Building climate resilience of agricultural systems in the North-East and Central districts of Botswana

Botswana | UNDP

19 November 2019

Please submit the completed form to fundingproposal@gcfund.org, using the following name convention in the subject line and file name: “CN-[Accredited Entity or Country]-YYYYMMDD”

Project/Programme Title: Building climate resilience of agricultural systems in the North-East and Central districts of Botswana

Country(ies): Botswana

National Designated Authority(ies) (NDA):

Ministry of Finance and Economic Development

Accredited Entity(ies) (AE): United Nations Development Programme

Date of first submission/ version number:

2019-07-18

Date of current submission/ version number

20190-11-18

PROJECT / PROGRAMME CONCEPT NOTE Template V.2.2

Notes

• The maximum number of pages should not exceed 12 pages, excluding annexes. Proposals exceeding the prescribed length will not be assessed within the indicative service standard time of 30 days.

• As per the Information Disclosure Policy, the concept note, and additional documents provided to the Secretariat can be disclosed unless marked by the Accredited Entity(ies) (or NDAs) as confidential.

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• NDA can also submit the concept note directly with or without an identified accredited entity at this stage. In this case, they can leave blank the section related to the accredited entity. The Secretariat will inform the accredited entity(ies) nominated by the NDA, if any.

• Accredited Entities and/or NDAs are encouraged to submit a Concept Note before making a request for project preparation support from the Project Preparation Facility (PPF).

• Further information on GCF concept note preparation can be found on GCF website Funding Projects Fine Print.

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A. Project/Programme Summary (max. 1 page)

A.1. Project or programme

☒ Project

☐ Programme

A.2. Public or private sector

☒ Public sector

☐ Private sector

A.3. Is the CN submitted in

response to an RFP?

Yes ☐ No ☒

If yes, specify the RFP: ________

A.4. Confidentiality1

☐ Confidential

☒ Not confidential

A.5. Indicate the result areas for the project/programme

Mitigation: Reduced emissions from:

☐ Energy access and power generation

☐ Low emission transport

☐ Buildings, cities and industries and appliances

☐ Forestry and land use

Adaptation: Increased resilience of:

☒ Most vulnerable people and communities

☒ Health and well-being, and food and water security

☐ Infrastructure and built environment

☐ Ecosystem and ecosystem services

A.6. Estimated mitigation impact (tCO2eq over lifespan)

Not applicable

A.7. Estimated adaptation impact (number of direct beneficiaries and % of population)

Direct beneficiaries: approximately 86,000 people (~4% of the country’s total population), including small-scale farmers in the North-East and Central districts of Botswana and their families.

A.8. Indicative total project cost (GCF + co-finance)

Amount: USD 31,250,000

A.9. Indicative GCF funding requested

Amount: USD 15,000,000

A.10. Mark the type of financial instrument requested for the GCF funding

☒ Grant ☐ Reimbursable grant ☐ Guarantees ☐ Equity

☐ Subordinated loan ☐ Senior Loan ☐ Other: specify___________________

A.11. Estimated duration of project/ programme:

7 years A.12. Estimated project/ Programme lifespan

20 years

A.13. Is funding from the Project Preparation Facility requested?2

Yes ☐ No ☒

Other support received ☐ If so,

by who:

A.14. ESS category3

☐ A or I-1

☒ B or I-2

☐ C or I-3

A.15. Is the CN aligned with your accreditation standard?

Yes ☒ No ☐

A.16. Has the CN been shared with the NDA?

Yes ☒ No ☐

A.17. AMA signed (if submitted by AE)

Yes ☒ No ☐

If no, specify the status of AMA negotiations and expected date of signing:

A.18. Is the CN included in the Entity Work Programme?

Yes ☒ No ☐

A.19. Project/Programme rationale, objectives and approach of programme/project (max 100 words)

The impacts of climate change – including increased temperatures and reduced water availability – are negatively affecting the Botswanan agricultural sector. Small-scale farmers4 are particularly vulnerable because of their reliance on rain-fed agriculture and livestock production systems. To address this vulnerability, the project will: i) strengthen institutional capacity to support climate-resilient agriculture; ii) strengthen the technical capacity of small-scale farmers to implement adaptation measures and improve their access to finance through the design and implementation of dedicated climate adaptation loan programmes (funded by state banks); and iii) improve the production and dissemination of climate information services

1 Concept notes (or sections of) not marked as confidential may be published in accordance with the Information Disclosure Policy (Decision B.12/35) and the Review of the Initial Proposal Approval Process (Decision B.17/18). 2 See here for access to project preparation support request template and guidelines 3 Refer to the Fund’s environmental and social safeguards (Decision B.07/02) 4 In this Concept Note, the term ‘small-scale farmers’ will be used to collectively refer to smallholder crop farmers and communal livestock producers who have less than 5 ha of land available for their agricultural production.

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for agricultural decision-making at all levels. The project will be executed by Botswana’s Ministry of Agriculture in co-ordination with UNDP.

B. Project/Programme Information (max. 8 pages)

B.1. Context and baseline (max. 2 pages) Country background 1. Botswana is a landlocked, southern African country with a population of approximately 2 million5. The country’s climate

varies depending on the region, and ranges from arid to semi-arid. Rainfall across the country is highly variable in both space and time, with a mean annual rainfall (MAR) of approximately 475 mm, less than half of the global average6. As a result of low rainfall and high rainfall variability, the country is frequently water stressed and droughts are common across Botswana. These conditions have led to reductions in agricultural productivity7. Both the severity and frequency of droughts are expected to increase across Botswana under future climate scenarios, resulting in significant economic losses8.

Current and future climatic changes 2. Temperature: Botswana is among the group of African countries expected to experience the most intense warming in the

coming decades9. Mean monthly maximum temperatures in the country currently range from 29–35˚C in summer to 20–29˚C in winter. Under future conditions of climate change (RCP 8.5), mean annual temperatures are expected to increase by approximately 2.5°C by 205010. Such increases will have severe negative impacts on crop and livestock production and further reduce water availability throughout the country.

3. Rainfall: Botswana is a water-stressed country, with approximate MAR ranging from 300 mm in the south-west to 600 mm

in the north-east11. Climate change is expected to exacerbate water scarcity in the country by causing a decline in MAR of 3–9% by 2050. This will lead to both a 13% reduction in surface water flows12 and increases in the frequency and severity of droughts in the country. Historical records show that drought years in Botswana are already increasing in frequency and intensity13. For example, the frequency of droughts has increased from once per decade in the late 1900s to once every five years over the past two decades14. This increase in frequency will be exacerbated by an increase in the duration of droughts under future climate conditions. Specifically, global climate models15 (GCMs) predict further significant increases in the duration of droughts for the periods 2046–2065 and 2081–2100, particularly in northern and central Botswana.

Agriculture and climate change vulnerability 4. The agricultural sector in Botswana is extremely vulnerable to the impacts of climate change because it is predominantly

comprised of rain-fed crops and rangeland-based livestock production systems. Although the agricultural sector only contributes approximately 3% to Botswana’s Gross Domestic Product (GDP)16,17, it provides employment for nearly 50% of the population18. The majority of agricultural land is worked by small-scale farmers, most of whom live in the North-East and Central districts. Because the country’s agricultural sector is extremely vulnerable to climate change, and given that the majority of small-scale farmers are concentrated in the North-East and Central districts, these districts have been identified as target areas to receive support for climate-resilient agricultural development through the proposed project. During the development of the Funding Proposal, specific sites within these districts will be selected for the implementation of project interventions. In this Concept Note, the term ‘small-scale farmers’ is used to collectively refer to smallholder crop farmers (of which approximately 52% are women) and communal livestock producers (of which approximately 35% are women)19, who have less than 5 ha of land available for their agricultural production. In Botswana, small-scale farmers manage more than 99% of crop holdings and account for approximately 79% of the land under cultivation. In the North-East district there are approximately 3,300 small-scale crop holdings, with another 1,000 based in the Central Boteti sub-district. This land is predominantly used for subsistence and marginal income generation, with maize and sorghum the most prominent crops. Similarly, small-scale livestock holdings account for approximately 97% of all livestock holdings

5 Government of Botswana. 2011. Population and Housing Census. 6 Government of Botswana. 2011. Second National Communication on Climate Change. 7 Agricultural productivity refers to both livestock and crop productivity. 8 Government of Botswana. 2011. Second National Communication on Climate Change. 9 IPCC. 2014. Part A: Global and Sectoral Aspects. (Contribution of Working Group II to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change). Climate Change 2014: Impacts, Adaptation, and Vulnerability. 1132. 10 Ibid. 11 Ibid. 12 Ibid. 13 ASSAR, Southern Africa Team. 2017. Background Paper on Botswana’s Draft Drought Management Strategy. 14 Byakatonda, J. et al. 2016. Aridity changes and its association with drought severity in Botswana. 15 based on Standard Precipitation Index (SPI) 16 Botswana Country Profile. 2018. Available at: http://www.cbrta.co.za/wp-content/uploads/2018-03-26-Botswana%20Profile%20FINAL.pdf . 17 The livestock sub-sector accounts for more than 80% of the country’s agricultural GDP. 18 Government of Botswana. 2015. Botswana Climate Smart Agriculture Programme, 2015-2025. 19 Pers. Comm. held between Olaotswe Kgosikoma and international consultants in March 2019.

