Obstacles to Climate Finance for Local CSOs in Post-2021 Myanmar
SRIc Insights By Pyae Phyoe Mon
Since Myanmar’s 2021 military coup, civil society organisations working on environmental and climate issues have faced mounting restrictions, limiting their access to international climate finance and their ability to support local resilience efforts.
In this article, I discuss the major limitations, in terms of political, financial, institutional, and operational aspects, that local actors face in accessing climate finance in this challenging setting.
Key Takeaways:
Local civil society organisations in Myanmar experience political, financial, and institutional barriers, and difficulty in benefiting from international climate funds as a result of the 2021 military coup.
Banking transfers, sanctions, and donor hesitation have created a localisation gap, leaving communities without the resources they need to adapt to climate change and build resilience.
To build sustainable and climate resilience, climate finance must transition from centralised, state-oriented models to flexible, locally-oriented systems that empower civil society organisations.
What is climate finance?
Climate finance refers to local, national, or transnational financing obtained from public, private, and alternative sources of financing. These funds are aimed at supporting climate change mitigation and adaptation efforts for vulnerable communities. Simply, it means that all financial flows are for building community resilience, protecting ecosystems, reducing greenhouse gas emissions, and preparing societies for the unavoidable impacts of climate change.
Myanmar, one of the world’s vulnerable countries to climate change, is currently facing political instability. The 2021 military coup not only led to a humanitarian crisis but also impacted climate action. The country consistently ranked among the top 10 countries that are most affected by extreme weather over the last two decades. Moreover, its low-lying Ayeyarwady Delta is seriously threatened by the rise of sea level, while the central Dry Zone experiences droughts and food insecurity.
According to the 2023 OECD report, the prosperous nations have promised to provide USD 100 billion per year in climate finance for developing countries. However, access to funds remains uneven. For example, in 2022, only about 10% of the total climate finance went to low-income countries. Myanmar received USD 3.5billion of the climate-related development finance between 2015 and 2021. Climate finance is indeed essential for developing countries like Myanmar to promote long-term development and environmental sustainability.
Normally, the distribution of climate finance, particularly for adaptation, has been through local civil society organisations (CSOs). These organisations have specific knowledge, community trust, and access to large international associations. Thus, they are a critical delivery mechanism for climate finance, ensuring these funds go toward localised resilience.
However, local civil society organisations that are the responders to humanitarian and environmental crises now face challenges to secure climate finance due to systemic barriers. The 2021 military coup has created limitations and restrictions for this process, leading to obtain financing from difficult to impossible. As a result of the post-coup political instability, multilateral climate funds such as the Green Climate Fund (GCF) and Global Environment Facility (GEF) are unable to transfer funding through traditional pathways. Thus, local CSOs that are working with ethnic minorities or displaced populations struggle with rising climate disasters, with limited financial access.
Furthermore, armed conflict and forced displacement are intertwined with worsening environmental deterioration. Following the 2021 military coup, there are changes in donor strategies, banking constraints, and security concerns, as well as alterations in how donations can flow, where they can be spent, and who is eligible.
Barriers to Climate Finance in Myanmar after the 2021 coup
Political and Legal Barrier
Large-scale climate financing is aimed to be nationally determined, which means funds from donors such as the GCF and GEF go through a country’s government ministry, National Designated Authority (NDA). This primary channel is closed as donors do not want to work with the junta to distribute climate funds. On the other hand, the State Administrative Council (SAC) has secured laws and mechanisms for NGOs and CSOs following the coup.
Tin Shine Aung, Consulting Director of the Shwetaungthagathu Reform Initiative Centre (SRIc), who worked for a UN agency in Myanmar under a GEF-funded project during the 2021 military coup, explained:
“A few months after the coup, the military government began demanding financial disclosures through the Myanmar Foreign Trade Bank (MFTB), the main channel for UN agencies to receive funds from their parent organisations. They even asked UN offices to submit detailed breakdowns of all financial transfers, including individual staff salaries and project expenditures. These demands violated UN labour practices and severely limited operational transparency.”
