The main challenge for sustainable finance in the DRC is the limited domestic financing to key economic activities and green interventions needed to implement development plans and sustainable adaptation solutions for the long term. The National Climate Change Policy, Strategy and Action Plan has identified a gap of 4,200 million USD for implementing the required adaptation programmes in the country .
Key policies and governance approach
The National Strategic Plan for Development (PNSD) aims to catapult DRC into a developed nation by 2050 with a substantially higher GDP per capita (USD 12,000) . The plan calls for the protection of the environment, and adaptation to the demands of climate change for a better living environment. The DRC has also adopted the 2030 Agenda for Sustainable Development.
Since 2012, the DRC has embarked on a process of integrating the issue of climate change into sectoral policies and strategies, as well as taking it into account in national development planning and developing financing strategy. The Sustainable Development Directorate within the Ministry of Environment, Nature Conservation and Tourism is the lead agency responsible for climate change adaptation efforts.
The National Investment Plan Agriculture (PNIA), established in 2013, is the national planning framework for national and external funds for the agriculture and rural development sector. It brings together all current and future programs and projects in the sector, and specifically focuses on adaptation to climate change.
The Incubator Fund for Clean Cooking in DRC has been created to support companies to access knowledge, technologies and finance that can help them to become increasingly profitable, reliable, viable and capable of providing innovative solutions to reduce wood energy consumption and boost local socio-economic development in the DRC .
Successes and Remaining Challenges
The effectiveness of the PNSD relies on the impact of adaptation planning in the DRC given the climate sensitive sectors which form its economy. However, climate change adaptation is not sufficiently mainstreamed and addressed within each economic sector’s strategy . For example, the plan aims to improve agricultural productivity, yet does not have a strategy laid out for addressing the likely changes the agriculture sector will experience in DRC under different climate change scenarios . It does not consider these very likely impacts in the not too distance future which will hinder the country’s ability to achieve its goal of economic development and higher GDP per capita as well as a number of other SDG targets .
In addition, the majority of the private sector in DRC is not aware of the climate related issues, and how it impacts them, 80% of the business community of DRC is made of SMEs, which lack the financial access and de-risked environment to innovate in climate-sensitive products and services .
There is also the insufficient technical and institutional capacity for effective coordination and implementation of adaptation planning and investments. The Ministry of the Environment and Sustainable Development (MEDD) is overseeing the effective implementation of national, regional, and international treaties and agreements, but has limited human resource-based capacities to implement adaptation projects .
Initiatives and Development Plans
The DRC government has established a fiduciary unit to manage budget flows and improve sustainable resource use both in the provinces and at national level.
The Ministry of the Environment and Sustainable Development in the DRC, and the UN Development Programme, have also launched a new Green Climate Fund (GCF)-financed project ‘Planning for medium-term investment for adaptation in climate-sensitive sectors in the Democratic Republic of Congo”. The Democratic Republic of the Congo (DRC) will benefit from over US$1.3 million from the Green Climate Fund (GCF) to advance adaptation planning over the next 18 months .
DRC is directing $60 million in Forest Investment Plan (FIP) grants and concessional financing to enhance ongoing national efforts to reduce emissions from deforestation and forest degradation (or REDD+) processes to address the key drivers of deforestation and forest degradation, namely, illegal logging, household slash-and-burn agriculture, and overexploitation of fuelwood.
Sustainable finance offers opportunities for a cleaner environment, and new and greener jobs. It is strategic for the DRC to:
- Continue efforts to integrate climate change concerns into relevant policies and planning processes at the state and national levels.
- Finalize regulations to fund and implement impact studies regarding climate change impacts for the country and key sectors .
- Explore the possibilities of promoting environmentally friendly small and medium-sized enterprises.
- Support urban and peri-urban actors who can help rural actors to engage in small-scale green industries, sustainable mining or circular economy business models.
- Reduce pollution and resource depletion through investments in eco-industrial activities and the environment sector.
- The country has an access rate to electricity of around 9%. Investments in the (hydro and solar) energy sector should be improved.
- To further strengthen adaptive capacities of the agricultural sector, the use of high-yield crop varieties could be introduced with improved post-harvest techniques .
- Funding could also be increased to strengthen the agricultural research and extension system so that technologies can be tested and adapted to the local environment and the resulting knowledge can be shared with farmers