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across the country and make up approximately 90% of the total national herd20,21,22. More specifically, there are nearly 66,000 communal cattle holdings in Botswana; 68% of these holdings have between 1 and 20 cattle per holding, 29% have between 21 and 100 cattle and 4% have more than 100 cattle23. These small-scale farmers are mostly organised into traditional holdings, which are groups of 5 to 10 small-scale farmers who share a water source for the rearing of their animals and/or cultivation of their crops24.

5. Given their limited adaptive capacity (discussed in the Barriers section below) and the disparity in crop yields between

commercial and small-scale farmers – with commercial farmers averaging 250% higher productivity25 – small-scale farmers are particularly vulnerable to the expected impacts of climate change, especially droughts, when compared with commercial farmers26. For example, during the 2015 drought in Botswana, the productivity of small-scale farms was an even smaller fraction of that of commercial farms. Despite small-scale farmers planting almost double the area of sorghum crop than commercial farmers in 2015 (32,211 ha compared with 18,464 ha), commercial farmers were able to produce over three times as much harvest. This equates to over 400% higher productivity (t/ha) for commercial farmers than for small-scale farmers during drought years – a disparity that is 60% higher than average difference. This demonstrates the increased vulnerability of small-holder farmers who do not have access to the necessary equipment and knowledge to cope with drought conditions. This impact was corroborated during stakeholder consultations held in February 2019 when a small-scale farmer indicated that, during a drought year, crop yields decline by approximately 50%, and that under severe drought conditions, entire harvests can be lost27. Considering the dominance of vulnerable, small-scale farmers in the agricultural sector, the projected increase in the intensify and frequency of droughts is expected to result in a 10% decline in overall agricultural output across Botswana by 205028. In addition to the effects of drought climate change is also expected to result in an increase in the frequency of hailstorms, frost and heatwaves, which will have further negative impacts on agricultural production. The causal effects of climate change on agricultural productivity in Botswana are explored in further detail below.

6. Reductions in MAR are expected to impact the viability of rain-fed agriculture in Botswana, both in terms of overall area

available for rain-fed agriculture and yield per hectare. Specifically, by 2050, and in the absence of urgent adaptation measures, the reduction in water availability is expected to result in a decline in cereal crop production of 19%29. Maize and sorghum productivity are expected to be particularly affected, with a decline of approximately 36% and 26%, respectively, predicted under a 3°C warming scenario30. Such declines will have severe negative impacts on the livelihoods of small-scale farmers, as these farmers will need to cope with either decreasing yields, increasing input costs in the attempt to boost productivity, or a combination of the two31. Reduced water availability is also expected to have severe impacts on livestock farming in Botswana. This will disproportionately affect small-scale farmers, who predominantly graze livestock on non-irrigated communal rangelands. Despite reductions in herd sizes, these rangelands have experienced increasing degradation in recent decades as a result of inadequate land-use management practices. This degradation is exacerbated by reduced MAR as a result of climate change32, which leads to reductions in water availability being supplied to these rangelands. This in turn reduces the fertility and water holding capacity of the rangelands, therefore, reducing their use for grazing livestock.

7. The impacts of reduced MAR on crops and rangelands in Botswana will be further exacerbated by increasing

temperatures. Such increases will result in: i) heat stress, which is likely to increase livestock losses33 and reduce the fertility of non-climate-resilient breeds34; ii) increased evapotranspiration, which will reduce water availability throughout the country; and iii) reduced productivity of rain-fed agriculture. Specifically, increases of more than 1.5°C are expected to result in significant losses to major crops, such as maize, sorghum, millet and beans35.

Existing plans, policies and projects in Botswana

20 In Botswana, small-stock, such as sheep and goats, are more likely to be raised by women than men, while the majority of small-scale cattle holdings are owned by men. 21 including cattle sheep and goats 22 Botswana Agriculture Census Report. 2015. 23 There are approximately 2,200 small-scale cattle holdings in the North-East district and a further 1,600 small-scale cattle holdings in the Central Boteti sub-district. 24 Pers. Comm. held in March 2019 between Olaotswe Kgosikoma, international consultants and Muyeye Chambwera, who is a representative from UNDP. 25 FAO 2005. AquaStat - Irrigation in Africa. Available at: http://www.fao.org/nr/water/aquastat/countries_regions/bwa/BWA-CP_eng.pdf 26 Further information on small-scale and commercial farmers in Botswana is presented in the Section 2 of Annex 2: Pre-Feasibility Study. 27 Pers. Comm. between Gianni Lorenzato (international consultant) and a small-scale farmer during stakeholder consultations held in Francistown from 4 to 8 February 2019. Representatives from MoA, UNDP and the private sector were present at these consultations. 28Juana, J.S., et al. 2014. The socio-economic impact of drought in Botswana. International Journal of Environment and Development. 11(1) pp.43-60. 29 Ibid. 30 Chipanshi C., et al. 2003. Vulnerability Assessment of the maize and sorghum crops to climate change in Botswana. 31 Input costs are likely to rise as a result of an increasing need for irrigation and fertiliser. 32 Pers. Comm. November 2018. Focal group discussion during an engagement workshop in Francistown, 29 October to 2 November 2018. 33 Niang I, et al. 2014. Africa Climate Change 2014: Impacts, Adaptation and Vulnerability—Contributions of the Working Group II to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge: Cambridge University Press. pp 1199–265 34 such as the Nguni breeds 35 Nkemelang T., et al. 2018. Temperature and precipitation extremes under current, 1.5 °C and 2.0 °C global warming above pre-industrial levels over Botswana, and implications for climate change vulnerability. Environ. Res. Lett. 13 06501.

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8. The GoB has developed a national policy on agricultural development as well as several other policy/strategic documents that highlight the national priorities and adaptation measures needed to reduce the adverse impacts of climate change on the agricultural sector. These include, the Nationally Determined Contribution (NDC), the Second National Communication (SNC) to the United Nations Framework Convention on Climate Change (UNFCCC)36 and the Botswana Vision 2036. In addition to these strategy documents, several programmes are under development to assist in the adaptation of the agriculture sector in Botswana. These projects are listed below, along with the relevant national plans and policy documents. Further details are provided in Section 5 of Annex 2: Pre-feasibility Study.

• Botswana’s National Policy on Agricultural Development (1991).

• Botswana’s Nationally Determined Contribution (2016).

• Botswana’s Second National Communication to the UNFCCC (2011).

• Climate Smart Agriculture Programme (2015).

• Ecosystem and livelihoods resiliency: climate change risk reduction through ecosystem-based adaptation in Botswana’s communal grazing lands (Conservation International, 2018).

• Integrated Support Programme for Arable Agriculture Development (ISPAAD, 2008). 9. The proposed project will align with the aforementioned national plans, priorities and policies to ensure that the outputs

meet the adaptation needs of the country. Furthermore, the proposed project has been designed to support the objectives of the Concept Note developed by Conservation International (CI) and to ensure that there is complementarity between the two projects without duplication in their respective activities. In particular, the projects will target different regions to maximise the spatial extent of the impact as well as maintaining separate focuses, with the CI proposal focussing on rangeland management and the UNDP proposal focussing on crop agriculture and climate-resilient livestock breeds. The design of the projects will also facilitate collaboration and learning between beneficiaries and the project management units of both projects, along with representatives from farmers associations and local government.

