National Adaptation Fund for Climate Change (NAFCC)

Kiran Malik

01 May, 2023

The National Adaptation Fund for Climate Change (NAFCC) is a Central Sector Scheme that was established in the 2015-16 fiscal year. NAFCC’s overarching goal is to assist concrete adaptation actions that lessen the negative consequences of climate change. This scheme’s activities are carried out in a project-based manner. NAFCC money is available for adaptation initiatives in industries including agriculture, animal husbandry, water, forestry, and tourism.

Project Definition

The projects that will receive funding from the NAFCC shall have as their sole goal the implementation of adaptation measures or interventions in the specified sector or sub-sector. An adaptation project or program is a collection of tasks intended to mitigate the negative effects and threats of climate change. By lowering vulnerability and boosting natural and human systems’ capacity to adapt to the effects of climate change, including climate variability, the activities should lead to noticeable and visible results on the ground. The projects/programs that will get NAFCC funding must have clear objectives, tangible results, and outputs that can be measured, monitored, and verified.

National Implementing (NIE)

NABARD, as the national implementing entity (NIE), will oversee the project’s overall execution through its regional offices situated in the states and UTs. Executing bodies that wish to apply for NAFCC funding include Ministries/Departments of the Government of India and State Government Departments.

National Bank for Agriculture and Rural Development (NABARD)

National Bank for Agriculture and Rural Development^[1], often known as NABARD, is the primary regulatory agency in the country’s rural banking system. It is the country’s highest development financing institution, created and controlled by the government of India. This bank’s goal is to give and regulate loans to rural regions, which will be the first step towards advancing the country’s rural development.

NABARD has been assigned several tasks in agriculture and financial development, including policy formation, planning, and operations. NABARD carries out these obligations effectively and strives to promote and develop rural industries like agriculture, cottage industries, other small-scale businesses, and rural crafts in order to generate better infrastructure and jobs.

Why Concentration On Climate Change?

A significant amount of data demonstrates that:

• Climate change poses serious threats to the safety of the general public’s health, ranging from severe extreme weather events to the wider spread of vector-borne illnesses like malaria and dengue.
• The International Organization on Migration estimates that up to 200 million people may have to relocate by 2050 as a result of climate change.
• There won’t be a universal feeling of how climate change will affect human health.
• India, which has a population of around 1.3 billion, is now the third-largest emitter of greenhouse gases worldwide.
• India’s cities are rapidly urbanizing and bearing the burden of the climate crisis, thus creating sustainable cities and creating jobs in wholesome neighbourhoods should be a major priority.

Objectives Of NAFCC

Providing financial support for specific adaptation projects and programs in the areas of agriculture, horticulture, agroforestry, environment, allied activities, water, forestry, urban, coastal, and low-lying system, disaster management, human health, marine system, tourism, habitat sector, and other rural livelihood sectors to address climate change-related issues.

• Preparing and updating climate scenarios, evaluating vulnerability, and analyzing climate effect
• Building the capacity of diverse stakeholders to adapt to climate change, manage projects, and create knowledge networks
• Using knowledge management to integrate the methods and lessons learned from carrying out projects and programs

Outcome Framework For NAFCC

At the fund level, the following outcome criteria will be applied:

• Reduced severe risks and detrimental consequences of climate change in the areas of agriculture and water.
• Maximizing multi-sectoral and cross-sectoral benefits and co-benefits helped to overcome the challenges of water and food security.
• The advancement of humanity, the eradication of poverty, the guarantee of a living, and a stronger feeling of community.
• Greater institutional and individual ability to reduce the risks associated with socioeconomic and environmental losses brought on by climate change.
• Enhanced local knowledge of and ownership over adaptation and risk-reduction measures.
• Increased flexibility in important resource and development areas.
• Increased ecological toughness in the face of stress imposed by climatic fluctuation and change.

Implementation

The National Adaptation Fund for Climate Change (NAFCC) in India has chosen the National Bank for Agriculture and Rural Development (NABARD) as the National Implementing Entity (NIE). This choice was decided due to NABARD’s extensive presence across the nation and its status as the NIE for the Adaptation Fund (AF) under the Kyoto Protocol.The execution of adaption initiatives in India would be facilitated and supported by NABARD, the NIE for NAFCC. To do this, it would be necessary to identify potential project ideas and concepts from the State Action Plan for Climate Change (SAPCC), develop project proposals, carry out project appraisals, sanction funds, disburse funds, monitor and evaluate project implementation, and develop the capacity of stakeholders, including state government.

Fund Utilization Plan (NAFCC):

The Fund Utilization Plan (NAFCC) states that projects will be approved in the order in which they are submitted. As a result, no specific State-based grant allocation will be made.

The State Government / EEs shall get the funds in installments. Release of the first installment would depend on the project’s half-yearly action plan, whilst release of the following installments would depend on the use of previous installments and the creation of a use Certificate. To guarantee a continuing flow of funding to the project, the claim for the succeeding payments may be submitted once the prior installment has been used to the tune of 75%. The number of payments will depend on the length of the project’s implementation duration, and there will be a cap of two installments each year.

Mechanism For Reporting, Monitoring, and Review

• A committee with the Director (Climate Change), Director (IFD), representatives of the National Implementing Entity, and representatives from relevant states as members will be formed under the chairmanship of the Joint Secretary (Climate Change), MoEF&CC, to regularly monitor and evaluate the progress of the scheme.
• Depending on the nature of the projects, periodic reporting in a specific format will be suggested at the time of sanction.
• The State Government and Executing Entities shall provide NABARD with the required progress report. Using the report as a basis, NABARD will inform the State/National Steering Committee of the progress.
• During the implementation period, NABARD will make a minimum of four field monitoring visits prior to each release.
• Third-party mid-term assessment will be used for programs that have been in place for more than three years, and third-party final evaluation will be used for all initiatives.
• After the project period is over, Project Completion Reports (PCRs) will be submitted, and NABARD will keep track of all projects’ progress in digital form for at least 10 years after they are finished. NABARD will create a Management Information System (MIS) for the project’s management.

Conclusion

The National Adaptation Fund for Climate Change (NAFCC) was established to fund adaptation activities in union territories (UTs) and states in India that are vulnerable to the negative impacts of climate change. As part of its Integrated Coastal Zone Management (ICZM) project, the Ministry of Environment, Forests, and Climate Change has established the Hazard Line across the whole Indian mainland coast. The 2019 Coastal Regulation Zone Notification was also published in an effort to maintain and safeguard the unique ecology of coastal and marine regions in order to enable long-term development.

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