The first two phases of readiness support received in India focused on strengthening the institutional capacity of the National Designated Authority (NDA) and building capacities of the Direct Access Entities (DAEs) and State Governments and administrations of Union Territories (UTs) to actively engage with the NDA for leveraging available resources from GCF. The GCF Country Programme Document was developed which identified strategic priorities that could be translated into projects/programmes with sound business models and financing structures that could in turn facilitate tapping of public/private finance. Multi-stakeholder engagements were conducted through national and sub-national consultations on GCF policy frameworks and priority areas for potential projects.  

The two phases of the readiness support have been instrumental in introducing GCF and its mandate to key stakeholders of climate finance mobilization in India and making them aware of the various financial instruments that the Fund provides as well as development of projects in alignment with the GCF investment criteria. However, there are several key readiness challenges that have been identified which need to be addressed to unlock greater climate investment in India:  

Lack of a sustainable technical capacity building programme to support key stakeholders to effectively engage with the NDA and GCF. 

• Limited resources dedicated to coordinate and share lessons across various national and sub-national entities (AEs, DAEs, EEs, Private Sector, CSOs) to enable all actors to programme resources in alignment with the GCF guidelines and national priorities 
• Limited capacities to develop and implement innovative financing mechanisms and blend various financing instruments for low carbon projects in India. 
• Need for updating the GCF country programme document in alignment with the updated NDCs as well as changing national priorities post the COVID-19 pandemic.  
• A country readiness needs assessment is yet to be conducted that will identify human, institutional, and technical capacity gaps and challenges to be able to efficiently programme, access, deploy and monitor climate finance in the country and also allow India to apply for future multiple-year strategic readiness activities. Current frameworks do not sufficiently communicate which financial products the states can utilize, the incentive programs at their disposal, or the various fiscal frameworks they could utilize to access GCF and other climate funds 
• Limited opportunities for private sector to gain information (i.e., public-private fora) & seek clarifications about processes and procedures of the GCF as well as understand opportunities for climate investment. 
• Need for developing innovative projects that will utilize various financing instruments, foster new market segments, and create business models.  
• Limited resources and experts for developing innovative instruments for public-private financing of medium and large-scale projects aligned to GCF investment criteria. 

Through this proposal, the NDA seeks GCF readiness support in implementing the third phase of the project to address the needs stated above through the following measures: 

• Deploy a sustainable capacity building programme to support for DAEs, State Governments/UTs, civil society organizations, and private sector entities to enable them to access climate finance for investments that are in alignment with national priorities. 
• Develop a community of practice at the national and state levels among the NDA’s key partners to create awareness among stakeholders for leveraging funds from GCF as well as to seek inputs to strengthen climate finance programming in India 
• Design and deploy needed frameworks (Country Programme-update, Readiness Needs Assessment, Green Credits Framework etc.) at the national and state levels that will guide future climate investment in alignment with India’s ambitious climate agenda.  
• Scale up engagement with the private sector and design innovative new mechanisms / facilities for private climate finance mobilization.  
• Design new concept notes that are in alignment with India’s policy agenda and the frameworks /mechanisms /facilities rolled out under this readiness proposal 

Overall, the readiness support will help develop and implement projects to mobilize climate finance in sectors and regions identified in India’s updated NDCs, such as agriculture, water resources, health, disaster management, Himalayan region, and coastal regions. Further, India will assume the G20 Presidency from December 2022 to November 2023. The readiness support will help provide technical assistance to the Environment Ministry to integrate climate finance within each of the thematic areas and identify sectors of priority under these areas that require climate finance. 

The main beneficiaries of the project will be the NDA, line ministries/departments, state governments, administrations of UTs, DAEs/EEs, banks, financial institutions, private sector entities, and civil society organizations.