Problem statement 10. The problem that the proposed project will address is that climate change is reducing agricultural productivity in the crop

and livestock sectors in the North-East and Central Boteti regions of Botswana. As described above, this problem is disproportionately affecting small-scale farmers who are more vulnerable to climate change impacts than commercial farmers37. Several barriers exist that limit the capacity of the Government of Botswana (GoB) and the country’s agricultural sector to adopt climate-resilient agricultural technologies and practices. These barriers are described below.

Barriers to the adaptation solution Barrier 1. Limited institutional capacity for cross-sectoral management of climate change impacts 11. Botswana has developed a draft climate change policy and is in the process of producing a National Adaptation Plan

(NAP). Despite the development of these policy instruments, cross-sectoral engagement on climate change-related challenges is still limited by several factors. Firstly, there is limited co-ordination between the Ministry of Agriculture (MoA) and Ministry of Environment, Wildlife and Tourism (MEWT) in decision-making in response to climate change. This limited co-ordination occurs for two main reasons, specifically that: i) different government entities have separate mandates with different priorities; and ii) there is a lack of information on the impacts of climate change on not only the agricultural sector but also other related sectors. Secondly, although farmer organisations are established for beef and small-stock production, these organisations are not fully functional 38 and have limited capacity to implement climate-resilient technologies and practices. This limited coordination leads to: i) a lack of policy coherence on implementing climate change adaptation measures; and ii) limited capacity for climate-responsive planning for short-, medium- and long-term adaptation options.

Barrier 2. Limited capacity of farmers and extension services to access and provide, respectively, information on sustainable land-use management practices and climate-resilient farming techniques for small-scale farms 12. This barrier is a result of an insufficient number of extension officers to provide support to these farmers and limited

capacity of government to coordinate such support. These officers also have limited technical capacity to advise on climate change-related agricultural practices. With respect to horticulture, small-scale farmers currently rely on traditional knowledge and long-standing farming practices. These farmers consequently have limited technical capacity to implement climate-resilient agricultural techniques such as drip irrigation, no-tillage and solar irrigation pumps. These techniques are innovative within the context of Botswana’s agricultural sector and an options analysis will be conducted during the development of the Full Funding Proposal to determine exactly which climate-resilient techniques are appropriate for use amongst small-scale farmers in Botswana.

Barrier 3. Limited technical capacity of government and private sector to provide climate-resilient agricultural inputs to small-scale farmers

36 This programme was developed by the Ministry of Agriculture (MoA) and Ministry of Environment, Wildlife and Tourism (MEWT). 37 The vulnerability of small-scale farmers to climate change is exacerbated by their limited adaptive capacity to identify and transition to alternate livelihoods that are not affected by climate change. 38 Pers. Comm. Stakeholder consultations held between 5 and 8 February 2019.

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13. Currently, the government and private sector in Botswana have limited capacity to support small-scale farmers in the provision of climate-resilient agricultural inputs and training for cereal crop cultivation, horticulture and livestock farming. In both cereal crop production and livestock farming, options for climate-resilient seed varieties and suitable breeds have already been identified by MoA. However, there is insufficient knowledge of the benefits of climate-resilient seeds and livestock breeds amongst private seed producers and livestock breeders, which limits private sector uptake. As a result. climate-resilient seeds and breeds are not being multiplied to the extent required to address the impacts of climate change. This is partly linked to a limited demand for such inputs which creates high risk to private sector to invest in supply.

14. Barrier 4. Limited access to finance for small-scale farmers for investments in climate-resilient technologies, including the

purchase of climate-resilient seeds and livestock breeds. The main lenders to small-scale farmers are two state-owned entities, the National Development Bank (NDB) and the Citizen Entrepreneurial Development Agency (CEDA). The former has 30% of the agricultural loan market, lending for general farm purposes, purchase of equipment and working capital. NDB has lending programs dedicated to small-scale farmers, representing approximately a quarter of its loan book. It does not, however, have dedicated loans for climate adaptation purposes. It also requires additional sources of income (for example a salary from an alternative job) to disburse loans to small-scale farmers, which limits the take-up of loans. CEDA is a relatively new institution that has become more active in lending to small-scale farmers. Conversely, commercial banks primarily serve large farmers.

Barrier 5. Limited access to climate information by government and small-scale farmers for climate-responsive planning and decision making 15. Small-scale farmers tend to rely on their own experience and traditional knowledge passed down from previous

generations when making decisions on planting strategies. Climate change has, however, altered not only temperatures and precipitation profiles in Botswana but also the factors that previously determined daily and seasonal meteorology. These changes are resulting in increased short scale, seasonal, interannual and multi-year variability. The reduced adherence to climate stationarity as a result of climate change has affected the accuracy and applicability of historic experience to current as well as future practices. The dissemination of climate information in Botswana must therefore account for these climate changes and their impact on traditional knowledge. Climate information systems in Botswana are currently constrained by: i) gaps in forecasting accuracy, range and spatial extent; and ii) inadequate communication systems to disseminate climate information that is accessible, understandable and actionable for all recipients. These constraints are predominantly a result of: i) a limited number of weather stations in the target region’s current observation network; ii) limited technical capacity for forecasting and data management in Department of Meteorological Services (DMS); iii) limited involvement of traditional forecasters and sectoral representatives in producing climate advisories; and iv) limited communication between DMS and MoA in the production and dissemination of climate information.

Adaptation solutions for the Botswanan agriculture sector 16. As described above, the vulnerability of small-scale farmers in Botswana to the impacts of drought is compounded by: i)

limited formal knowledge of climate change; ii) limited reach and capacity of extension services; iii) limited access to, and uptake of, climate-resilient agricultural technologies and practices; iv) limited availability of finance, and lack of dedicated loan programs for climate adaptation purposes; v) a lack of access to climate-resilient alternative livelihoods; and vi) limited access to adequate and contextually-appropriate climate information. There is, therefore, an urgent need to strengthen technical and institutional capacity of government agencies, district officers and farmers organisations to implement climate-adaptive practices and build the climate resilience of the most vulnerable groups, such as small-scale farmers. It is also critical to facilitate access by small-scale farmers to NDB and CEDA financing, designing and implementing dedicated climate adaptation loan programs with terms (loan size, rate, maturity, collateral requirements, etc.) compatible with the financial profile of the investment in climate-adaptive practices. Such practices include, for small-scale crop farming: i) implementing conservation agriculture systems39; ii) practising crop diversification; iii) introducing climate-resilient crop varieties; iv) improving the provision of agricultural inputs; v) improving irrigation vi) introducing crop protection measures40; vii) providing improved climate information; and viii) improving climate risk management41. For livestock, priority adaptation measures include: i) providing supplementary feed during drought periods; ii) improving livestock health management to address opportunistic diseases during drought periods; iii) improving livestock mobility in response to climate stressors; iv) introducing climate-resilient livestock breeds; and v) diversifying livestock production systems42. Irrigated horticultural activities have also been identified as a climate-resilient alternative to vulnerable crop and livestock production systems that will improve food security across Botswana and diversify income opportunities for small-scale farmers. The majority of horticulturalists are also small-scale farmers, who account for approximately 90% of horticulture producers in the country.43

B.2. Project/Programme description (max. 3 pages)

39 such as no/low till; crop rotation; intercropping; mulching; contour bunding, ridging; and cover cropping 40 such as Integrated pest management 41 including insurance options 42 including the use of artificial insemination systems 43 Pers. Comm between an international consultant and MoA representative during consultations held from 4 to 8 February 2019.

