Climate Change Impact and Structural Reforms in Kiribati
KIRIBATI
(IMF, 2021) and to continue adapting to climate change by building resilient infrastructure. These
investments would not only increase productivity but deliver sustainable and inclusive growth.
D. Climate Finance
21.
Given Kiribati's limited ability to internally generate resources for long-term climate
change mitigation and adaptation investments, leveraging climate finance is critical. As
discussed in previous sections of the note, the scale of the financing required for climate
investments is very large and may exceed 11 percent of GDP annually in 2040. Fouad et al. (2021)
detail how the Government of Kiribati (GoK) may access funding for climate projects, including
through bilateral donations from foreign governments, multilateral development banks (MDBs), and
climate funds (CFS). The latter two often involve a CF (such as the Green Climate Fund, GCF, or the
Adaptation Fund, AF) partnering with an Accredited Entity (AE). AEs may be either MDBs such as the
Asian Development Bank (ADB) and the World Bank (WB), or regional institutions such as the
Secretariat of the Pacific Regional Environment Programme (SPREP) and Pacific Islands Forum
Secretariat (PIFS).
22. Approved funding for climate projects has only covered a small fraction of the total
estimated investment needs, with actual disbursements at significantly lower levels. In 2016,
the GoK established the Climate Finance Division within the Ministry of Finance and Economic
Development, with the aim to build the necessary infrastructure to access climate funds. The Ministry
of Finance and Economic Development has been designated as the national entity managing the
climate projects to be co-funded with the help of international AEs and CFs.9 As shown in Figure 5,
the gap between approved and disbursed GCF funding for Kiribati is wide and in line with that
experienced by other Pacific island countries (PICS).
Figure 5. Kiribati: Funding Approved and Disbursed by the GCF as of
May 2021
(In USD million)
100
80
60
40
20
0
â– Approved
Disbursed
Papua New
Guinea
Sources: Green Climate Fund; OECD Climate-related Development Finance Database; and IMF staff calculations.
9 According to the website of the KCFD, the MFED is the National Designated Authority (NDA) to the Green Climate
Fund (GCF), the Focal Point to the Climate Investment Funds (CIF), the Designated Authority to the Adaptation Fund
(AF), and more recently the Operational Focal Point for the Global Environmental Facility (GEF).
12 INTERNATIONAL MONETARY FUNDView entire presentation