RFI 72088722-PACIFIC-RFI-00001 Pacific Islands Regional Climate Finance Activity.pdf

Request for Information USAID/Pacific Islands Regional Climate Finance Activity

Reference Number: 72088722-PACIFIC/RFI-00001 Release Date: August 22, 2022 Response Due Date: September 6, 2022 12:00nn (Philippines Time)

Pursuant to FAR 52.215-3 Request for Information (Oct. 1997), the United States Government, represented by the United States Agency for International Development (USAID) in the Pacific Islands, is publishing the subject Request for Information (RFI) in order to obtain information and comments from all interested public and private parties on proposed climate change finance activity in the Pacific Islands where USAID works. Mission intends to design a five year program. A draft of the requirement is stated under Attachment 1, draft Statement of Objectives (SOO) for the pending activity.

THIS IS A REQUEST FOR INFORMATION ONLY. It is not a Request for Proposal, a Request for Quotation, a Request for Application, an Invitation for Bids, a Solicitation, or an indication USAID will contract for the items contained in this RFI . This RFI is an attempt to reach out in an effort to determine industry capabilities and interests and will be treated as information only. In accordance with U.S. Federal Acquisition Regulations FAR 15.201(e), responses to this notice are not offers and cannot be accepted by the Government to form a binding contract. Responses to this RFI are strictly voluntary. Issuance of this notice does not constitute an award commitment on the part of the U.S. Government, nor does it commit the U.S. Government to pay for any costs incurred in the preparation of comments. Responders are solely responsible for all expenses associated with responding to this RFI. Responses to this RFI may not be returned and respondents may not be notified of the result of the review. If a Solicitation is issued, it will be announced on www.SAM.gov or www.grants.gov at a later date, and all interested parties must respond to that Solicitation announcement separately from any response to this announcement. This RFI does not restrict the Government's acquisition approach on a future Solicitation.

Businesses should identify any proprietary information in their responses. Proprietary materials will neither be distributed, nor discussed with, any other organization. Information submitted in response to this notice will be used at the discretion of the Government. Further, the information submitted will remain confidential insofar as permitted by law, including the Freedom of Information and Privacy Acts.

The standard clauses or provisions for awards are generally prescribed by law and regulation and will vary considerably by award type. Information regarding clauses and provisions will be provided when the award type is identified after proposals/applications are sought in the future.

http://www.sam.gov/ http://www.grants.gov/

RFI# 72088722-PACIFIC/RFI-00001

FAR 52.215-3 REQUEST FOR INFORMATION OR SOLICITATION FOR PLANNING

PURPOSES (OCT 1997)

(a) The Government does not intend to award a contract on the basis of this solicitation or to otherwise pay for the information solicited except as an allowable cost under other contracts as provided in subsection 31.205-18, Bid and proposal costs, of the Federal Acquisition Regulation.

(b) Although “proposal” and “offeror” are used in this Request for Information, your response will be treated as information only. It will not be used as a proposal.

(c) This solicitation is issued for the purpose of: receiving recommendations, approaches, and information that could inform the design of USAID/Pacific Islands new Climate Finance Activity.

Instructions for Submitting Responses/Comments

Responses (comments, suggestions, and enhancements) to this RFI are due on the date and time specified above. Submission via email is required. Respondents may also include self/organization information including past experiences working in this subject area, experience working with other stakeholders, including implementing partners on the ground or host country government officials, or capacity information. Send responses to this RFI via email address pacific-regionalclimate@usaid.gov with the subject title “ Request for Information (RFI):

USAID/Pacific Islands Climate Finance Activity” , no later than the date/time stated above.

This Notice can be viewed and downloaded from the internet at www.beta.SAM.gov .

Questions and Information

The purpose of this RFI is to provide public information to all interested parties of USAID’s intent to support climate finance in the Pacific Islands Region, as well as to collect information and suggestions about how best to address capacity gaps related to climate financing for adaptation, mitigation, and systemic change to address the climate crisis. The information contained within this RFI is intended solely as a thought-piece; ideas may change significantly during the Mission’s program design, consultation, and approval process. In addition, any information collected through this RFI may or may not be used to help guide thinking about climate finance programming.