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17. The proposed project will build the resilience of small-scale agricultural production in the North-East and Central districts of Botswana by: i) strengthening the institutional capacity of the MoA, MEWT, district officers and farmer organisations for climate-responsive planning; ii) providing farmers with access to climate-resilient agricultural inputs, technologies and practices and unlocking dedicated loan finance from NDB and potentially also CEDA; and iii) improving the access of small-scale farmers to adequate climate information systems to inform short-, medium- and long-term planning processes. Both the North-East and Central districts of Botswana were selected for the proposed project because the majority of arable land, as well as 80% of the population, are concentrated in the eastern part of the country44. Nearly 50% of small-scale farmers are situated in these districts, with approximately 2,150 cattle holdings and 3,300 smallholder farms in the North-East region and approximately 1,600 cattle holdings and 1,000 smallholder farms in the Central Boteti region. Given that each cattle holding includes at least five farmers, it is expected that at least 84,000 people (23,000 small-scale farmers in the target districts as well as their immediate family) will directly benefit from these interventions, with an additional 42,000 people in the two target districts benefitting indirectly.45 Moreover, these farmers are strongly dependent on rain-fed agricultural practices to sustain their livelihoods and are, therefore, particularly susceptible to climate change impacts, such as droughts (described in Section B.1). These impacts are expected to increase in the future, with simulations of future drought conditions projecting a significant increase in the duration of droughts in northern and central Botswana for the period 2046–206546.

18. Proposed project interventions have been designed to overcome the main barriers to the implementation of climate-

resilient agriculture identified in Section B.1 and contribute to achieving two GCF Fund-level impacts, namely: ii) A1.0: increased resilience and enhanced livelihoods of the most vulnerable people, communities, and regions; and iii) A2.0: health and well-being, and food and water security. Proposed outputs and indicative activities to be implemented under the project are described below. Further details on the activities and their corresponding sub-activities are provided in Annex 2. GCF resources will be used to finance aspects of every proposed project activity that will be implemented under the project; however, these resources will only be used for climate change-related aspects of project activities. The GCF grant financing will not be used to finance baseline aspects of project activities and no GCF resources will be used for the improving the private sector. All adaptation benefits that will be realised by the private sector will be as a result of their own investment into climate-resilient measures. Public and private sector entities, including MoA, MoFED, NDB, Botswana Agricultural Marketing Board (BAMB), Botswana Meat Commission (BMC) and CEDA, have committed US$16.25 million to finance baseline aspects of project activities. GCF grant and co-financing arrangements for the project outputs and activities described below are presented in Section C.1 of the Concept Note.

Output 1. Institutional capacity for climate-resilient planning improved at the national, district and local levels. 19. Currently, the GoB has limited institutional capacity to respond to climate change. To improve climate-responsive planning

in Botswana, Output 1 will: i) mainstream climate change adaptation into relevant development plans and policy

instruments47; ii) develop climate-resilient agricultural training modules; iii) train district officers and farmer organisations

on how to integrate climate change adaptation into district planning and decision making; and iv) establish/strengthen a knowledge-sharing platform to serve as a repository of information on project activities and climate-resilient agricultural interventions. These activities will promote planning that is: i) cross-sectoral; ii) evidence-based; and iii) participatory, involving small-scale farmers.

20. Activity 1.1. Mainstream climate change adaptation in development plans and policies. Under Activity 1.1, climate change

adaptation will be mainstreamed into national- and district-level development plans and policies to strengthen the cross-sectoral decision-making capacity of GoB on climate change. Small-scale farmers will be engaged in the mainstreaming process through consultation workshops to ensure that planning is participatory and mutually beneficial. Furthermore, an inter-ministerial committee will be established to improve cross-sectoral coordination between MoA, MEWT and other

relevant sectors as well as support the National Committee on Climate Change48 in planning and decision-making. This

committee will receive awareness and training on the impacts of climate change on the agricultural sector to highlight the importance of including the sector in climate-responsive planning under future climate change conditions. Particular focus will be given to promoting cross-sectoral alignment of priorities. Existing development plans and policies will also be reviewed with the participation of relevant government representatives to determine barriers and opportunities regarding the uptake of climate-resilient agriculture.

21. Activity 1.2. Develop climate-resilient agriculture training modules for use by relevant technical staff from the MoA. This

activity will increase the technical capacity of selected government staff from the MoA on climate-resilient agricultural technologies and practices. This will be done through the development and implementation of training modules for selected technical staff within the MoA. These modules will be maintained and updated by MoA to ensure long-term and sustainable

44 The Central district is on the eastern side of Botswana. 45 The method for calculating project beneficiaries is presented in a footnote in Section B.3 of this Concept Note. 46 ASSAR, Southern Africa Team. 2017. Background Paper on Botswana’s Draft Drought Management Strategy. 47 Plans and policies that are likely to be relevant to Output 1.1 include the: i) Tribal Grazing Land Policy (1975); ii) National Agricultural Policy (1991); iii) National Water Policy (2012); iv) National Policy on Gender and Development (2015); iv) The Eleventh National Development Plan (2017-2023). 48 The National Climate Change Committee was established in 1995 as an advisory body to GoB. Its mandate is to: ensure that international climate change obligations are met; advise on national climate change matters; and oversee the implementation of climate change adaptation and mitigation measures.

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capacity development within the ministry. Technical staff in the MoA will also be capacitated to train district officers and farmer organisations on the implementation of climate-resilient agricultural technologies and practices. In so doing, this activity will create an enabling environment for long-term capacity building through the establishment of a ‘training-of-trainers’ approach for technical staff in the MoA as well as district officers and farmer organisations.

22. Activity 1.3. Train district officers and farmer organisations on incorporating climate change adaptation in development

planning. District governments are responsible for district-level development planning that identifies local needs and priorities to be considered in national budgeting. This budgeting process does not currently incorporate climate change adaptation. Additionally, while the district planning process is participatory, those involved have limited knowledge of climate change impacts and adaptation responses. To overcome these shortfalls, training will be provided to district officers, extension officers and relevant stakeholders involved in the district planning process. Furthermore, a decentralised training and management structure will be established, which will strengthen the capacity of farmer organisations to provide information and training to their constituents on climate-resilient agricultural technologies and practices. These organisations will provide a direct link between district officers, extension officers and small-scale farmers, while also creating opportunities for farmer-to-farmer peer learning that is sustainable beyond the project lifetime. Innovative Information and Communications Technology (ICT) solutions, such as mobile apps, USSD messaging and SMS broadcasting, will be used to promote these linkages through two-way communication within a farmer organisation, as well as between the organisations and district officers.

23. Activity 1.4. Establish/strengthen a knowledge-sharing platform to facilitate information sharing on climate-resilient

agricultural techniques and practices. The MoA and MEWT have been identified as potential host institutions for a knowledge-sharing platform to serve as a repository of information on project activities and climate-resilient agricultural interventions. The platform will be designed to be accessible to national and international decision-makers, as well as to local small-scale farmers. This will include the development of a decision-support tool that will provide practical guidelines for the implementation of climate-resilient agricultural practices. The improved access to information will lead to strengthened cross-sectoral planning of decision-makers and improved knowledge management around climate-resilient agricultural practices. During the Funding Proposal development phase, it will be determined whether a suitable platform already exists within either MoA or MEWT. In the event that the selected institution already manages a suitable platform, this platform will be expanded to include information on climate-resilient agricultural technologies and practices. If such a platform does not already exist, a suitable knowledge-sharing platform will be established to serve as a repository of information on project activities and climate-resilient agricultural interventions.

Output 2: Climate-resilient agricultural practices established and financed in target regions 24. This output will increase the resilience of small-scale farmers to climate change by promoting climate-resilient crop

varieties in place of traditional varieties, multiplying climate-resilient livestock breeds and improving small-scale farmers’ access to these agricultural inputs. Horticulture will also be promoted as a form of agricultural diversification under this activity. Linkages will be created between this output and Output 1 through the training-of-trainers model for technical staff to ensure that knowledge on appropriate climate-resilient technologies is incorporated into national- and district-level planning and decision-making. Critically, this output will unlock dedicated finance for climate-adaptive investments, supporting the design and implementation of dedicated loan programs by NDB and potentially CEDA. This will create a paradigm shift towards the use of climate-resilient technologies and practices in agricultural production and planning across Botswana.

