International Climate Finance: UK aid for low-carbon development

Today ICAI published a performance review of the UK’s International Climate Finance, with support from Agulhas.

The UK’s International Climate Finance (ICF) is a portfolio of investments designed to support the eradication of international poverty by helping developing countries manage risk, build resilience to the impacts of climate change, take up low-carbon development and manage natural resources.

ICAI found the ICF makes strategic choices about which international funds and initiatives to support, helping to build a more coherent international climate finance architecture and to increase its influence over investment choices.

It also found that while DFID is progressively integrating low-carbon investment across its portfolio, it has not approached the integration process in a systematic way. Additionally, the overall strategy for the ICF has not been updated since 2011, leaving key elements of the approach unclear.

The UK has used its influence with multilateral climate funds well and has helped improve the quality of their work in a number of areas. However, a falling away in visibility and external communications around ICF may be inhibiting the achievement of its demonstration and influencing objectives.

The ICF has been a champion of a greater results focus in multilateral climate funds, however, data from KPIs do not appear to be informing portfolio management and while there are learning components within individual programmes, there has been no systematic process for capturing and sharing lessons across the portfolio.

ICAI made the following recommendations:

  1. UK ICF should refresh its strategy, including a clear approach to promoting low-carbon development and to integrating low-carbon development principles across the UK aid programme.
  2. DFID should adopt a more structured and deliberate approach to integrating low-carbon development across its programming.
  3. UK ICF should present a clear public narrative about the ambition and value of the UK’s climate investment.

Read the report

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