SAC implementation and restrictions lead to challenges for CSOs and UN agency operations to receive climate finance and to function effectively in Myanmar. Additionally, many groups face the risk of arrest, freezing bank accounts, or suspension if they manage independently. If a local CSO wants to seek a climate grant, it requires registration with the junta. CSOs operating in resistance areas are technically illegal organisations, and thus cannot apply for any formal, verified funding stream.
Financial barriers such as banking, sanctions, and transfers
Another significant factor is the financial barrier, which includes banking, sanctions, and transfers. In 2023, the Financial Action Task Force (FATF), the global anti-money laundering (AML) watchdog, named Myanmar to its blacklist. This results in forcing the international banks to apply enhanced due diligence, as they refuse to process any transactions connected to Myanmar due to non-compliance fines.
Furthermore, an international bank finds it difficult to transfer payments to a Myanmar bank account, even if the source is a recognised humanitarian organisation and the recipient is a registered local CSO. The risk of funds being interrupted or breaking AML/CTF (Counter-Terrorism Financing) regulations is too high. Thus, it has blocked all formal transactions, which are the lifeblood of international grants. The collapse of domestic banking is also contributing as a financial barrier. The junta limits cash withdrawal, and the value of the currency, the Kyat, has fallen dramatically.
2. Institutional and Capacity Barriers
Most local civil society groups (CSOs) face significant problems that extend beyond political and financial barriers, including a lack of institutional competence that international donors demand. These obstacles include poor governance and financial management institutions, insufficient technical expertise to develop the project in accordance with frameworks such as the Green Climate Fund’s logic models, insufficient experience in managing climate change concepts, measurements, and proposals, and a lack of specific monitoring and evaluation frameworks.
Risk, Security, and Operating Environment
Civil society organisations (CSOs) that are working in conflict zones face significant challenges. These include disrupted logistics, staff displacement, and changes in territorial control. Travel restrictions and military checkpoints also make community engagement risky, while the destruction of essential infrastructure makes project delivery difficult. Additionally, donors often perceive Myanmar as a high-risk environment, resulting in shorter project cycles, stricter oversight, or even the complete withdrawal of support. According to Refugees International (2022), humanitarian and climate initiatives along the Thailand-Myanmar border encounter difficulties related to both access and legal uncertainty. These factors create a situation where local CSOs struggle to maintain continuity in climate adaptation projects, which rely on multi-year investments and building trust within communities.
Consequences of the obstacles on climate resilience
The combined effect of these obstacles leads to a localisation gap, indicating that the majority of international climate funding fails to reach the community level in Myanmar. This not only undermines local resilience but also reduces the overall effectiveness of global investments in climate initiatives. When local civil society organisations (CSOs) are neglected, interventions tend to be imposed from outside and tend to be less enduring. This causes communities to lose ownership, trust, and relevance to their context—essential factors for effective adaptation. Since Myanmar’s rural inhabitants depend significantly on natural resources, it is crucial to improve local CSOs’ access to funding to safeguard both livelihoods and ecosystems.
Conclusion
The ongoing political crisis in Myanmar also represents an environmental crisis. Since 2021, the gap between climate vulnerability and access to financial resources has widened significantly. Local civil society organisations (CSOs), which are closest to the communities affected by these issues, face exclusion from formal climate finance due to political repression, financial barriers, and institutional weaknesses.
To address this divide, we need to rethink the climate finance structure by transitioning from centralised, state-led systems to flexible, locally grounded mechanisms. For example, in the Myanmar case, ethnic minority communities and conflict-affected areas are left behind because of its current political instability, and traditional national channels for climate finance are inaccessible. Therefore, innovative approaches such as cross-border climate financing or area-based support models are required for operating outside of military government control. These alternative ways have been discussed in humanitarian and development contexts to guarantee aid reaches conflict-affected areas when state systems are compromised.
If climate finance continues to prioritise bureaucracy over authentic human and environmental security, commitments to international agreements like the Paris Accord will ultimately fall short for the people of Myanmar. In short, empowering Myanmar’s civil society to access and manage climate finance is crucial not only for fostering inclusion but also for building genuine and lasting climate resilience in one of the world’s most vulnerable nations.
Pyae Phyoe Mon is a Junior Research Fellow at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc) and an M.A. Candidate in Social Sciences at the Faculty of Social Sciences, Chiang Mai University, Thailand.
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