25. Activity 2.1. Support small-scale farmers to adopt climate-resilient crops and horticulture practices. The GoB does not

have sufficient technical capacity or understanding of the product novelty to multiply suitable climate-resilient seeds for distribution to small-scale farmers. Currently, seeds (which are not primarily climate-resilient) are provided to small-scale farmers under the Integrated Support Programme for Arable Agricultural Development (ISPAAD). These seeds are produced by GoB’s Seed Multiplication Unit (SMU) and distributed by ISPAAD and private companies, such as SEEDCO. Private companies in Botswana that do engage in seed multiplication currently do not produce climate-resilient seeds; instead, they are only involved in the multiplication of high-yield seeds. This is largely a result of limited knowledge on the negative impacts of climate change on the existing seed varieties in Botswana and the additional costs involved in the multiplication of new seed varieties. This problem is exacerbated by the hesitance of farmers to adopt new seed varieties, opting instead to continue using familiar varieties that have been tried and tested but may not be suited to future climate conditions. To address this gap, the proposed project will strengthen the capacity of the SMU as well as private sector producers to multiply and distribute climate-resilient seeds. Private sector entities were engaged during the development of the proposed project, and expressed interest in contributing to the production and multiplication of climate-resilient seeds. Existing government agricultural programmes — such as ISPAAD — will also be expanded to distribute the climate-resilient seeds produced by the SMU, as well as private sector entities. In addition to supplying climate-resilient seeds, this activity will promote private sector involvement in building the capacity of researchers and farmers to produce and effectively use these seeds.

26. While the primary identified climate change threat to agriculture in Botswana is drought, other climate threats, such as

hailstorms, frost and heatwaves, are also predicted to increase in frequency. To simultaneously reduce small-scale farmers’ exposure to both drought and other climate threats, activities under this output will also promote agricultural

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diversification into market-appropriate horticulture. Crops grown under horticulture are generally: i) irrigated rather than rain-fed; ii) higher-value than rain-fed crops; and iii) less exposed to non-drought climate impacts, such as hailstorms, because of the use of protective structures. The project will support this transition by: i) training farmers on horticultural techniques; ii) providing technical support to establish linkages with financial institutions that have the capacity to invest in horticultural operations.

27. Activity 2.2. Support small-scale farmers to adopt climate-resilient livestock breeds. Climate-resilient livestock breeds are

not yet well established in Botswana. Most farmers currently have limited access to such breeds, despite the presence of breeds with favourable characteristics in the country49. This is because the GoB and private sector have limited technical and institutional capacity to implement innovative technologies and techniques to increase the breeding stock of climate-resilient breeds. Activity 2.2 will support the GoB to increase small-scale farmers’ access to climate-resilient livestock breeds for both beef cattle and small-stock. The increased access to climate-resilient small-stock breeds will be particularly beneficial to women who are predominantly engages in small-stock farming. The Department of Agricultural Research (DAR), in collaboration with private companies, will be responsible for facilitating the multiplication of climate-resilient breeds through embryo transfers. This will take place at Artificial Insemination Centres (AICs)50 in the target regions. These breeds will then be disseminated to communal livestock producers using mobile AICs 51 . Existing livestock farmer organisations (developed or strengthened under Activity 1.1) will have access to climate-resilient breeds through the existing AICs. These organisations will also be provided with training and guidelines on maintaining the genetic purity of these breeds. GCF finance will cover the additional costs of multiplying climate-resilient livestock breeds – focussing on technical assistance – which will unlock significant co-finance from the private sector, local development banks and government agencies.

28. Activity 2.3. Developed value chains to support climate-resilient agricultural production. The climate-resilient seed varieties and livestock breeds that will be adopted under Activity 2.1 will result in shifts in the production of major crops and livestock breeds towards a climate-resilient pathway. In addition, training under Activity 1.1 and improved provision of climate information under Activity 3.1 will increase the uptake of climate-resilient agricultural technologies and practices, which will alleviate the negative impacts of climate change on agricultural productivity. However, to ensure the long-term sustainability of these activities, it is necessary to elicit a paradigm shift across the agricultural value chain (from production, processing to marketing of agricultural products) to create markets for climate-responsive agricultural outputs. During the development of the full feasibility study, existing beef, sorghum and horticultural value chains will be analysed to determine a baseline as to: i) how the value chain is likely to respond to climate change impacts; and ii) how project activities are likely to impact the value chain. Based on these analyses: i) recommendations for climate-proofing Botswana’s beef, sorghum and horticultural value chains will be made, including ensuring reliable supply of agricultural inputs and strengthening markets for climate-resilient agricultural produce; ii) modifications to value chains within the project areas will be implemented, making them more efficient and responsive to changes in the climate; and iii) market linkages at local, national and regional levels will be developed. In so doing, activities under Activity 2.2 will increase small-scale farmers’ access to adequate markets for their climate-resilient products while also being able to source suitable agricultural inputs.

29. Activity 2.4. Design a loan programme to unlock additional finance for climate-resilient agricultural practices.

Technical assistance provided through Activities 2.1–2.3 will stimulate supply and demand in the agricultural sector for climate-resilient inputs and practices. The uptake of such practices is, however, constrained by limited access to finance for small-scale farmers. To overcome this barrier, the proposed project will support NDB and, potentially, CEDA in the design of a climate adaptation loan programme targeting small-scale farmers and private-sector agricultural suppliers. GCF funds will be used for technical assistance to NDB/CEDA for the design of loan products with terms (loan size, rate, maturity, etc) compatible with the financial profile of the climate adaptation investments financed, as well as capacity building of NDB/CEDA loan officers in charge of disbursing and managing such loans. An implementation framework will be developed to ensure effective uptake and maximise impact of the loan programmes. The proposed loan programmes will target, on one hand, the small-scale farmers and livestock producers who need to invest in climate-adaptive practices and, on the other, the private sector companies that need to invest in the production and distribution of climate-resilient agricultural inputs – including horticultural equipment, climate-resilient seed varieties and resilient livestock breeds. Such loan programmes will be funded from existing sources of NDB/CEDA, who will commit to co-finance the project. NDB, in particular, has already expressed the interest to participate. Discussions with CEDA will be initiated during the funding proposal development.

Output 3. Climate information systems strengthened to improve the collection, interpretation, production and dissemination of climate advisories 30. Currently, small-scale farmers in Botswana have limited access to climate information services (CISs) and limited

knowledge on how to use these services. This is because the existing network of Automated Weather Stations (AWS) in

49 The Department of Agricultural Research (DAR) has developed a composite drought-resistant breed known locally as Musi, although this breed has not been widely disseminated amongst small-scale farmers in Botswana. 50 There is one AIC (Morupule) in the North-East district and two AICs (Makoba and Makalamabedi) in the Central Boteti sub-district. 51 Mobile AICs will enable artificial insemination to be done on location as opposed to at a centralised location. Climate-resilient embryos will be generated at the AICs and then distributed to communal livestock producers, where the embryos will be implanted into the livestock herds.

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Botswana is insufficient (in terms of range and capacity to produce high quality downscaled climate information) to provide short-, medium- and long-term forecasts that will improve climate-responsive planning amongst small-scale farmers in the North-East and Central districts of Botswana. The impacts of climate change are expected to increase the spatial and temporal variability of climate systems, creating a need for more extensive, fine-scale coverage of CISs. This increased variability has not been accounted for by the Department of Meteorological Services (DMS) and, as a result, existing plans to expand the AWS network are predicted to be insufficient under future climate change conditions52. To address the limitations of the existing plans, additional AWSs will be installed to increase the coverage and improve the accuracy of climate data under future conditions of climate change. Technical staff at DMS will then be trained on effective methods for collecting, interpreting, producing and disseminating fine-scaled climate information to small-scale farmers using the data generated by the AWS. These systems will be community-based and needs driven, incorporating the knowledge of traditional forecasters in the production of improved climate advisories. This will promote the reliability and uptake of advisories amongst small-scale farmers therefore contributing to improved agricultural planning under future conditions of climate change.

31. Activity 3.1. Train technical staff to improve technical capacity of staff at DMS to improve the collection, interpretation,

production and dissemination of climate advisories. To ensure the optimal operation of forecasting and EWSs, technical staff at the DMS will be trained on: i) climate data acquisition, warehousing and management; ii) producing downscaled tactical, seasonal and decadal forecasts for agricultural use; and iii) producing appropriate and accessible advisories for use by farmers and for informing the EWS. Training modules will also be developed for long-term training within DMS. In addition, existing communication media will be evaluated to identify how climate information will be reliably disseminated to MoA, district officers and small-scale farmers. To improve the accessibility of existing advisories, the proposed project will integrate traditional forecasters into climate advisories. These forecasters are often trusted individuals in local communities and their involvement is expected to increase the trust that community members place in advisories.

