The Adaptation Fund is an international fund that finances projects and programs aimed at helping developing countries to adapt to the harmful effects of climate change. It is set up under the Kyoto Protocol of the United Nations Framework Convention on Climate Change (UNFCCC).
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The Adaptation Fund was officially launched in 2007[1], although it was established in 2001 at the 7th Conference of the Parties (COP7) to the UNFCCC in Marrakech, Morocco[2] , to finance concrete adaptation projects and programmes that reduce the adverse effects of climate change facing communities, countries, and sectors. It is intended to finance the full costs of adaptation in developing countries that are Parties to the Kyoto Protocol[3] .
The Adaptation Fund is mainly financed with a share of proceeds from clean development mechanism (CDM) project activities, but also with funds from other sources. The share of proceeds amounts to 2% of certified emission reductions (CER) issued for a CDM project activity. At the end of July 2010, the AFB had around USD 160 million available to support adaptation. By the end of 2012 total potential resources from CER monetization is expected to be around USD 350 million[4] . Other funding sources include donations from Annex 1 countries, which amounted to USD 70.95 million as of July 31, 2010.
The Adaptation Fund is managed by the Adaptation Fund Board (AFB) with the Global Environment Facility (GEF) providing secretariat services to the Board, and the World Bank serving as the trustee of the Adaptation Fund. The AFB is composed of 16 members and 16 alternates representing Annex I countries, Non-Annex I countries, Least Developed Countries (LDCs), Small Island Developing States (SIDS), and regional constituencies. The AFB meets every three months, during which the Board makes decisions on procedural issues and project approvals[5]. More recently, the German Parliament has approved a bill that would confer legal capacity to the AFB [6]; it is expected to be signed by the President of Germany and subsequently to enter into force in early 2011.
The Adaptation Fund is unique in its disbursement modality since it promotes direct access to funds by developing countries through accredited National Implementing Entities.
By January 5, 2011, the AFB has accredited the following Implementing Entities:
National Implementing Entities (NIEs)
Multilateral Implementing Entities (MIEs)