In particular, USAID seeks feedback on the following key questions. Respondents are not required to provide feedback on all of USAID’s questions. To facilitate compilation of responses please maintain the format and number each response that corresponds to the questions below:

Results Framework

Please provide your feedback on the proposed results framework:

mailto:pacific-regionalclimate@usaid.gov http://www.beta.sam.gov/

1. To what extent are the objectives achievable given the results and intermediate results provided in the Results Framework (RF)?

2. What other elements or other considerations need to be taken into account to ensure effective climate finance programming within the Pacific Islands region?

Objectives

3. Do the proposed objectives in attachment 1 address the major institutional barriers or limitations in both Pacific Islands regional bodies and in national governments for better management of climate financial resources?

a. Why or why not?

b. If not, how can they be improved?

4. What regulatory structures exist that could currently be leveraged, and what other policies and plans need to be developed at either the regional or national level, to better manage climate finances in the region?

5. Any other feedback as it relates to the implementation of a Regional Climate Finance activity can be presented in 500 words single spaced 1 page limit.

Thank you for your interest in USAID/Pacific Islands activities, and we look forward to your comments.

Sincerely, /s/ Stéphane C. Bright Contracting/Agreement Officer Regional Office of Acquisition and Assistance

ATTACHMENT 1, DRAFT STATEMENT OF OBJECTIVES (SOO)

PURPOSE

This USAID/Pacific Islands Regional Climate Finance activity will contribute to USAID Pacific Islands goal to advance a more resilient Pacific Islands region. Specifically, within the USAID Pacific Islands 2022 – 2027 Strategic Framework (SF) this new activity will support the first Development Objective (DO 1): increase community resilience by adapting to climate change and the intermediate result (IR 1.1): Capacity to adapt and respond to climate and disaster impacts strengthened.

At regional and broader levels, this activity supports and contributes to key strategies, priorities and initiatives for both the US government and the Pacific Islands region. These include directly supporting the goals and targets of the USAID 2022-2030 Climate Strategy and addressing climate change as articulated in regional frameworks, including the Framework for Pacific Regionalism , the Boe Declaration Action Plan , and the latest Blue Pacific Framework .

Notably, this activity will also advance the Biden-Harris Administration’s priority to support vulnerable nations and small island developing states (SIDS), like climate-frontline Pacific Island countries, to increase the flow and access to equitable climate finance. It will also increase and strengthen climate resilience by enabling sustainable climate actions that are locally led, owned, and implemented, and context appropriate.

BACKGROUND and PROBLEM STATEMENT The level of exposure to climate change is determined by geographical and physical factors that countries cannot control (Chen et al., 2015). In the Pacific, these impacts present as sea level rise (SLR), increasing storms and tropical cyclones, increasing temperatures, and ecosystem degradation. Over the past 100 years, PICs have experienced an average SLR of approximately 17 centimeters due to the increase in average global temperatures driving both thermal expansion and increasing volume. This rise in SLR impacts community resilience from loss of coastal areas, increasing inundation during storm surge, and loss of the extent of their exclusive economic zones. More frequent and intense storms and tropical cyclones have caused widespread coastal flooding and shoreline erosion. Excessive rainfall has damaged infrastructure and altered water security for communities. Between now and 2100, it is expected that average annual temperatures in the region will rise 1.4–3.7 degrees Celsius, and sea levels are expected to increase by an additional 120–200 cm, that is, 7 to 10 times more than in the past 100 years. These changes are contributing to stressed water systems, diminished fish stocks, ocean acidification, and loss of coral reefs and biodiversity, all of which can devastate economic activity and livelihoods in the PICs (Nunn 2012).