32. Activity 3.2. Expand and improve the climate information systems observation network in target regions. This activity will

respond to the additional need for increased climate information coverage by providing five additional AWS – two in the North-East district and three in the Central district53 – to enable the early detection of extreme climatic events. The AWS will be integrated into the existing national network and DMS will be responsible for their operation and maintenance. Data generated by these stations will be housed in the DMS database and used for weather and climate monitoring. Early warning systems (EWS) will be augmented through incorporation of additional climate information generated through the project. This will allow for improved short-, medium- and long-term planning for small-scale farmers under future conditions of climate change.

GCF resources will resources will pay for Outputs 1 and 3 in whole, while under Output 2, GCF resources will be deployed towards technical support to the transfer, adoption and on-farm implementation of climate-resilient technologies to farmers as well as support to the multiplication of crop and livestock varieties by the Seed Multiplication Unit. It will also support access to market information by smallholder farmers. Table 1. Identified project risks and mitigation measures

Risk factor Probability Impact Mitigation measure(s)

Changes in market conditions negatively affect project activities

Low Medium • Promote collective market approaches and vertical/horizontal linkages within the value chain.

• Include market information in advisories/communications to small-scale farmers.

• Undertake on-going monitoring (quarterly) with the ability to react/intervene on changing environments.

Inadequate coordination at a national level in the implementation of the project

Medium Medium • The implementation arrangements for the project are presented below this table.

• Proposed project interventions were developed in a participatory way with relevant project stakeholders and extensive stakeholder consultations will be held during the implementation phase to ensure alignment between the project and national priorities and local needs.

Low small-scale farmer uptake of technologies and products

Medium Medium • Develop and implement a stakeholder engagement plan from the beginning of the project.

• Conduct continuous outreach programmes and stakeholder engagement to promote technologies, products and climate information services.

• Provide financial support mechanisms for the uptake of technologies and products.

• Design user-friendly, accessible products and climate information packages.

Risks of financial misconduct

Low Low/ Medium

• Train PMU on UNDP project management standards, including fraud prevention.

• Contract a financial officer as part of the PMU.

• Conduct regular independent audits.

Environmental and social risks

Medium Low • Prepare and implement a social and environmental management framework/plan.

52 There is a plan that has been developed by DMS to install one AWS in the North-East district and one in the Central Boteti sub-district. 53 The specific location of AWSs will be determined during the development of the full Feasibility Study on a needs basis.

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Project implementation arrangements 33. The MoA will be the Executing Entity (EE) for the project and coordinate with United Nations Development Programme

(UNDP), the Accredited Entity (AE), to ensure the effective and efficient implementation of project activities. All operating policies and procedures will adhere to UNDP and GCF guidelines. During implementation, the EE will be required to comply with UNDP’s rules, policies and procedures on financial management and procurement.

34. Accredited Entity. UNDP, which will serve as the AE for the proposed project, is committed to supporting vulnerable

countries address climate change and disaster resilience. This commitment is shown in three global agreements, namely the: i) Paris Agreement on Climate Change; ii) Sendai Framework on Disaster Risk Reduction; and iii) 2030 Agenda for Sustainable Development. UNDP works with vulnerable countries to: i) enhance adaptation practices; ii) build climate change resilience; and iii) reduce greenhouse gas emissions. Other major areas of support provided by UNDP include inter alia enhancing access to clean energy and biodiversity conservation. This support is aimed at assisting vulnerable countries in transitioning towards low-emission, climate-resilient sustainable development.

35. UNDP will be responsible for overseeing the implementation of the project in coordination with the Project Steering

Committee (PSC) and Project Management Unit (PMU) as well as managing the disbursement of funds for the relevant project activities according to the required fiduciary standards. In addition, UNDP will: i) coordinate the execution of the project in line with UNDP and GCF rules, policies and requirements; ii) participate in the PSC and ensure that the proposed project’s activities align with national priorities; and iii) oversee procurement of staff. Contractual agreements with implementing partners, if any, and for provision of goods and services will be reached following procurement rules of the AE and the GoB.

36. Project Steering Committee (PSC). A PSC, chaired by the Principal Secretary responsible for agriculture, will be

established to: i) provide project oversight and guidance to the PMU regarding the execution of all project activities; ii) review progress and resolve any implementation challenges; and iii) ensure inter-agency coordination during the implementation phase. This committee will comprise representatives from: i) UNDP; ii) MoA; iii) the Ministry of Finance and Development Planning; iv) MEWT; v) the umbrella national private sector organization; and vi) the umbrella national non-governmental organizations association.

37. Project Management Unit (PMU). The Ministry of Agriculture (MoA) will host the PMU and ensure coordination with the

AE and EE as well as other project stakeholders and implementing partners, such as the DMS. The PMU will be responsible for: i) developing operational plans for project implementation; ii) preparing annual work plans; iii) ensuring that deliverables are produced according to schedule; iv) contracting service providers; and v) overseeing the monitoring and evaluation of project activities. A Technical Advisory Committee (TAC) will also be established to provide technical inputs to the PSC on project design and advise the PMU during project implementation.

B.3. Expected project results aligned with the GCF investment criteria (max. 3 pages)

Impact potential 38. The proposed project is expected to confer climate resilience benefits54 to ~84,000 people (~23,000 small-scale farmers

as well as their immediate family) in the North-East and Central districts of Botswana55. Women in Botswana are largely associated with smallholder crop and horticultural production, while men are mostly involved in small-scale cattle production. The impacts of climate change are therefore likely to affect women and men differently and will be determined by: i) the type of agricultural activities that both women and men are involved in; ii) the differentiated access to climate information and resources (such as land and water) between women and men; and iii) existing social norms.56 To address the differential impacts of climate change on women and men in Botswana, project interventions have been designed in such a way that approximately 35% of communal livestock farmers and 52% of smallholder crop farmers that will benefit from increased knowledge on climate-resilient agricultural techniques and increased access to climate-resilient agricultural inputs are women. Small-scale farmers are amongst the most vulnerable people in Botswana to the impacts of climate change as a result of their reliance on climate-sensitive livelihoods and limited adaptive capacity. Project activities will increase the climate resilience of small-scale farmers by: i) increasing their capacity to implement climate-resilient agricultural technologies and practices; ii) providing them with access to suitable climate-resilient agricultural inputs; and iii) strengthening their access to relevant climate information for climate-responsive planning. By targeting smallholder farmers, the project will secure the livelihoods of the most vulnerable people, contributing to GCF Fund-level Impact 1.0.

54 Such as improved technical and institutional capacity of national and local decision-makers for climate responsive planning as well as improved access of small-scale farmers to climate-resilient agricultural inputs. 55 Project beneficiaries were calculated as follows: the total number of small-scale cattle holdings in the target districts was multiplied by 5 (which is the minimum number of individual farmers per holding). This number was then added to the total number of crop and horticulture producers in the target districts. Lastly, the total number of small-scale farmers in each target district was multiplied by that target district’s average household size as presented in the Botswana Demographic Survey Report (2017). This was done because the direct benefits provided to small-scale farmers under the project will also directly benefit the immediate family of each of those farmers. For the North-East district, the average household size is 3.5 people per household, while the average household size of the Central Boteti district is 3.8 people per household. Indirect project beneficiaries include the remainder of the populations of the North East district and Central Boteti sub-district. Small-scale farmers, as well as their immediate family members were excluded from the indirect beneficiary calculation to ensure beneficiaries were not double counted. 56 Further details on the vulnerability of women and men in Botswana as well as an action plan for addressing these vulnerabilities are presented in the Gender Assessment and Action Plan.

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Similarly, by countering the impact of climate change on agricultural production, the project will contribute to ensuring food security in Botswana, contributing to GCF Fund-level Impact 2.0.

Paradigm shift 39. Replication potential: The proposed project has been designed to be readily replicable throughout the country and region.

For example, the development of a loan programme will unlock private sector investment in the multiplication of climate-resilient seed varieties and livestock breeds, which is expected to: i) strengthen project sustainability (Section C.3); and ii) promote the broader uptake of project interventions. Equally, the ISPAAD program will change its orientation towards climate smart and climate-resilient technologies and crop and livestock varieties. Moreover, project activities that will strengthen the capacity of small-scale farmers to implement climate-resilient crop and livestock agricultural practices will be replicable throughout Botswana and across southern Africa. Such regional replication will be particularly beneficial for Southern Africa Development Community (SADC) countries such as Zimbabwe that are currently integrating climate change considerations into agricultural activities.

