Catalyzing Green Investment with a National Climate Change Fund for Malawi

Jun 23, 2017

A farmer in Malawi checking his crops

Following in the footsteps of Rwanda, Malawi with support from UNDP has embarked on its own journey to establish a national climate change fund to help put the country on a greener development path.

During a two-day workshop, participants from Departments of Finance, Disaster Management Affairs, Forestry, Environmental Affairs, Justice, and several representatives from the districts and civil society organizations learned how the Government of Rwanda, since 2012, became one of the first nations to develop a national climate change and environment fund, known as FONERWA (www.fonerwa.org).   The fund was established following the adoption of Rwanda’s Green Growth and Climate Resilience Strategy, and is the primary mechanism through which Rwanda delivers international and national extra-budgetary climate and environment finance.  Funds are distributed to Government, private sector, civil society and community partners to implement projects in climate adaptation, clean energy, and environmental protection, to boost investment in low-emission and climate-resilient development.

Noting the need for Malawi to mobilize more domestic resources to tackle its climate change challenges, the UNDP Deputy Resident Representative, Ms. Claire Medina, reflected on events over the past two years. “Malawi is still recovering from cumulative impacts of the 2015 floods followed by severe drought during the 2016-17 cropping season. We should all be concerned about the increasing geographical coverage and damage from such disasters.” This trend is more worrying as projections for the region point to increased frequency, severity, and volatility for Malawi’s weather systems.  Participants at the workshop agreed on the need to scale-up household resilience and climate-smart agricultural practices, while also embracing cleaner sources of energy.

The UNDP Deputy Resident Representative cautioned that Malawi cannot achieve the Sustainable Development Goals (SDGs) in the absence of action on climate change.  She also emphasized that action on poverty reduction and climate change are not mutually exclusive, “Malawi can tackle climate change while growing its economy, it can expand renewable energy while creating jobs, and it can protect the country’s natural beauty while promoting sustainable tourism.” 

The Rwandan delegation shared their experiences in creating a national fund, highlighting that they looked first to mobilize more of their own domestic revenue, considering options such as mining fees, annual green levies on vehicles and high energy consuming products such as air conditioners, all of which can both incentivize green behavior while also generating revenue for capitalization of Malawi’s national fund.

The workshop included experience sharing about the importance of strong fiduciary standards, social and environmental safeguards, transparent governance arrangements, and robust performance management systems to build the overall creditability for a national fund.  Since FONERWA’s inception in Rwanda, 90,498 green jobs have been created; 35,356 hectares of forest land rehabilitated; 12,998 hectares of watersheds and water bodies rehabilitated; and 18,914 families have been connected to clean off-grid energy.

In closing the workshop, government representatives reaffirmed their commitment to apply the best practices from Rwanda in the design of Malawi’s own national climate change fund.   The Coordinator of FONERWA, Mr. Alex Musila, welcomed UNDP’s support to enable knowledge sharing and encouraged participants by stating, “Creating a climate change fund that is truly national in scope takes time, leadership and perseverance. By working together, I’ve no doubt that Malawi can tackle its climate challenge.”