Climate change adaptation in the Pacific region is critical, but costs are significant. Public sector investment costs for adaptation are disproportionately high in the PICs due to a number of factors. First, expensive coastal protection infrastructure in low-lying areas is https://www.usaid.gov/pacific-islands-strategic-framework-2022-2027 https://www.usaid.gov/climate/strategy https://www.forumsec.org/wp-content/uploads/2018/02/Framework-for-Pacific-Regionalism_booklet.pdf https://www.forumsec.org/wp-content/uploads/2019/10/BOE-document-Action-Plan.pdf https://www.forumsec.org/2050strategy/ https://www.forumsec.org/2050strategy/ needed, but there are few local resources to utilize for its development. Second, the PICs have relatively low population density spread across large distances with limited support infrastructure (e.g., large port facilities, sea walls, typhoon shelters). Third, the magnitude of impacts from storm-surge routinely damages linear infrastructure, applies increased stress on mangroves, and limits resource availability. These factors and others create an environment where finance needs are high, cost of intervention is similarly high, and economies of scale are difficult to develop.

Several factors add to the challenge of carrying out development and climate adaptation programs in the Pacific. The twelve PICs where USAID works are spread out over a vast area of the Pacific Ocean that is geographically equivalent to the size of the African continent. Transportation is difficult and expensive; limited flights and poor connections mean that travel between countries routinely requires a full day or more. Infrastructure for communications and information technology is underdeveloped and often unreliable, in addition to limited early-warning system capacities. The PICs vary widely in their stages of development, with some having reached middle income status (e.g. Samoa and Fiji) and some ranking among the world’s least developed. Cultures vary widely, with more than 1,300 languages spoken. National populations range from under 10,000 to more than 8 million. Contrasting geophysical and economic conditions cause climate change to affect PICs differently: nations composed largely of rugged mountains and highlands may be most affected by changes in temperatures and rainfall patterns that impact agriculture, while others are low-lying atolls where sea level rise and more frequent and intense storms will be more immediate threats.

The PICs face significant challenges in gaining or increasing access to climate adaptation financing, regardless of the source (e.g., foreign direct investment [FDI], multi-donor trust funds, and the private sector). Across the Pacific, governments face institutional and human resource capacity constraints, which limit their ability to plan, access, fund, implement, and sustain climate adaptation projects and investments needed for long-term community resilience. Accessing FDI requires relationships with foreign governments, reducing transaction costs for access to funds and funding instruments, and continued engagement with partner countries. In terms of multi-donor trust funds, PICs must satisfy rigorous and complex access requirements, navigate different access modalities, and successfully work with local and international partners to implement and execute projects. Accessing private sector resources requires both increased engagement with communities and counterparts, as well as increasing the knowledge base and reducing information barriers which increase investment uncertainty and limit private sector engagement.

Problem Statement : Highly vulnerable to the impacts of climate change, Pacific Island Countries (PICs) are particularly exposed, lack sufficient national-level resources, and comparatively less local capacity to effectively adapt to changing climate conditions and increased incidences of natural disasters.

Theory of Change USAID supports the PICs and the region as a whole to continue resilient development in light of the direct and indirect impacts of climate change. This will include measurable progress toward implementing an increased number of local, national and regional climate interventions and an increase in climate resilient investments supported through multi-source climate funding including foreign direct investment (FDI), multilateral multi-donor trust funds (e.g., Green Climate Fund (GCF), Global Environment Facility (GEF) and the Adaptation Fund), and the private sector. Provided the challenges posed by the climate crisis for the PICs in particular, including the specific contextual challenges for development improvement and humanitarian assistance, the NAME activity will advance the individual needs of island states in the Pacific to build resilient communities that can absorb, cope with, and recover from the negative impacts of climate change and natural and man-made disasters. The development hypothesis for this activity is provided below:

IF access to climate finance for the Pacific Islands is increased; AND IF the capacity of key stakeholders to manage climate finance resources and implement interventions is improved, THEN the capacity of the Pacific Islands to adapt and respond to climate and disaster impacts will be strengthened.

OBJECTIVES

The goal of this activity is to improve adaptation and mitigation ability for regional bodies and national governments in the 12 countries of the Pacific Islands where USAID works (i.e., the Federated States of Micronesia [FSM], Fiji, Kiribati, Nauru, Palau, Papua New Guinea, Republic of the Marshall Islands [RMI], Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu) by a) mobilizing climate finance and b) improved climate finance management. The anticipated results under the activity-level results framework for the USAID/Pacific Islands Regional Climate Finance activity correlate with the planned objectives under this SOO.

