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.
Overview of IBFCR
The overarching philosophy of the project is to strengthen, build and promote the use of country systems to identify sources of climate finance (domestic and international) and manage climate response in Bangladesh in a transparent and effective way.
The CPEIR study was part of a broader effort by the Government of Bangladesh (GoB), supported by UNDP, to strengthen the capacity of national and local level institutions to manage the increasing flow of climate finance, which ultimately helped the development of the CFF by the FD. The CFF was necessary for Bangladesh to make the country system ready to generate domestic sources of climate finance and access international climate finance, and utilize the finances with highest transparency and accountability.
The introduction of a climate dimension in tracking budgets and expenditure will be a very helpful development to ensure that climate sensitive activity is recognised within the performance accountability architecture and the MTBF. The CFF will take into account the potential role, risks and responsibilities of the institutions involved in climate response (including the private sector). Hence, the next important step will be to regularly update the CFF on the basis of detailed and estimated climate investments.
The focus of IBFCR project will be on the implementation of this national CFF, which will provide an incentive framework for climate change adaptation and mitigation. In doing so, it will also strengthen the PFM system for climate finance, particularly with regards to accountability and transparency, as well as to the flow of finances to line ministries, and to the local level. This will include activities to integrate climate into the medium term budget framework, introduce climate budget coding, bring existing climate funds on budget, and budget support for climate finance.