The current GCF Readiness support proposal is positioned as Phase II of the GCF- funded proposal titled “Advance the National Adaptation Plan (NAP) process for medium-term investment planning in climate sensitive sectors in Bosnia- Herzegovina” (NAP Readiness phase I). The NAP I project provided support to the Government of Bosnia and Herzegovina (BiH) to advance the National Adaptation Plan (NAP) process including compilation of a NAP document and implementation strategy to scaling-up adaptation in key sectors; develop municipal level investment financing instruments; and build national, sub-national and sectoral capacity to integrate and mainstream risk informed planning and budgeting. NAP I has created the base and directions for further necessary adaptation actions. It is intended to improve adaptation planning and investment at national, sub national and local level focusing agriculture and water management as proven most vulnerable sectors. In BiH, almost 1mil people are vulnerable to flood risks, with a similar number vulnerable to drought. During the project implementation and within the other climate adaptation related initiatives in country it is recognized a lack of financial resilience of communities due to a lack of climate risk-informed risk transfer instruments such as climate disaster insurance, or similar financial instruments as well as a lack of engagement with private and productive sectors in climate responsive FRM. Thus, the NAP II phase is seen as an opportunity to address this important adaptation mechanism. 

The aim of Phase II of the NAP readiness proposal is to enable BiH to increase investment in climate change adaptation actions at local and national levels through identification and provision of risk transfer options and development of investment plans for climate resilient policies and technologies as well as capacity building of state and non-state actors. The proposal includes activities positioned under the two GCF Readiness Outcomes: (3.2) evidence basis produced to design adaptation solutions for maximum impact, and (3.4) adaptation finance increased. This proposal will replicate the approach to preparation of climate change adaptation financing and investment plans in four additional municipalities. Phase II will have a dedicated focus on the adaptation investments specifically tailor-made for the farmers and agri-enterprises. Under Phase II the discussions with the private sector financial institutions will be further advanced on the topic of the financial risk transfer options for farmers.

This proposal contributes to reducing vulnerability to impacts of climate change by conducting a detailed vulnerability assessment of the agriculture sector in both entities Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS) to identify key vulnerabilities and propose technology solutions. Furthermore, capacity building of state and non-state actors related to climate change will be expanded. The proposal will identify policy options for scaling up adaptation, including by engaging and incentivizing the private sector in adaptation, in addition to its corporate social responsibility.