Moving Towards a 2 0 World: The Role of Climate Funds Presentation by Preety Bhandari Director, Climate Change and Disaster Risk Management At the 2018 Forum of the Standing Committee on Finance The Climate Finance Architecture: Enhancing collaboration, seizing opportunities
Outline Global Climate Finance Data and Trends Multilateral & Bilateral Financing Climate Funds and Impacts: Green Climate Fund Climate Investment Funds Global Environment Facility Least Developed Country Fund Adaptation Fund Key Observations
Global Climate Finance Data and Trends
Global Climate Finance 2012-2016 2015 Investments by region, 2015/2016 annual average climatefinancelandscape.org
Average Climate Finance 2015-2016 Over 2015-2016, 79% of climate finance was raised in the same country it was spent. There is an uptrend in domestically raised investment indicating persistence of strong national policies and regulatory frameworks for climate-related projects. East Asia and the Pacific remains the region with the largest climate investments, accounting for 32% of global investments, equivalent to $132 billion. Investments by region, 2015/2016 annual average climatefinancelandscape.org
Multilateral Climate Finance, 2012-2018: Recipients Region Total (USD million) Adaptation (USD million) Mitigation (USD million) Multiple foci (USD million) Africa 2,507.83 1,318.78 979.09 209.96 Asia 3,953.86 1,113.38 3,251.06 342.09 Europe 785.62 13.90-19.06 Global* 855.41 855.41 855.41 855.41 Latin America and the Caribbean 2,580.51 2,580.51 2,580.51 2,580.51 Middle East and North Africa 1,068.72 1,068.72 1,068.72 1,068.72 Total 11,751.96 3,223.31 8,734.79 5,075.75 Notes: -*Global refers to multi-countries and multi-regions. - Europe includes Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Moldova, Montenegro, Romania, Russian Federation, Serbia, Slovac Republic, Turkey, and Ukraine. - Figures are cumulative from 2012 and includes two multi-donor national funds (ICCTF and Amazon Fund) and a multi-regional fund (CBFF). - Mitigation figures include forestry projects http://www.climatefundsupdate.org/data, downloaded 25 June 2018
Sources and intermediaries of public climate finance From: CPI. Global Landscape of Climate Finance 2017
Multilateral & Bilateral Financing
Multilateral Climate Funds
MDBs Climate Finance Contribution Climate Cofinancing
MDBs Contribution to Scaling-up Finance
International Development Finance Club IDFC formed in 2011 brings together 23 leading international, national and sub regional development banks from Africa, Asia, Europe, and Central and South America.
Climate Funds and Impacts
Green Climate Fund (GCF) Established in 2010 to channel climate finance with pledges of $10.3 billion from 43 state governments GCF endorsed its first batch of projects, including one from ADB for Fiji, at its 11 th Board meeting in November 2015 A relatively young fund, GCF has committed $3.7 billion to 76 projects globally
Impacts: GCF Estimated reduction in greenhouse gas emissions (CO 2 e) and number of beneficiaries of the approved projects (cumulative, 11 th -19 th Board Meetings) Source: GCF/B.20/Inf.06 8 June 2018
Impacts: GCF GCF Portfolio by region, impact, and thematic windows Source: GCF/B.20/15 8 June 2018
Climate Investment Funds (CIFs) Established in 2008, CIF aims to accelerate climate action by empowering transformations in clean technology, energy access, climate resilience, and sustainable forests in developing and middle income countries. CIF s large-scale, low-cost, long-term financing lowers the risk and cost of climate financing. It tests new business models, builds track records in unproven markets, and boosts investor confidence to unlock additional sources of finance. Graphic Source: AfDB
Impacts: CIFs Clean Technology Fund
Impacts: CIFs Pilot Program for Climate Resilience
Global Environment Facility (GEF) Trust Fund established on the eve of the 1992 Rio Earth Summit, to help tackle earth s most pressing environmental problems. GEF funding to support the projects is contributed by donor countries. These financial contributions are replenished every four years by the GEF 39 donor countries.
Impacts: GEF GEF CORPORATE SCORECARD: Contributions to the Generation of Global Environment Benefits
Impacts: GEF Utilization of GEF Trust Fund over time by focal area (million $) Climate change portfolio highlights, 2017 Source: IEO-GEF, 2018
Least Developed Country Fund LDCF Financing by Region and by Sector ($ Million), as of April 30, 2018
Least Developed Country Fund Expected Results for LDCF Projects That are CEO Endorsed or Approved, as of April 30, 2018*
Adaptation Fund The Adaptation Fund (AF) finances projects that help vulnerable communities in developing countries adapt and build resilience to the effects of climate change while providing an innovative direct access modality that allows accredited national institutions in developing countries to access financing and manage projects directly. Source: AF Briefing Note, March 2018
Adaptation Fund: Small Island Developing States Adaptation Fund (AF) has allocated US$ 110.4 million to 15 concrete adaptation projects in 14 SIDS countries. Altogether 17 SIDS countries have received support from the AF (Readiness & Project Formulation Grants included)
Key Observations
Broad Convergence in priorities: mitigating GHG, # of beneficiaries Different scale, scope, priorities Evaluation criteria Volume of financing Catalyzing transformation Policies & Institutions Stakeholder engagement Technology transitions Building Resilience Making climate financing work Country ownership Results based monitoring Engaging private sector
New starting point Nationally Determined Contributions (NDCs) $23 trillion in investment opportunities (IFC, 2017) Country programming (e.g. Climate Investment Framework) NDCs Sector priorities Domestic Funds/ National Funds Multilateral/Bilateral, International Funds - Public, private MDBs, FDIs, Climate Funds Complementarity of funds and institutions Role of concessional financing for incentivizing climate action
For further information https://www.adb.org/themes/climate-change-disaster-risk-management/main https://www.adb.org/climate-change-financing