Figure 1: Results Framework

Objective 1: Mobilize Climate Finance Countries in the Pacific Islands region have difficulty mobilizing the necessary financial resources to address the impacts of climate on their communities. Although a number of funding instruments exist which could be accessed by PICs such as multi donor funds (e.g., Green Climate Fund, Global Environment Facility), FDI, and private sector funding sources, there are challenges to actively securing those funds and coordinating the universe of potential donors to get the effective mix of funding to build local resilience to climate impacts.

The PICs are among some of the poorest small states globally, both by gross domestic product (GDP) or gross national income (GNI) per capita (IMF 2017). They broadly share multiple characteristics that limit their ability to quickly expand economic development as they are small in land area, remote, and geographically dispersed both within archipelagic countries and between each other. However, these countries also exhibit a high degree of heterogeneity, in that they have very different cultural contexts, range in development and industrial output, and population size. For example, two thirds of the countries in the region are defined as micro states, or those countries with a population less than 200,000 people, half of all the countries are classified as fragile states, and nearly 80% of the entire population of the region resides in Papua New Guinea (approximately 8 million people).

These equations of scaling and limited national finance capacity exacerbate climate financing challenges due to lack of financial infrastructure and capacity to be able to directly identify, engage, and secure necessary finance for projects that contribute to adaptation, but also mitigation goals such as natural climate solutions.

There is a large gap in climate funding relative to PICSs, where projections show additional average spending needs to reach between 6 and 9 percent of annual GDP, depending on the country, to meet the climate finance targets for adaptation and mitigation actions needed in the region. That totals nearly a billion dollars across the region per year that needs to be accounted for in future climate finance plans and actions. In 2021, the International Monetary Fund (IMF) found that IPICs need about 9 percent of GDP annually on average for climate adaptation investments under a “risk-intolerant” strategy. This strategy is designed to build coastal protection and resilience infrastructure that can limit future economic losses by PICs due to climate impacts. However, some countries have significantly higher costs, with the low-lying atoll countries requiring more than 10 percent of their GDP per annum.

Accessing climate finance from multi donor trust funds is often difficult to navigate and can become problematic for developing countries with limited resources and capacity.

Helping to increase access to climate funding from these sources will require both targeted technical assistance for project proposal development and increasing efforts for countries and regional bodies to become accredited direct access entities to increase their ability to access these funds. Access to FDI also has inherent challenges, based on a number of factors which include goals of the foreign investment instruments and changes in amounts and reporting requirements. Similarly, private sector climate investment, despite making up the largest pool of potential funding, is complex and the amounts and sources are not always readily apparent, particularly for countries with limited capacity to identify those sources.

Results At a minimum, this activity objective will work to achieve the following results:

● Increased amounts of funding provided to the Pacific islands region by multi donor trust funds, FDI, and the private sector.

● More government and other entities with multi donor trust fund accreditation.

● Greater number of approved and funded projects by multi donor trust funds (e.g., GCF, GEF, Adaptation Fund) for PICs.

● Greater number of people with increased resilience to the impacts of climate change across the Pacific Islands region.

● Coordination of multiple sources of climate finance to provide comprehensive finance solutions for locally-determined climate adaptation and natural climate solutions.

Indicators At a minimum, these are the mandatory indicators that will be used to track results for this activity objective:

● EG. 11-4: Amount of investment mobilized (In USD) For Climate Change Adaptation As Supported By USG Assistance.

● EG. 11-5: Number of people supported by the USG to adapt to the effects of climate change.

Objective 2: Improve Climate Finance Management Effectively managing increased climate finance and access requires a degree of capacity and institutional strength that may not be available in all contexts for most PICs. In general, the concept of readiness has been used in this context, and while there is no broad consensus definition of readiness, generally it is understood to be the process of enhancing the capabilities of developing countries to receive and spend climate finance, including reporting on the impacts of that funding. In order to increase the amount of and coordinated flows of climate finance, readiness is seen as the global prerequisite for access to predictable and quality climate finance.