40. Innovation: The project design focuses on the use of several innovative approaches to climate-proof existing agricultural

initiatives in Botswana. These approaches have drawn from an analysis of baseline investments (see Section 5 of Annex 2 – Pre-feasibility Study for details) which identified best practices, lessons learned and gaps in past indicatives. Firstly, using farmer organisations in conjunction with novel ICT to promote decentralised training and information-sharing is a new approach to the country, which is expected to improve climate-responsive planning and decision making. Secondly, innovative approaches proven internationally – such as embryo transfer and mobile AICs – will be implemented to multiply climate-resilient livestock breeds. Thirdly, agricultural landscape management will be improved through a novel approach that will enhance SLM practices and amalgamation of existing livestock syndicates and consequently improving the health and integrity of the rangelands. Lastly, the use of traditional forecasters in the provision of climate advisories is an innovative approach being implemented in other African countries that is expected to improve the end-user uptake of climate information in Botswana.

41. Knowledge and learning: All outputs under the proposed project will rely on the improved co-generation, sharing and

consumption of knowledge and knowledge products. This will include building the capacity of MoA, district officers and farmer organisations to improve the packaging and dissemination of new knowledge. In particular, the strengthening of farmer organisations will enable knowledge-sharing amongst small-scale farmers as well as between farmers and district officers. This will be supported by the knowledge-sharing platform that will be designed to be accessible to small-scale farmers, who will be trained on how to use the platform. Small-scale farmers will also benefit from improved market information and strengthened value chains related to climate-resilient agricultural technologies, while communal livestock producers are expected to gain improved knowledge on rangeland management. Lastly, improved advisories are expected to contribute significantly to the knowledge of decision-makers and small-scale farmers on future climate impacts and adaptation options.

42. Contribution to an enabling environment: The proposed project will create an enabling policy environment by reviewing

existing policies and mainstreaming climate change adaptation into relevant policies and development plans, including district development planning. This will include improving policy coherence and strengthening the cross-sectoral coordination and decision-making between ministries for climate-responsive planning. In addition, the project will increase private sector involvement in climate-proofing agriculture by promoting private sector investment in the production and distribution of climate-resilient seed varieties and livestock breeds and establishing climate-resilient value chains. Private sector involvement will be sought to create an efficient market environment for climate-resilient agricultural and food production systems. The NDB/CEDA climate adaptation loan programmes will also become the long-term template for financing of investments in the field by both small-scale farmers and private sector suppliers of climate-adaptive inputs and equipment.

Sustainable Development Potential 43. The activities under the project are expected to generate a number of sustainable development co-benefits. Firstly, the

adoption of climate-resilient technologies and practices is expected to protect farmer household incomes from significant declines when a drought occurs. This will impact small-scale farmers in particular, as they are expected to benefit from increased yields and improved market conditions. Any such increase, however, will be from a very low base: small-scale farmers earn subsistence income and the project interventions, while protecting such incomes, will not generate any significant financial windfall for beneficiaries. Secondly, implementing horticulture as a climate-resilient farming alternative is expected to generate twin benefits of protecting and diversifying farmer incomes while reducing farmer exposure to climate change impacts such as droughts and hailstorms. Such reduction in exposure and vulnerability will be a key benefit of the project. Finally, all project activities are expected to have environmental benefits, as improved agricultural landscape management and uptake of climate resilient technologies and practices are expected to: i) reduce the need for environmentally harmful agricultural inputs; and ii) improve crop- and rangeland ecosystem health through improved management techniques. Specifically, better control and management of alien invasive species is expected to: i) generate marked biodiversity benefits; and ii) provide financial benefits as a result of improved productivity and biodiversity management.

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44. Activities under the project will be implemented in a gender-responsive and inclusive manner. During the development of the Funding Proposal, a detailed gender analysis will be undertaken, and a gender action plan (GAP) developed to ensure that the project design is gender responsive. Indicative opportunities for gender mainstreaming have been identified under activities involving horticulture and small-stock production.

Needs of Recipients 45. While Botswana is a middle-income country, it is characterised by high levels of poverty (16%) and unemployment (18%)57.

Botswana’s GINI index was approximately 60% in 2009, placing the country in the top five most unequal countries in the world. The agricultural sector58 contributes relatively little towards the national GDP, however, the sector is the country’s largest source of employment. This sector is extremely exposed to the predicted impacts of climate change, particularly the increasing frequency and severity of droughts. Small-scale farmers are particularly vulnerable because of a strong reliance on rain-fed agriculture. These small-scale farmers have: i) limited knowledge of climate change; ii) limited access to extension services; iii) limited access to, and uptake of, climate-resilient agricultural technologies and practices; iv) limited access to finance; v) difficulty in accessing markets59; vi) a lack of access to climate-resilient alternative livelihoods; and vii) limited access to adequate climate information. The GoB’s National Development Bank (NBD) and Citizen Entrepreneurial Development Agency (CEDA) and, to a lesser extent, commercial banks such as Barclays and Stanbic are the main sources of finance for the agricultural sector. The latter serve primarily large farmers, at rates in the teens and with strict collateral requirements. NBD has lending programs for small farmers and small livestock producers but requires additional sources of income (e.g. salary from an alternative job) to disburse a loans; as a result, few small-scale farmers take advantage of these loans.60 Neither NDB nor CEDA have dedicated loan programmes for climate-adaptive investments of small-scale farmers and private sector providers of related inputs and equipment. The proposed project will benefit the most vulnerable farming communities by addressing the abovementioned needs. In particular, small-scale farmers will be supported to adopt climate-resilient agricultural practices, while markets and value chains will be strengthened/created to support the new approaches. Furthermore, accessible credit lines will be established through development banks to improve access to finance for upscaling adaptive practices. Farmers will also be provided with actionable climate advisories and improved extension services to improve their awareness of climate change and their knowledge of appropriate adaptation options and practices.

Country ownership 46. The proposed project is aligned to the country’s national development priorities as espoused in the key policy and strategic

documents including Botswana Vision 2036, the Eleventh National Development Plan (NDP11), the National Agricultural Policy (NAP), the Climate Smart Agriculture (CSA) Programme and the NDC. These policies are complemented and underpinned by: i) the African Union’s Agenda 2063; ii) the African Union’s Malabo Declaration on Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods; iii) Agenda 2030 on Sustainable Development and its associated SDGs; and iv) the Paris Agreement on Climate Change. In addition, the project was designed using a consultative approach with multiple stakeholders, as described in Section B.4. The EE of the project, MoA, has a track record of implementing agricultural projects throughout Botswana, including ISPAAD.

Cost-effectiveness and efficiency 47. Wherever possible, cost-effective options for implementing the recommended adaptation interventions will be used. For

example, climate-resilient seed varieties developed under the project will be multiplied by both the SMU and private sector companies, such as SEEDCO, and distributed to small-scale farmers throughout Botswana. This distribution will be done through existing government-funded programmes such as ISPAAD, which will be strengthened and expanded to facilitate this process. GCF resources will, therefore, only be used to finance the incremental cost of developing climate-resilient seed varieties, while the multiplication and distribution of these seeds will be undertaken through existing programmes and networks. This process will reduce the overall project costs while ensuring that maximum benefits are delivered to the project beneficiaries. To examine the economic soundness of this project, a full economic analysis of the projects will be carried out during Full Proposal development in accordance with the Guidelines for the Economic Analysis of Projects of United Nations Development Program (UNDP 2015). This assessment will examine the efficiency and effectiveness of the proposed interventions against the other alternatives, including large-scale irrigation options.

