Case Study

Inclusive Climate Finance Model Empowers Climate-vulnerable Communities in Bangladesh

Posted: 01 May 2024

Updated: 10 September 2024

Asia - Bangladesh

by UNDP

Issue

Bangladesh’s coastal communities are particularly vulnerable to climate-change-related events such as cyclones, tidal flooding, salinity intrusion, and excessive heat. These events negatively impact the livelihoods, water security, and health of people in these communities, who primarily rely on natural resources for their food and livelihoods.

■CHALLENGES

High poverty levels hinder communities’ capacity to adapt to climate change events. The loss of livelihoods and water insecurity exacerbate this poverty. At the leadership level, local governments also have limited resources to invest in adaptive infrastructure, further compounding the climate vulnerability of coastal communities in Bangladesh.

Solution

LoGIC in Bangladesh is a devolved and inclusive climate finance model that empowers local governments and communities to lead adaptation projects. LoGIC achieves this by involving communities in designing and implementing adaptation projects and providing access to climate finance.

Overview

In Bangladesh, the Local Government Division is involving communities in identifying, designing, and implementing climate adaptation interventions through the Local Government Initiative on Climate Change (LoGIC) project model. LoGIC empowers communities to lead these interventions by allowing community members and local governments to access climate financing.

LoGIC supports sustainable adaptation interventions by training recipients of funds on financial management and by bringing changes in the relecant policies incorporating an innovating tool called Climate Vulnerability Index (CVI) to allow more financing to the vulnerable people and helping in designing best practices and for monitoring and evaluation of projects. The initiative has equipped more than 400,000 climate-vulnerable households, helping nearly two million people better adapt to the impacts of climate change. LoGIC’s work was recognized with a Local Adaptation Champions Award (Devolving Finance category).

Details

The Local Government Initiative on Climate Finance (LoGIC) is a multi-donor collaborative initiative for emboldening vulnerable communities and local governments to plan and finance climate change adaptation solutions. The implementing partner for this project is the Local Government Division of the Ministry of Local Government, Rural Development and Co-operatives, under the Government of Bangladesh. LoGIC was first initiated in July 2016 to support adaptation interventions in areas highly susceptible to the negative impacts of climate change, called “climate hotspots.” The project targeted 400,000 households in nine districts invarious climate stress areas including coastal belt in Bangladesh.

LoGIC allows both local communities and governments to access and manage funds through two grants – the Community Resilience Fund and the Performance-Based Climate Resilience Grant. Both grants fund inclusive adaptation interventions that community members identify, design, and implement, ensuring effective participation and prioritization of local needs. LoGIC also offers a platform for sharing best practices and provides a monitoring and evaluation system to measure adaptation interventions’ effectiveness.

Women as leaders of climate change adaptation and poverty reduction

Through LoGIC, almost two million people in coastal Bangladesh are now better equipped to cope with climate change impacts. The Community Resilience Fund is primarily managed by women-led households, thereby addressing gender concerns, and creating a space for women to engage in local-level decision-making. To ensure transparency and accountability, the Local Government Division provides training in financial management and conducting audits. The Performance-Based Climate Resilience Grant for local governments supplements these governments’ budgets for climate-related interventions, allowing them to support additional adaptation measures.

Accessing resources via climate funds has allowed these stakeholders to operationalize adaptation interventions and reduce poverty through climate-related livelihoods. Additionally, the project has established Climate-Smart Co-operatives, linking community members to banks, promoting financial inclusion of climate-vulnerable households, and ensuring that interventions can be scaled.

Inclusive climate finance in Bangladesh: Looking forward

In the Local Adaptation Champions Awards (Devolving Finance category), LoGIC was awarded for its innovative and sustainable approach to local government. The award proceeds will be used to further support adaptation interventions and technical assistance. And because of the project’s initial success, the partners – the Government of Bangladesh, UNDP, UNCDF, EU, Sweden, and Denmark – extended the project by another 2 years (to June 2025), aiming to engage more climate-vulnerable communities in different climate hotspots of Bangladesh.