Nordic development fund eyes new climate project

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  • One project aims to mitigate coastal erosion affecting West African cities
  • The Nordic Development Fund also wants to transform fishing in Mozambique
  • The fund is willing to take on risks that governments will not

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The Nordic Development Fund (NDF) that helps facilitate climate change investments in developing countries has started discussing several new project ideas with the World Bank — as the small fund celebrates its 25th anniversary. 

One is an initiative to mitigate coastal erosion affecting West African cities, a problem that climate change is expected to worsen, says Sari Söderström Feyzioğlu, sustainable development manager at the World Bank.

The NDF, a joint development finance institution of Denmark, Finland, Iceland, Norway and Sweden, helps the World Bank “add creative, cutting-edge climate change components to traditional lending and knowledge-generating projects”, she says.

For example, the NDF will make it possible to “assess the robustness of future hydroelectric power investments in the face of climate change in the major [African] river basins,” says Feyzioğlu.

Another project under discussion is in Mozambique, she says, where the fund will support efforts to improve the governance of local, artisanal fisheries and transform fishing — a sector already facing habitat loss and degradation due to unsustainable use, and that climate change will further damage. The NDF was founded in 1989 to promote economic and social development by providing financing to developing countries. In May 2009, its aim became to provide financial support to developing countries on climate change issues.

“The data will help to assess the vulnerabilities of the local communities and infrastructure, and thus help towards effective adaptation.”

Miguel Aldaz, IDB 

It also works with partners such as the African Development Bank, the Asian Development Bank and the Inter-American Development Bank (IDB).

Miguel Aldaz, lead partnerships officer at the IDB, says the NDF is small and flexible so it can move quickly when opportunities arise. In addition, “the NDF is willing to take on the risks and uncertainties that climate change and adaptation involves and that [local] governments are less inclined to accept”, he says.

Some projects deal with climate research-related activities and the collection of data on climate change impact and possible solutions.

“The collection of reliable data, for instance in relation to changing weather patterns locally, is key [to dealing with climate change]. The data will help to assess the vulnerabilities of the local communities and infrastructure, and thus help towards effective adaptation,” says Aldaz.

The NDF funds projects related to infrastructure, natural resources and climate change-related capacity building.

It has more than 65 projects in its portfolio, with about 15 new ones added each year.

Examples include schemes to develop innovative rainwater harvesting in Ghana, help people in Nepal switch to timber alternatives and reintroduce climate-resilient varieties of a food grain called cañahua in the Bolivian highlands.

The projects are financed through the NDF member states’ development cooperation budgets, and “mirror the Nordic countries’ priorities in the areas of climate change and development”, says Leena Klossner, the NDF’s deputy director.

Every year, the organisation allocates around €35-40 million (around US$49-56 million) to new projects — both for climate change mitigation and adaptation. “Several adaptation projects include vulnerability assessments, preparedness plans and early warning systems,” says Klossner.

These can relate, for example, to road transport and urban development, she says.

Some are focused on boosting traditional practices of climate adaptation, conducting additional research and planning, and ‘climate proofing’ specific sites.

For instance, one pilot project in Ghana aims to decrease emissions and pressure on local forests by replacing non-renewable charcoal with briquettes made from biomass. And in Burkina Faso, plans are under way to build the first renewable and waste energy-powered food factory in West Africa.