B.4. Engagement among the NDA, AE, and/or other relevant stakeholders in the country (max ½ page)

48. This Concept Note was developed using a participatory, country-led process. In total, four workshops were held with relevant stakeholders, which included representatives of the: i) Ministry of Agriculture (EE); ii) Ministry of Finance and Development planning (NDA); iii) Department of Meteorological Services; iv) UNDP (AE); and v) private sector and small-scale farmers. An inception workshop was held in Gaborone, 29-30 May 2018 to engage stakeholders. On 13-17 August, a co-creation workshop was held in Maun with relevant stakeholders, followed by an engagement workshop, which was held between the AE and representatives of key stakeholder institutions from 29 October to 2 November 2018 in Francistown. Lastly, consultations were held from 4 to 8 February 2019 with the relevant project stakeholders as well as representatives from SEEDCO, BAMB and the National Development Bank. During these consultations, the outline design

57 World Bank. 2018. Botswana: Overview 58 Further details on the agricultural sector are presented in Section B.1. 59 Although such markets do exist, small-scale farmers often lack the capacity to get their products to the markets 60 Approximately 1/4 of NDB’s loan book is to small-scale farmers.

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of the project was presented to ensure alignment between the project and the national priorities and local needs. The NDA contributed significantly to these stakeholder engagements, particularly through securing potential co-financers to support the GCF grant request and development of the proposed project.

C. Indicative Financing/Cost Information (max. 3 pages)

C.1. Financing by components (max ½ page)

Outputs Indicative cost

(USD)

GCF financing Co-financing

Amount

(USD)

Financial Instrume

nt

Amount

(USD)

Financial Instrument

Name of Institutions

1. Institutional capacity for climate-resilient planning improved at the national, district and local levels.

1,500,000 750,000 Grant 750,000 Grant MoFED, MoA

2. Climate-resilient agricultural practices established in target regions

23,000,000 10,500,000 Grant 8,000,000 Loan NDB, CEDA

4,500,000 Grant BAMB, BMC,

MoFED, MoA

3. Climate information systems strengthened to improve the collection, interpretation, production and dissemination of climate advisories

6,000,000 3,000,000 Grant 3,000,000 Grant MoFED, MoA

Sub-Total 30,500,000 14,250,000 16,250,000

PMC 750,000 750,000

Indicative total cost (USD) 31,250,000 15,000,000 16,250,000

C.2. Justification of GCF funding request (max. 1 page)

49. The proposed project will facilitate a paradigm shift that will climate-proof Botswana’s agricultural sector, specifically benefitting small-scale farmers in the North-East and Central districts of Botswana who are amongst the most vulnerable people in the country to climate change impacts. Existing government programmes, such as ISPAAD, will be expanded on – including through the provision of technical assistance for the provision of climate-resilient agricultural inputs – to confer climate resilience benefits to beneficiaries. The GoB is already funding these programmes, which provide agricultural inputs and extension services to all small-scale farmers. However, while some existing programmes support climate change adaptation, additional investment is required for these programmes and interventions to be effective.

50. GCF grant funding is consequently being sought specifically to build the climate-resilience of small-scale farmers in

Botswana. Co-financing will be mobilised to fund outputs and activities that address pending baseline barriers and complement the GCF grant. Discussions with potential sources of co-finance have been initiated, including:

• Government financing. The GoB is already financing baseline agricultural projects and programmes and has indicated that it is committed to co-financing the project. The total amount of co-financing that the GoB is able to provide will be confirmed during the development of the Funding Proposal61. The government’s willingness to provide co-financing for the project represents an additional, significant commitment from GoB.

• Loan financing from NDB and, potentially, CEDA. NDB has expressed an interest to co-finance part of the small-scale farmers’ investments into climate-resilient farming. Climate-resilient investments are consistent with NDB’s mandate and objective to promote food security and would contribute to increase the resilience and creditworthiness of NDB’s loan book. Dedicated loan programmes will be established with technical assistance and capacity building funded by the GCF grant. NDB will fund such loan programmes from existing sources. A similar arrangement will be discussed with CEDA.

• Financing from GoB’s agricultural agencies BAMB and BMC. BAMB and BMC are significant counterparts in the crop and meat value chains, as state buyers of such commodities operating in parallel to private sector buyers. Discussions were held with regard to their potential engagement in the project, in particular the development of sustainable value chains for climate-resilient crops and livestock.

• Private sector financing. Wherever possible, the project will involve the private sector in activities such as seed and climate-resilient livestock breed multiplication. The private sector, including organisations such as SEEDCO and farmers themselves, has been engaged in the development of the proposed project. Further consultations regarding the private sector’s role in implementing the project are currently being undertaken and will be confirmed during the development of the Funding Proposal.

51. A GCF grant is consequently required to: i) address the urgent adaptation needs in Botswana’s agriculture sector; and ii)

lower the perceived risk and increase access to loans for private sector investors and actors to contribute towards climate-resilient development. Investments made by the GCF will build on existing agricultural projects and programmes and will leverage co-finance from the sources mentioned above. All GCF financing will benefit primarily small-scale farmers who

61 Indicative values are presented in Section C.1

PROJECT / PROGRAMME CONCEPT NOTE Template V.2.2 GREEN CLIMATE FUND | PAGE 14 OF 13

are amongst the most vulnerable people to climate change in Botswana. Any impact on farm yields resulting from the proposed project interventions will mitigate losses that would otherwise occur during droughts. The project is therefore not expected to generate an excessive financial windfall for beneficiaries, but rather protect and complement low levels of income for small-scale farmers in the target districts. This, coupled with the co-finance mobilized (some of which will take the form of loans), supports the need for a GCF grant as appropriate level of concessionality.

C.3. Sustainability and replicability of the project (exit strategy) (max. 1 page)

52. The project has been designed around the principles of sustainability and replicability. Firstly, all project outputs will build upon existing government projects and programmes. The project will not create new institutions, entities or procedures that would require external funding beyond project implementation. Secondly, all outputs will strengthen the capacity of government and small-scale farmers to adapt to the impacts of climate change. This capacity will be maintained in the long-term through: i) the establishment of training modules and by training relevant government staff on climate-resilient technologies and practices through a ToT approach; ii) catalysing private sector to develop business models appropriate for the small-scale farmers, and iii) using ICT to facilitate communication and broader access to information. Capacity will be further maintained through the strengthening of knowledge generation and sharing, including the development of vertical and horizontal linkages between farmers and government. This strengthening will sustainably increase the overall capacity of small-scale farmers for climate-responsive planning and the implementation of adaptation measures. Thirdly, the climate-resilient agricultural technologies and practices promoted through the project will mitigate the reduction in farm yields and revenues that would otherwise occur as droughts increase in frequency and severity. This project will have positive impacts on the livelihoods of small-scale farmers and act as a powerful incentive to promote the continuous adoption of climate-resilient agriculture beyond the lifetime of the project. This will be further supported by integrating the climate-resilient production into existing agricultural value chains. Lastly, private sector involvement, wherever possible, will ensure that successful technologies and practices62 implemented through the project will be replicated and scaled up within a competitive market environment. The climate adaptation loan programmes designed with technical assistance and capacity building funded by the GCF grant will form the template for any future, additional loan programmes targeting the adaptation needs of small-scale farmers, in the target regions and Botswana as a whole. Underpinning the overall sustainability of the abovementioned points will be a commitment from government and the beneficiary communities to the operations and maintenance of all physical interventions. Strengthened cross-sectoral linkages between ministries and farmers will also contribute to long-term monitoring of project impacts. In particular, the knowledge-sharing platform that will be established will enable the monitoring of differential successes of various adaptation measures. Such improved monitoring will enable the long-term adaptive management of climate change impacts in Botswana’s agricultural sector.

D. Supporting documents submitted (OPTIONAL)

☐ Map indicating the location of the project/programme

☒ Diagram of the theory of change

☐ Economic and financial model with key assumptions and potential stressed scenarios

☒ Pre-feasibility study

☐ Evaluation report of previous project

☐ Results of environmental and social risk screening

Self-awareness check boxes

Are you aware that the full Funding Proposal and Annexes will require these documents? Yes ☒ No ☐

• Feasibility Study

• Environmental and social impact assessment or environmental and social management framework

• Stakeholder consultations at national and project level implementation including with indigenous people if relevant

• Gender assessment and action plan

• Operations and maintenance plan if relevant

• Loan or grant operation manual as appropriate

• Co-financing commitment letters

Are you aware that a funding proposal from an accredited entity without a signed AMA will be reviewed but not sent to the

Board for consideration? Yes ☒ No ☐

62 such as climate-resilient seed and breed varieties, zero-tillage and drip irrigation