Latest update on climate finance institutions

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

 

Climate Finance Institutional Update: Focus on Greener Shipping in Europe

In February 2018 institutional climate finance news, the Green Climate Fund (GCF) approved a significant amount of project funding and elected its Co-Chairs for the year. The European Investment Bank (EIB) and ING launched a facility for green shipping in Europe. The UNFCCC Standing Committee on Finance (SCF) issued a “call for evidence” for its third biennial assessment report.

GCF Board Elects Co-Chairs, WUF Delivers Sustainability Framework

The 19th meeting of the GCF Board convened in Songdo, Republic of Korea, approving more than US$1 billion in funding to 23 projects and US$60 million for the implementation of the GCF Readiness Programme. The Board also elected as its 2018 Co-Chairs Lennart Båge (Sweden) and Paul Oquist (Nicaragua), and took decisions on, inter alia, an Indigenous Peoples Policy and an Environmental and Social Policy. Also in February, the GCF nominated Javier Manzanares, former interim Deputy Executive Director, as the Fund’s first Deputy Executive Director.

In February, the ninth session of the World Urban Forum (WUF9) took place in Kuala Lumpur, Malaysia. At the meeting, the World Bank and the Global Environment Facility (GEF) launched the Urban Sustainability Framework (USF) resulting from a collaboration among “cities, organizations and experts,” which contains “six key dimensions of urban sustainability:” governance and integrated planning; fiscal sustainability; economic competitiveness; environment and resource efficiency; low carbon and resilience; and social inclusiveness. According to the World Bank, “the USF assists cities [in] identify[ing] their sustainability aspirations and establish[ing] how they will finance their implementation plans.”

The Nordic Development Fund (NDF), World Bank, African Development Bank (AfDB) and African Union Commission (AUC) organized the third Africa Climate Resilient Infrastructure Summit (ACRIS III) in Marrakech, Morocco. The meeting brought together 250 representatives of regional and national authorities, financing institutions and the private sector. The summit focused on opportunities to integrate climate change resilience into infrastructure development plans through cost-effective solutions that also come with environmental and social benefits.

Funding News: Greener Shipping Ahead, Divestment from Fossil Fuels Continues

In major climate financing news, the EIB and banking institution ING signed an agreement on a EUR 300 million facility that will support green investments in the European shipping market. Each partner will contribute EUR 150 million and the facility will be invested with the EIB over the next three years.

The European Bank for Reconstruction and Development (EBRD) and the International Maritime Organization (IMO) launched a strategic partnership for sustainable maritime transport, enshrined in a Memorandum of Understanding (MoU), under which they will exchange know-how and work to support governments in implementing frameworks for a “fair, effective and sustainable maritime industry.”

In divestment news, insurance company Generali announced plans to divest EUR 2 billion from coal. According to the UNFCCC, the company has “been a staunch supporter of climate action for a number of years” and also has plans to invest in EUR 3.5 billion in “green sectors” through green bonds and infrastructure.

Green Bonds to Support Energy-efficient Homes in Turkey

The EBRD invested the equivalent of US$60 million in a green bond issued by Turkish Yapı Kredi Bank, the proceeds from which will go to supporting energy saving measures in the residential sector. The investment is part of EBRD’s Turkey Residential Energy Efficiency Financing Facility and is being complemented by a US$15 million concessional loan from the Climate Investment Funds’ (CIF) Clean Technology Fund (CTF). The funds will be on-lent to individual homeowners, groups of homeowner and private service providers in the residential sector.

The EIB issued its first Euro-denominated Climate Awareness Bond (CAB) in 2018, a EUR 250 million increase of the CAB due in 2037. The issuance was timed to coincide with the launch of the final report of the European Commission High-Level Expert Group (HLEG) on sustainable finance. The report, titled ‘Financing a Sustainable European Economy,’ makes a series of recommendations, including: establishing an “EU sustainability taxonomy,” starting with climate mitigation, to define areas where investments are needed the most; clarifying investor duties to bring greater focus on environmental, social and governance (ESG) factors in investment decisions; and upgrading disclosures to make sustainability opportunities and risks transparent.

Related to ESG, at a high-level forum targeting banks’ boards and senior executives in Manila, the Philippines, the local central bank and the International Finance Corporation (IFC) sought to encourage Philippine banks to integrate ESG standards in their operations and to increase financing for climate-friendly and socially inclusive projects

Institutional news: SCF Calls for Information on Financial Flows

The UNFCCC SCF, which is preparing its third biennial assessment and overview of climate finance flows, issued a call for information and data. The SCF is looking for evidence on: methodological issues relating to measurement, reporting, and verification (MRV) of climate finance; climate-related finance flows; and assessment of climate finance flows. The call is open through 15 March 2018. The SCF assists the UNFCCC Conference of the Parties (COP) with MRV of the support provided to developing countries

The International Fund for Agricultural Development (IFAD) announced that its Indigenous Peoples Assistance Facility (IPAF) would be launching a call for proposals in March 2018. IPAF, which is based on the principle of Indigenous Peoples’ self-determined development, will provide 35 grants of US$20,000-50,000 to small projects designed and implemented by indigenous peoples’ communities and organizations. The projects should fall in one of the following four areas: food security and nutrition; access and rights to land territories and resources; access to market; and climate change mitigation and adaptation.

 

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