Latest update on climate finance institutions

The SDG Knowledge Hub of the International Institute for Sustainable Development (IISD) provides the December update on global developments on climate finance institutions.

 

Climate Finance Institutional Update: One Planet Closes Climate Financing Year on High Note

During the month of December 2017, the One Planet Summit in France, and its Climate Finance Day, delivered a number of new announcements from governments and non-state actors. New green bonds were announced by Nigeria, as well as by a bank in the Philippines and the European Bank for Reconstruction and Development (EBRD). In the Caribbean, the Green Climate Fund (GCF) held meetings in countries affected by devastating hurricanes in 2017.

One Planet Summit Accelerates Momentum

The One Planet Summit and a ‘Climate Finance Day,’ jointly convened by the Presidents of France and the World Bank Group and the UN Secretary-General over two consecutive days in Paris, France, resulted in a high number of climate financing-related announcements, both new pledges and affirmations of existing commitments.

In other new funding-related news, in the run-up to the One Planet Summit, eight companies launched an impact investment fund with a target of €100 million, which will aim at improving the lives of two million people and avoiding up to 25 million tonnes of carbon dioxide (CO2) emissions over the next two decades. The fund will be the second ‘Livelihoods Carbon Fund,’ with the first one operating since 2011.

Following the One Planet Summit, Brussels-Capital Region of Belgium announced a €600,000 pledge to the Adaptation Fund. The commitment raised the total of new commitments to the Fund in 2017 to US$95.5 million, translating to a significant over-achievement of the US$80 million target set for the year.

Green Bonds in Tailwinds

News on green bonds markets were also positive in December, with the One Planet Summit marking the announcement of the EBRD on its intention to invest up to US$100 million in ‘Amundi Planet – Emerging Green One,’ which according to the bank is “a fund designed to become the world’s largest green bond fund and the first exclusively dedicated to emerging markets.”

Nigeria issued a sovereign green bond, becoming the fourth country in the world to do so, after Poland, France and Fiji. The NGN10.69 billion (US$26.9 million) bond is intended as a ‘pilot sovereign,’ to be followed by a NGN150 billion green bond programme.

BDO Unibank Inc. of the Philippines issued its first green bond, which also marked the first green bond issued by a commercial bank in the country. The World Bank-affiliated International Finance Corporation (IFC) is the sole investor in the bond that raised US$150 million for expanding financing for private sector investments in climate action.

Other December Events: CIF Funds Plan Anniversary, GCF-Caribbean Meetings Spotlight Resilience, Asia Spurs Pre-2020 Action, Financing

The Climate Investment Funds’ (CIF) Clean Technology Fund (CTF) and Strategic Climate Fund (SCF) held their joint Trust Fund Committee Meetings, which discussed, inter alia, scenarios for CIF administrative costs over the next five years, preparations for CIF’s tenth anniversary in 2018 and a proposal to establish a technical support facility for investment-friendly regulation and other investment-relevant framework conditions for clean energy.

In the wake of the damaging hurricanes that hit the Caribbean region in 2017, the GCF held meetings with its partners in Antigua and Barbuda, Dominica, Barbados, Grenada and Haiti, which included Accredited Entities, National Designated Authorities and private sector representatives. The GCF heard calls for ensuring that financing reaches the grassroots level, in particular in the area of resilience.

The UN Economic and Social Commission for Asia and the Pacific (ESCAP) held its first Asia-Pacific Climate Week in Bangkok, Thailand, which attracted the participation of high-level officials and private sector leaders from more than 30 countries. Discussions focused on identifying ways to scale up climate action and find innovative financing solutions. The meetings delivered a ‘Regional Climate Action Agenda’ to strengthen regional cooperation pre-2020 among governments and non-state actors.

The European Commission, France, the UN Environment Programme Finance Initiative (UNEP-FI), the Clean Energy Ministerial (CEM) and other partners jointly organized a conference, in Paris, France, on accelerating energy efficiency investments in buildings. The conference aimed take stock of progress in commitments by banks and investors in energy efficiency since the adoption of the Paris Agreement in 2015, and to explore ways to accelerate investments.

Institutional News: GCF Opens Call for REDD+ Proposals

In December institutional news, the GCF opened a call for concept notes and funding proposals in response to its pilot programme for REDD+ results-based payments. The call is open for GCF Accredited Entities.

The GCF signed a non-binding cooperation agreement with the China Development Bank (CDB), the world’s largest development financial institution and a major lender for China’s One Belt One Road (OBOR) initiative, for coordinating their activities in supporting climate action. The GCF also signed an Accreditation Master Agreement (AMA) with the IFC. The GCF’s Independent Integrity Unit (IIU) further signed a memorandum of understanding (MoU) with the Central American Bank for Economic Integration (CABEI) on cooperation in the area of institutional integrity and investigative activities relating to Prohibited Practices.

 

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