This policy brief outlines the challenges identified in rolling out the direct access mechanism for the Adaptation Fund (AF). Direct access refers to a new approach to fund distribution that bypasses the multilateral institutions that have traditionally acted as facilitators in order to increase recipient countries' ownership and accountability. In 2009, the Adaptation Fund Board adopted fiduciary standards with a system of accreditation to ensure minimum levels of competency in recipient countries' National Implementation Entities (NIEs). These related to:

financial integrity, including the ability to accurately and regularly record transactions and balances, to safeguard, manage and disperse funds effectively and have legal status to contract with the AF
institutional capacity to undertake monitoring and evaluation and to manage or oversee project implementation
transparency and self-investigative powers.

Of the 22 countries that submitted proposals to the AF by November 2010, only one involved a NIE (that of Senegal). The United Nations Development Programme (UNDP) was responsible for 18 of the proposals, suggesting a continuation of the business as usual multilateral agency approach. The AF states that its role is not to support capacity building of NIEs, recommending that multilateral agencies provide the necessary assistance. This can potentially raise conflicts of interest. The policy brief concludes by highlighting three broad implications that warrant attention.

Operational systems must be ready in advance of concrete adaptation actions for them to be effective.
The AF and its partners must look to other funders to support NIE capacity building.
Low management capacity may result in some countries taking longer to accredit NIEs; such countries are at a competitive disadvantage in gaining direct access to the AF due to difficulties in accreditation.