The SDG Knowledge Hub of the International Institute for Sustainable Development (IISD) provides the October update on global developments in climate finance institutions.
Climate Finance Institutional Update: New Financing from Climate Funds, Green Bonds
During the month of October, the Boards of the Green Climate Fund (GCF) and the Adaptation Fund approved new funding for mitigation and adaptation projects in developing countries. Fiji and the European Bank for Reconstruction and Development (EBRD) issued green bonds. The UN Development Programme (UNDP) in Nepal released a glossary of climate finance terminology.
GCF, Adaptation Fund Approve More than US$400 Million for New Projects
In October, a number of major multilateral development banks and climate funds met. The 18th GCF Board meeting in Cairo, Egypt, approved US$393 million for 11 new projects and programmes in developing countries. Projects approved included US$31 million to a UNDP-supported adaptation project on the North Coast of the meeting host country Egypt. The Board did not agree on two proposed projects, according to press reports.
The Adaptation Fund Board approved US$23.8 million in funding for new projects and programmes, and adopted a strategy for the fund for the next five years that emphasizes action, innovation and learning. The Board also decided to explore concrete steps to enhance complementarity with the GCF, and accredited the National Environment Management Council of Tanzania as the Fund’s 26th national implementing entity (NIE).
The Annual Meetings of the World Bank Group and the International Monetary Fund (IMF) in Washington DC, US, also discussed climate change resilience and financing, including at a Global Environment Facility (GEF) session on ‘Disaster Risk Financing: Options and Solutions for the Caribbean’ and a Small States Forum 2017 high-level session. The Caribbean Development Bank (CDB) attended the high-level session, which focused on vulnerability to climate variability and change, and the blue economy.
Meeting in parallel, the Intergovernmental Group of 24 on International Monetary Affairs and Development (G24) issued a communiqué in which the group looks forward to developed countries delivering on their US$100 billion by 2020 financing commitment, and urges these countries to authorize the use of reflows to enhance financing from the Climate Investment Funds’ Clean Technology Fund (CTF).
US$550 Million Issued in Green Bonds; ADB, NDB Discuss Sustainable Transport Co-Financing
In major financing news, Fiji, the incoming Presidency of the 23rd session of the Conference of the Parties (COP 23) to the UNFCCC, issued the first emerging economy sovereign green bond, totaling US$50 million, which will be used to support climate change mitigation and adaptation.
Also in October, the European Bank for Reconstruction and Development (EBRD) issued a US$500 million short four-year ‘Global Green Bond,’ the proceeds of which are earmarked to support a portfolio of environmentally and socially sustainable projects in the areas of energy efficiency, renewable energy, water and waste management, air pollution prevention and sustainable transport.
The Asian Development Bank (ADB) and the New Development Bank (NDB, formerly the BRICS Development Bank) met during the World Bank-IMF Annual Meetings to discuss project co-financing, including for two potential metro railway projects in India. Also, the ADB and the German development bank KfW announced they will increase an existing co-financing partnership in the Asia-Pacific region by US$2 billion through 2020. The additional financing will support ADB infrastructure projects in the region, which are estimated at US$1.7 trillion annually through 2030, including climate adaptation and mitigation costs.
Events Promote Advancing Climate Finance, Sharing Lessons
A number of other multilateral events also drew attention to climate financing, including in the areas of resilience, renewable energy and budgeting for climate action. In Saint Lucia, a high-level meeting of Caribbean governments and international stakeholders aimed to “galvanize key development stakeholders to lay the groundwork for a wide range of projects across many sectors.” Participants of the event titled, ‘Caribbean Investment Forum,’ stressed the need for more investment into climate-resilient infrastructure to allow for Caribbean island States to achieve their clean energy and sustainable development plans.
The GCF participated in a meeting of the Alliance of Small Island States (AOSIS) on advancing the Initiative for Renewable Island Energy (IRIE), which supports AOSIS members in renewable energy transitions as part of their nationally determined contributions (NDCs) under the Paris Agreement.
Representatives of various ministries from Bangladesh participated in a study tour to Indonesia as part of a UNDP-sponsored Governance of Climate Change Finance Programme. The aim of the tour was to increase understanding of Indonesia’s climate vulnerabilities and the country’s climate change mitigation and adaptation financing policies and strategies.
Pakistan released a strategy to align its climate action with its financial management systems, laid out in two documents prepared with support from the UNDP, namely the Climate Change Financing Framework and the Climate Public Expenditure and Institutional Review. According to the UNDP, such documents, which have also been developed in Indonesia, Cambodia and Bangladesh, help countries to budget and plan better to adapt to climate change.
UNECA Concerned over Climate Finance Implications of US Withdrawal from Paris Agreement
A presentation by a representative of the African Climate Policy Centre (ACPC) of the UN Economic Commission for Africa (UNECA) on the implications of a US withdrawal from the Paris Agreement concluded that it “will have massive implications on US support to the financing of climate actions in the developing world,” suggesting that “the US has great difficulty crafting public policy to control private interests in climate change.” He called for countries to “identify mechanisms to compel countries to reduce dependence on fossil fuels, by reducing fossil fuels subsidies and incentives” under the Paris Agreement.