Given the breadth of finance sources that have been conducted in recent stocktakes of the universe of options - which include more than 50 international public funds, 60 carbon markets, and 6000 private equity funds, as well as 99 multilateral and bilateral climate funds, thousands of direct private sector investors, and all FDI options - the ability of countries to demonstrate the institutional and human capacity to effectively manage these funding sources is paramount. Moreover, as the challenges from climate impacts can be highly localized, particularly in the PICs, readiness needs to be viewed as a nationwide phenomenon with direct impacts and needs of communities rather than a mere institutional issue. Regardless of the donor source, importance is being given to countries facilitating an attractive enabling and investment environment so that there can be the necessary catalyzation of public finance from more nimble private sources.

Improving the organizational structure and processes to better manage increasing amounts of climate funding for long-term adaptive pathways will be crucial for PICs to effectively provide the evidence of readiness as well as ensure they are attracting the right mix of potential climate funding. These challenges at the capacity level include accreditation issues and barriers for access, project design challenges that make project finance structuring difficult to design and implement, general capacity challenges such as lack of national plans and strategies, and macroeconomic environment issues that limit the fiscal space from designing and executing a pipeline of projects.

Efforts need to be designed to work with the range of stakeholders that need to have internal capacity strengthened as well as the associated enabling environment that include regional bodies, national governments, and community leadership. This should also include increasing the the ability, knowledge, and actions of individuals to access and manage financial resources associated with climate adaptation and mitigation projects and to determine and translate locally-identified needs and opportunities into business models that boost investor confidence, reduce barriers to piloting new technologies, and open up sustainable markets to unlock additional sources of finance such as private sector capital for climate action. This should also develop and implement policies, plans, and frameworks that can access and manage multiple-source climate funding that support Pacific Island governments to develop tools, metrics, standards and capacity to assess, manage and integrate climate risks into cross sectoral policies to promote a climate smart development planning framework. Some of these efforts could be in the development of new instruments, such as insurance and social protection instruments to transfer risks in an inclusive, people-centered manner, especially with women, youth, indigenous peoples and marginal groups.

Results At a minimum, this activity objective will work to achieve the following results:

● Climate smart development planning frameworks designed that account for a robust assessment of climate risks into cross sectoral plans, policies and actions.

● Tools, metrics, standards and capacity developed to assess, and manage and integrate climate risks into development planning.

● The development of insurance and social protection instruments supported.

● Transformative climate investments catalyzed by translating locally-identified needs and opportunities into a national list of priority investments and a portfolio of projects that are ready for investment by public or private entities, domestic and international.

● Access to capital increased and enabling environment reforms promoted that help governments and private sector entities avoid accumulating unsustainable debt as they pivot to climate-friendly investments.

Indicators At a minimum, these are the mandatory indicators that will be used to track results for this activity objective:

● EG. 11-1 Number of people trained in climate change adaptation supported by USG assistance.

● EG. 11-2 Number of institutions with improved capacity to assess or address climate change risks supported by USG assistance.

● EG. 11-6 Number of people using climate information or implementing risk-reducing actions to improve resilience to climate change as supported by USG assistance.

Cross-Cutting Objective: Effective and Streamlined Coordination of Climate Finance Through Various Partners and Access Modalities Coordinating and increasing the flow of multi-source climate financing for national governments and regional bodies to support climate adaptation and mitigation activities for long-term resilience is also needed given the range of climate challenges facing PICs as well as the various types of investments that may need to be aggregated to achieve the desired results. Meeting the adaptation, and potentially mitigation goals of PICs will require helping to coordinate and drive multiple finance opportunities to align with adaptation goals outlined in National Adaptation Plans (NAPs), Nationally Determined Contributions (NDCs), and community resilience. This support should also encompass helping regional entities and governments to receive accreditation, strengthen safeguards for shareholder resources, and develop a pipeline of viable projects targeted towards key developments and services.

