Once a country decides to establish an NCF, stakeholders must identify the specific and necessary func-
tions of the NCF. Functions should build upon existing mechanisms and systems that support action
on climate change. They can include goal setting, strategic programming, capitalization, partnership
management, project approval, policy assurance, financial control and performance measurement. Each
should be considered carefully. The functions of an NCF influence its components and services. An NCF
with ill-designed functions runs the risk of not only failing to reach its goals, but of undermining progress
toward low-emission, climate-resilient development.
In UNDP’s experience, there are a number of core functions that are common to any funding mechanism,
including NCFs. First, an NCF should enhance or provide a system that supports goal setting and the
development of programmatic strategies on climate change. By setting in place a process that aligns
and supports existing general goals and strategic programmes, the NCF can provide a coordinated
supporting structure to a country’s national climate and development priorities. Further, by facilitating
regular discussions and stakeholder engagement on national climate issues, an NCF can serve as a central
body for discussion and decision-making about how the NCF will support national action.
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