Latest update on climate finance

The International Institute for Sustainable Development (IISD) provides the November update on global developments in climate finance.


November 2015 Climate Finance Update

During the month of November, the Asian Development Bank (ADB), the Caribbean Development Bank (CDB), the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), the World Bank, the International Finance Corporation (IFC) and the Green Climate Fund (GCF) reported on new financing, collaborations and other climate finance news. Multilateral Development Banks (MDBs), climate funds and forestry research centers launched studies, think pieces and multimedia content on, inter alia, climate-related disasters, vulnerability in Africa, stranded assets, Adaptation Fund activities and REDD+.

On November news, the World Bank launched a plan proposing a total of US$16 billion in funding for climate change adaptation and resilience in Africa. Under the title ‘Accelerating Climate-Resilient and Low-Carbon Development,’ the Africa Climate Business Plan (ACBP) proposes measures for “strengthening,” “powering” and “enabling” resilience in various sectors. Approximately US$5.7 billion of the sum is expected to come from the International Development Association (IDA).

At its 11th meeting, on 6 November, the GCF Board approved its first investments, totalling US$168 million, to eight projects and programmes worth US$624 million in total. The projects include those on: climate-resilient infrastructure mainstreaming in Bangladesh; urban water supply and wastewater management in Fiji; and an energy efficiency green bond in Latin America and the Caribbean

CDB and EIB signed a Letter of Intent on collaboration to support climate adaptation and mitigation initiatives in Caribbean countries.

EBRD reported on the launch of ‘Voluntary Principles for Mainstreaming Climate Action within Financial Institutions,’ developed jointly by the MDBs and the International Development Finance Club of national and regional development groups, which aim to ensure that “climate change considerations are not incidental, but a core to the activities of financial institutions.” The principles cover: committing to climate strategies; managing climate risks; promoting climate-smart objectives; improving climate performance; and accounting for climate action.

Specifically on disaster management, ADB and Pakistan signed a Memorandum of Understanding (MoU) on the establishment of the Pakistan National Disaster Management Fund, which will aim to strengthen the country’s disaster resilience, emergency response and reconstruction capacity.

ADB also signed a project agreement with Vanuatu to support the reconstruction and climate- and disaster-proofing of road infrastructure, which suffered damage from cyclone-induced flooding in March 2015. The US$18.5 million project will be co-financed by the Asian Development Fund, ADB, the Global Environment Facility (GEF) and the Government of Vanuatu. In addition, Japan is providing a US$5 million grant for Vanuatu’s Cyclone Pam School Reconstruction Project.

The World Bank approved US$38 million from IDA to the first phase of the Climate Adaptation and Mitigation Program for Aral Sea Basin (CAMP4ASB). The programme will focus on capacity building on climate change risks, and provide financing and technical assistance to rural communities for climate-smart investments in Takijistan, Uzbekistan and regional activities implemented by the International Fund for Saving the Aral Sea (EC-IFAS).

The World Bank announced the 15 winners of its call for proposals for funding through its Challenge Fund. Grants ranging from US$20,000-150,000 will go to companies, NGOs and universities working to help developing countries better manage disaster risk and build resilience.

The World Bank also wrote on how the US$32.6 million Japan-World Bank Program for Mainstreaming Disaster Risk Management in Developing Countries, aimed at building climate resilience into development, is supporting 22 projects in 30 countries

On green bonds: EIB, BNP Paribas and Vigeo launched ‘Tera Neva,’ a €500 million Climate Awareness Bond; and IFC issued its first green bond in South African rand, raising the equivalent of approximately US$71 million. The proceeds of the IFC bond will go to support to investments in renewable energy, energy efficiency, and other greenhouse gas (GHG) emission-reducing areas.

In November, ADB, the African Development Bank (AfBD), EBRD, the Inter-American Development Bank (IDB), the Climate Investment Funds (CIF), the World Bank, the GCF, the Adaptation Fund, Norden, the World Agroforestry Centre and the Center for International Forestry Research (CIFOR) published studies, evaluations, short articles and multimedia content.

A study by ADB on the causes of intense natural disasters finds that these are “exacerbated by climatic impacts at the local level as well as by climate change globally.” Other ADB studies: assess low-carbon and green policies and practices by developed Asian countries; and argue that advancing regional cooperation and integration can support Asia “better grapple with slowing economic growth, rising inequality, and runaway climate change.”

AfDB’s publication ‘Africa’s Climate Opportunity: Adapting and Thriving’ gives an overview of the Bank’s investments and underscores the importance of international cooperation that is “ambitious, efficient and properly financed.”

IDB studies look at: stranded assets from a MDB perspective; and adaptation and integrated water resource management (IWRM) Nicaragua.

CIF published a Results Report of its US$5.3 billion Climate Technology Fund (CTF), which works on scaling up financing to middle-income countries (MICs) for demonstration, deployment and transfer of low-carbon technologies with high potential for long-term GHG emissions reductions.

A World Bank report on urban flooding in Greater Dhaka, Bangladesh, finds that the area “needs climate-smart policies and higher investment to improve its resilience to intense rainfall and to prepare for climate change.” The World Bank also reported on Morocco’s green growth policies, including the country’s fossil fuel subsidy reform.

The GCF launched a guide titled ‘Investment Opportunities for the Green Climate Fund,’ which presents detailed information on the criteria used the Fund to identify and prioritize investment opportunities, including: the Fund’s approach to investment; the eight results areas; and cross-cutting investment priorities.

The Adaptation Fund released an ‘Adaptation Story’ brochure on its work in Mongolia. Also, the first phase report of an independent evaluation of the Adaptation Fund was made available.

On REDD+, a policy brief by the World Agroforestry Centre (ICRAF) examines how “lessons learned from a decade of REDD+ can be incorporated into a new climate agreement.” A CIFOR brief explores how REDD+ can contribute to low-emission development strategies (LEDS). CIFOR also published a series of expert interviews on the future of REDD+. ICRAF and CIFOR are members of the CGIAR Consortium.

The Climate Policy Initiative (CPI) published its annual ‘Landscape of Climate Finance’ with information on “which sources and financial instruments are driving investments, and how much climate finance is flowing globally.” The study finds that, in 2014, global climate finance flows reached at least US$391 billion.

Multimedia content published by MDBs and climate funds included: a video by ADB with views on tackling climate change; a video by EBRD on actions by the Bank to combat climate change; a podcast by CIF on climate information services; an infograph by the World Bank on networked carbon markets; and a video by the Adaptation Fund providing an overview of the Fund’s projects.

On event-related news in November: AfDB reported on an economic conference that shed light on the role of foreign aid in mitigating the impact of climate shocks on food security; EBRD held a workshop on low-carbon development in Kazakhstan’s cement industry; and CIF organized an event to present emerging lessons from its Pilot Program for Climate Resilience (PPCR). Also, IFC and the German state of Hessen hosted the Green Finance Forum, and an event by the French Institute for Climate Economics (I4CE) and the UN Environment Programme (UNEP) heard the conclusions of UNEP’s report ‘The Financial System We Need’ and a related case study on France.

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