Inclusive Budgeting and Financing for Climate Resilience (IBFCR)

Bangladesh as a low-lying delta ecosystem on the confluence of three river systems with one of the highest population densities in the world is considered one of the most climate vulnerable countries. Climate Change and its adverse impacts present a constellation of fiscal, environmental, poverty, gender, and development issues and challenges. The country is addressing the challenges through the increasing flow to climate finance.

In 2005, Bangladesh as one of the first Least Developed Countries (LDCs) completed its National Adaptation Programmes of Action (NAPAs), citing ’urgent and immediate’ adaption needs. The Government of Bangladesh (GOB) prepared and adopted the Bangladesh Climate Change Strategy and Action Plan (BCCSAP) in 2008. However, financing its implementation presented a major challenge. This led to the creation of two separate funds: the Bangladesh Climate Change Trust Fund (BCCTF), and the Bangladesh Climate Change Resilience Fund (BCCRF). To establish poverty-climate –finance linkages, a Bangladesh Climate Public Expenditure and Institutional Review (CPEIR) was conducted in 2012, which delivered a number of recommendations, including the key proposal to develop a Climate Fiscal Framework (CFF). In 2014, the GoB prepared and formally adopted a CFF that provides an account of fiscal developments and resource estimates for short, medium, and long-term climate expenditures; and supports analysis of how climate change-related expenditures are being integrated into national budgetary processes.

The Inclusive Budgeting and Financing for Climate Resilience (IBFCR) project has been undertaken to rationalize the Public Financial Management (PFM) of climate finance and introduce a climate policy based focus to planning, budgeting and performance management of climate finance by implementing the CFF. The implementation of the project will include the recognition and development of climate policy dimension within the revised chart of accounts. The climate dimension in tracking budgets and expenditure will be a very helpful development to ensure that climate sensitive activity is recognized within the performance accountability architecture and the Medium-Term Budget Framework (MTBF).

The project intends to foster a sustainable basis for identifying, maximizing and managing sources and application of funds for financing climate resilient actions. It further intends to develop climate related capacity and expertise within Finance Division (FD) and develop stronger relationships and collaborative partnerships with other major climate stakeholders, but primarily with Economic Relations Division (ERD) and the National Designated Authority (NDA) of Bangladesh to the Green Climate Fund (GCF), Programming Division and General Economic Division (GED) of Planning Commission, Ministry of Environment and Forests (MoEF), Local Government Division (LGD), Ministry of Disaster Management and Relief (MoDMR), Ministry of Agriculture (MoA), Ministry of Fisheries and Livestock (MoFL), Ministries implementing Social Safety Nets programmes in Climate vulnerable regions, Ministry of Women and Children Affairs  (MoWCA), Office of the Comptroller and Auditor General (OCAG), Bangladesh Bank and the National parliament that will enable Bangladesh to maximize benefits of national and international climate finance.

The project will also aim to enhance the recognition of climate policy and national strategy in the key FD led budgetary processes including MTBF and attendant Performance Management Systems, Ministry Budget Framework (MBF) and the Medium Term Macroeconomic Framework (MTMF).

It will work closely with other projects within the FD, ERD, Internal Resources Division (IRD), GED, Programming Division, Implementation Monitoring and Evaluation Division (IMED) to forge greater cohesion and with those being led by FD and programming Division in respect of the recognition of climate issues for national interest.

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