Enhancing India’s Readiness to Climate Finance

Enhancing India’s readiness to access and deliver international climate finance
Develop and introduce standardised methodologies and key performance indicators (KPIs) for
measuring and reporting on mitigation and adaptation projects/programmes.
Introduce regular reporting requirements (along with appropriate communication channels) for
DFIs, NIEs and other project implementing actors (e.g. NGOs or the private sector) to report
on project-level KPIs.
Build capacity within DFIs to measure and report on the KPIs of climate-related programmes.
National-level MRV:
Work with the Ministry of Finance to develop a series of classifications/codes that can track
national budgetary expenditure on climate-related activities (including National Missions,
programmes projects with climate co-benefits, etc.) in India.
Undertake an initial baseline of climate finance spending from budgetary sources, using a
CPEIR-type methodology.
Collect data from international donors (both bilateral and multilateral) on their climate-related
expenditure in India. This data should include a number of different indicators in addition to
volume of finance – including sectoral/thematic focus, geographic location, targeted impact,
etc.
Introduce non-mandatory reporting channels for private sector, NGOs, thinktanks, research
institutions, universities, charitable foundations, and other civil society actors to report on
climate-related expenditure (in line with KPIs collected at the project-level).
Provide training and capacity support to the Ministry of finance, other line Ministries, private
sector actors, civil society, etc. for the implementation of new MRV requirements.
Data processing and reporting:
Develop a database to collect data from each of the two MRV streams.
Process national-level data to determine if headline values meet the expected resource
allocation strategy to implement the NAPCC.
Process project-level data to determine the effectiveness of climate finance spending at the
sub-national level.
Where particular strengths or gaps in the effectiveness of climate finance are highlighted,
liaise with relevant line Ministries, policy planners, etc. to develop an action plan that responds
to challenges and scales-up successes.
Develop regular reporting channels and templates to report on data collected under the MRV
system.
Provide input and expert advice to the PMO Council, Planning Commission, the Ministry of
Finance, other line Ministries, National Missions, etc. when developing important national
plans (e.g. 5-year plans) that have a climate change/climate finance component.
7.2 The future climate finance delivery structure in India
If India follows the recommendations of this report to address its seven readiness gaps, the
institutional structure for accessing and delivering climate finance would look different than it does
today (see Figure 3.1 in Chapter 3.1). Figure 7.1 provides an overview of how the new institutional
structure would look if India followed all the recommendations above. In particular, it highlights how
the new climate finance coordinating agency would manage the overall national climate finance
response – providing overall direction to accessing climate finance; coordinating a needs assessment
and cost benefit analysis to prioritise interventions; and directing the delivery of climate finance in line
with the NAPCC, SAPCCs, and other national development plans (Recommendations #1 and #2).
The Figure also highlights a number of other points from the recommendations section. It outlines
how climate finance delivery bodies (particularly DFIs) will have increased capacity to deliver climate
finance in a coordinated way under the NAPCC Missions and SAPCCs, and to develop bankable
Ref: Ricardo-AEA/R/ED59216/Final Report
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