How the International Climate Initiative (IKI) strengthens the local embedding of projects

The IKI is an important part of the German government's international climate finance commitment and is thus obliged to use its funds in developing and emerging countries. To this end, the IKI supports implementing organisations from all over the world. The implementing organisations are often based in other donor countries.

A close involvement of actors in the partner countries of IKI projects and a strong focus on the local context has always been a quality feature of IKI projects. The core assumption is that the stronger the local embedding, the more effective and sustainable the IKI project. Climate and biodiversity measures are particularly effective if they are adapted to local conditions, are based on local knowledge, involve local expertise, and offer opportunities for local participation. 

The significant participation of local actors in the co-design, steering, and implementation of the projects is particularly valuable because this improves the embedding of the projects in the institutional, political, cultural, socio-economic, and ecological context of the partner countries. The diversity of local organisations promotes mutual exchange and the inclusion of local perspectives in a project. This increases the chance to enhance the effectiveness of project measures and to make project successes accessible to a broader local target group. 

Through a stronger sense of ownership of the project measures, local actors in particular can make a major contribution to ensuring that projects continue to have a positive impact after they are completed. Participation in a project can be an opportunity for an increase in knowledge and skills for all organisations involved. It facilitates a lively exchange of knowledge and learning. This, in turn, contributes to the institutional consolidation and further development of administrative and technical skills of organisations and can greatly increase the adaptability of international organisations and their methods to local contexts. 

One criterion for promoting these effects in IKI projects is local content. This means that all IKI projects should be implemented with at least a 50 percent share of organisations that are anchored in the partner countries/regions, generate added value there, and offer jobs and qualifications for local experts. 

In addition to the aforementioned effects, local content can contribute to the quality of cooperation in the IKI projects. Cooperation and knowledge exchange at eye level between German and international organisations and the partner ministries and other partner institutions as well as between different organisations in the Global South (“South-South exchange”) are another important success factor for effective projects. 

Strengthening the involvement of actors in partner countries

Generally, IKI projects should implement at least 50 percent of the IKI fundings in the partner countries/regions through local members of the consortium, contractors/subcontractors, and/or funding recipients. In order to monitor this more closely, the IKI has further developed existing local content targets and continually reviews them as part of the selection process as well as during project implementation (e.g. through the annual reporting of the projects). With this highly ambitious target, the IKI is deliberately taking a pioneering role in the international donor community.

An overview of the local content regulation 

At least 50 percent of the IKI fundings are implemented by organisations in the partner countries of the IKI projects: 

Project funds are counted as local content if they are received and implemented by “local” organisations as part of the consortium or as subcontractors. Local organisations are those that have their own entity under the applicable national law in the partner country or, in the case of regional organisations, focus their activities on the respective project region. 

The following applies to local organisations in the consortium or as subcontractors:

1. Local organisations must have their own legal personality according to the respective national law in force in the partner country.
2. Partner ministries and authorities are generally excluded from funding.

The following applies to national and regional offices of international civil society organisations: 

1. Offices must be registered in a partner country of the respective IKI project and pay taxes there. 
2. The national or regional office can make independent decisions and is largely independent of instructions from the “umbrella organisation” in the operational design and implementation of project funds.
3. International organisations that do not meet these criteria cannot count their project budget share as local content – even if national personnel is employed in the project. Therefore, national offices of international multilateral organisations (e.g. UN agencies), of the GIZ or the KfW, embassies of other countries, or national offices of other bilateral donor countries do not count as local content. 

The following applies to regional organisations such as regional development banks, regional associations of states/economic communities: 

1. The organisation is based in a country of the region in which the IKI project is implemented and focuses activities on the partner countries. 
2. At least one of the partner countries is part of this region.
3. National partner institutions are involved in the implementation at the country level. 
4. For banks and networks: partner countries are members of the regional bank or network.

In justified exceptions, IKI projects may deviate from the target of 50 percent: 

1. In the spirit of promoting South-South exchange, there may be an exception to the 50 percent rule if a substantial part of the project budget is implemented by organisations from the Global South that are not registered in the partner country or region. 
2. Projects may deviate from the 50 percent rule if they can plausibly justify that the local content requirement is not possible because of specific country or subject contexts and/or if local content represents a high obstacle to the effectiveness and implementation of the project or if there are other reasons inherent in the specific project constellation.

It shall be decided on a case-by-case basis whether exceptions are permissible. Even in the case of exceptions, the local content should be as high as possible.