In the Pacific Islands region, climate finance that drives actionable programs tends to be channeled from a number of funds and programs. This mix includes multilateral funds such as the Global Environment Facility (GEF), the UNFCCC’s Adaptation Fund, the Climate Investment Funds (CIFs) — implemented by the multilateral development banks (MDBs)

— and the Green Climate Fund (GCF), as well as many bilateral aid programs from FDI, various types of private investment funds, and direct private sector engagement. Moreover, the cultural, geographic, demographic and economic development diversity across the region, coupled with the suitability of different funding sources and programs to different needs, maintaining a diversity of funding sources is an important component of increasing the resilience through climate funding. However, there are drawbacks of this multitude of funding sources through transaction costs in finding the most suitable source or courses for particular applications becomes increasingly difficult. These challenges around coordination also relate to the different administrative requirements and timeframes that impose additional reporting burdens on countries and regional bodies that accept funding from various sources.

Understanding that many of the existing funding mechanisms are not strictly designed to address the small size and capacity constraints of vulnerable PICs, there also remains a position to be able to coordinate and manage the interaction of them with the locally-led and determined needs of communities in the region. Greater coordination will avoid the potential duplication of initiatives, streamline administrative and capacity requirements, and provide the funding necessary to meet the specific challenges of individual island nations.

Results At a minimum, this activity objective will work to achieve the following results:

● Coordination of multiple sources of climate finance to provide comprehensive finance solutions for locally-determined climate adaptation and natural climate solutions.

● Integrate with the two main development objectives of this activity.

Indicators At a minimum, these are the mandatory indicators that will be used to track results for this activity objective:

● EG. 11-2 Number of institutions with improved capacity to assess or address climate change risks supported by USG assistance.

● EG. 11-4: Amount of investment mobilized (in USD) for climate change adaptation as supported by USG assistance.

Cross-Cutting Objective: Inclusive and Equitable Participation of Indigenous Communities and Those Most Impacted by Climate Change, Including Women and Children.

The climate crisis affects everyone on Earth, but for some more vulnerable groups, impacts are disproportionate. Similarly, more economically disadvantaged communities are more severely affected than higher-income communities, due in part from their increased dependence on natural resources and limited ability to adapt to climate impacts. Women and children are also affected by climate change in different ways where they have increased vulnerability and decreased baseline levels of resilience overall. Indigenous groups also have increased vulnerability to climate impacts due to their reliance on natural resources and connection with landscapes that are at the frontlines of climate impacts, and in the pacific islands this can relate directly to impacts from SLR and increased tropical cyclones.

Women historically bear the larger responsibility for tasks that are made more difficult by climate change while having unequal access to resources and decision-making processes.

However, women are critical in helping to respond to climate for community resilience more broadly given their skills and knowledge of local natural resource management. In the PICs, these impacts are exacerbated for communities that rely on women to provide child rearing as well as the land-based component of marine natural resources management, including coastal fishing for food security. Climate-related programs must be built on a solid understanding of the varied vulnerabilities and capacities within communities, and in particular the importance of indigenous groups and their traditional cultural knowledge.

These historical cultural practices often directly relate to natural resource management and usage, and therefore are directly impacted by climate change in the region.

Results At a minimum, this activity objective will work to achieve the following results:

● Increased inclusion of disadvantaged and vulnerable groups into climate finance plans and actions.

● Increased traditional knowledge and indigenous groups within climate finance adaptation and natural climate solution efforts.

Indicators At a minimum, these are the mandatory indicators that will be used to track results for this activity objective:

● GNDR. 2: Percentage of female participants in USG-assisted programs designed to increase access to productive economic resources (assets, credit, income or employment).

● GNDR. 8: Number of persons trained with USG assistance to advance outcomes consistent with gender equality or female empowerment through their roles in public or private sector institutions or organizations.

● EG. 11-6 Number of people using climate information or implementing risk-reducing actions to improve resilience to climate change as supported by USG assistance.-disaggregated by gender and indigenous peoples.

*** End of RFI***