and share learning – or rather compete for climate financing? KN: There’s lots of knowledge to be exchanged. SIDS have long been active and sophisticated agents in the international climate response, having repeatedly advocated for increased support – especially for adaptation. The problem is that many SIDS like the Maldives don’t have the requisite fiduciary standards, all the checks and balances, in our institutions and organizations. So if we want to access finance directly, which would save us time and money, we need to have stronger governance and better fiduciary standards. In this regard, we’ve forged a close relationship with Antigua and Barbuda, which was able to pass the accreditation process and get themselves approved by the GCF. They came to the Maldives and helped our team that’s working on the accreditation, which had to set up a monitoring and evaluation unit, while reinforcing our audits. We’ve also been working with other countries in the vast AIMS region covering the Atlantic, Indian Ocean and South China Sea to help each secure accreditation and to access climate finance. Although there are big differences between SIDS in terms of economic development, connectivity to the rest of the world and economic activities, there are often common experiences and lessons to be learned. It would be useful to establish stronger advocacy to make funding applications easier because they are often cumbersome, costly and time- consuming. Sometimes a proposal can take four or five years to prepare. By the time the project is ready to roll out, you may have entered a new political phase of island councils with new stakeholders, priorities and realities on the ground. I think it’s also good for countries to band together and to make these demands towards international institutions. This was something that was discussed a lot in our Transitional Committee on Loss and Damage to facilitate access to funding. Of course,
there must be checks and balances, but it is possible. Recipient countries sometimes have to procure extra funds and time to gather data and demonstrate evidence that a project location’s environmental degradation happened because of climate change. This rationale is important in justifying projects, but countries like the Maldives do not have research institutions and historic data available so it is sometimes very challenging to even begin to make a project document, hindering accessibility. OFQ : How is the Loss and Damage Fund evolving? How can MDBs like the OPEC Fund help? KN: We’ve seen tremendous progress on the Loss and Damage Fund. In just over a year it went from being a possibility to a reality – and that is not normal in such large international settings! The Transitional Committee worked very hard with the World Bank and others to reach an agreement on costing governance sources and other big issues, which was not easy.
Coming out of COP28 we had a strong mandate to deliver on the recommendations crafted by the Transitional Committee, so I’m optimistic about delivering the funding arrangements in 2024 for several reasons. First, I think parties passed the recommendations on the first day for a reason. That was very political and there was a reason why it had to be done. It showed the confidence that they have in the soundness of those recommendations and this was affirmed by the financial support pledge for the fund’s initial capitalization, including the US$100 million from the UAE which under the convention is technically still a developing country. That was a tremendous display of leadership from the presidency. Second, I think the agreement reached with the World Bank is historic. What we saw in the Transitional Committee was a genuine desire by the World Bank to listen to the concerns of developing countries and raise those issues with management. The agreement we reached with the World Bank on hosting the Fund includes novel provisions like direct access, programmatic support and the ability to go to capital markets. These conditions in one fund hosted by the World Bank is unprecedented. Third, I’m confident because the World Bank has high aspirations for the success of this initiative. The agreement we reached is based on the principle of “trust but verify”. That is something we fought very hard for and the fact that the World Bank agreed shows that they’re serious about meeting these conditions. It also means that those on the board and the technical side have a lot of work to do to meet the World Bank’s conditions in order to accept money and begin lending. So it’s a two- way street and the development banks have a huge role to play in the success not only of the Fund but also the funding arrangements. A key provision in the agreement mandates the establishment of a “Loss and Damage Dialogue”, including the primary agencies responsible for loss and damage related activities. There are humanitarian agencies, development banks, public and private financial
The OPEC Fund & the Maldives
To date, the OPEC Fund has approved 29 loans in the public and private sector for US$256.1 million in the Maldives. The OPEC Fund has also provided US$208.5 in trade finance for seven transactions and six national grants worth US$2.8 million. Example: A US$50 million project signed in 2015 and currently under implementation will raise health standards and living conditions of approximately 124,000 people in 49 selected islands. The goals will be achieved through the construction of extensive water supply systems and distribution networks, the development of a regional waste management system in the upper north region of the Maldives and the construction of 21 fully equipped waste management centers.
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