"International commitment is essential to implement the Paris Agreement on Climate Change, including by ensuring the availability of the necessary concessional financing." (para 12, pg 3)
"International commitment is essential to implement the Paris Agreement on Climate Change, including by ensuring the availability of the necessary concessional financing." (para 12, pg 3)
The Asian Development Bank has agreed to give a 20-year loan of $175 million to Power Grid Corp. of India Ltd to finance a proposed $450 million transmission project for transferring power from new solar power parks to the grid.
On March 13, the British newspaper ‘The Telegraph’ published an article about the Climate Investment Funds that contained a number of claims with which we strongly disagree:
The CIF Secretariat would like to provide some clarifications in the following areas:
The Purpose of the CIF
The CIF has been a crucial part of the international response to climate change as the largest source of multilateral concessional climate finance available to date. They have played a pivotal role in helping to increase the volume of climate investment going to developing and emerging economies and have been instrumental in financing projects that would not have happened because of high costs and perceived risks.
The CIF has been addressing the main gaps and barriers to climate investments for many developing countries. These include the lack of access to affordable long-term capital, high commercial risks, and non-financial risks such as capacity gaps.
The CIFs are a tried, tested, and trusted financing mechanism. Countries are now reaping the benefits from CIF investments in the form of cleaner and more reliable energy, new industries and markets, climate resilience and sustainable forestry. None of this would have happened without CIF involvement.
The CIF is delivering – supporting over 300 projects in 72 developing countries, and mobilizing billions of dollars from development banks and the private sector that have scaled up new renewable technologies at an unprecedented rate.
The CIF’s Clean Technology Fund is reporting greenhouse gas emission reductions equivalent to taking 1.4 million cars off the road and it has supported installed power capacity of 3.3 Gigawatts.
In Morocco, the CTF supported the phased construction of the Noor Concentrated Solar Power (CSP) plant – the largest of its kind in the world. The first facility of the 3-phase Noor plant became operational in December 2015 and, by 2018, will be on track to generate over 500 megawatts of installed capacity, reduce carbon emissions by 760,000 tons per year, and supply power to 1.1 million Moroccan households. Low-cost debt provided by the CTF helped cut the cost of power production and slashed the Moroccan government’s power subsidy from $60 million to $20 million per year.
In South Africa, in 2014, KaXu Solar One Concentrated Solar Power project, financed by IFC and CTF, became the first private sector utility-scale CSP plant in the developing world. This 100 MW plant supplies enough base-load energy for 80,000 households. And the 100 MW Sere Wind Farm - one of the largest in Africa – is the first commercial utility-scale renewable energy project of the national energy utility Eskom. It will save nearly 6 million tons of greenhouse gas emissions over its 20-year expected operating life. Average annual energy production is estimated at about 298,000 megawatt hours (MWh), enough to supply about 68,000 standard homes. A total of $100 million in concessional funds from CTF were essential to bridge the cost gap relative to coal power generation and in providing the positive incentives required for Eskom and its lenders to proceed with the investment.
And in Thailand, the CIF’s Clean Technology Fund provided $4 million in debt, blended with $8 million of debt from IFC, to support a dynamic entrepreneur as she attempted to develop some of the country’s first utility-scale solar plants and move this high-potential market off the ground. CTF funds helped reduce long-term project finance risks for lenders and sent positive signals to the local financial markets for utility-scale solar. By late 2011, new solar farms began supplying clean and renewable power to Thailand, and the entrepreneur and her company have attracted over $800 million for their clean energy investments in the country.
Every Clean Technology Fund dollar leverages a further nine dollars from other sources. As of December 31, 2016 the CTF has approved $4.1bn in projects, which in turn have crowded a total of $46.9 billion in in co-financing, including $12.9 billion in MDB funding and $19.2 billion in commercial finance.
Established in 2010, the Program for Scaling up Renewable Energy in Low Income Countries (SREP) aims to demonstrate the economic, social and environmental viability of low-carbon development pathways in the energy sector by creating new economic opportunities and increasing energy access through the use of renewable energy. By design, it aims to tackle a challenging development issue (energy access) in the most challenging countries.
The 18 projects that have been approved to date by SREP and reporting results are at various stages of implementation but even in these challenging markets and for these first-of-its kind investments in low income countries SREP is delivering. In Nepal, for example, the SREP supported project is providing access to electricity and facilitating productive end uses of energy at the “bottom of the pyramid” in rural locations, which are beyond the “last mile” of the grid. About 1,500 households, or 6,600 people are already benefiting from installation of lighting and mobile radio charging systems, displacing expensive diesel and gasoline use in generator sets and kerosene for lighting.
The Pilot Program for Climate Resilience has already supported 2.8 million people – half of them women - to cope with the adverse impacts of climate change, and is on course to support 40 million people through the implementation of 44 of its current 58 projects.
While most Forest Investment Program projects only started implementing in the field in 2015 they have already supported 65,000 people in Lao PDR, Mexico and Ghana through livelihood co-benefits. Good progress has also been observed on forest law enforcement, ensuring participation of all key stakeholders in decision making processes and tenure access and rights.
Value for Money
The article also implicitly argues that helping developing countries tackle climate change is a bad deal for UK taxpayers. We disagree. Helping people prepare for the impacts of climate change – including floods, droughts, and natural disasters – and reducing the emissions that cause them, is an investment that will pay back many times over.
At the UN’s global climate conference this week, governments and development partners came together to examine the role of financing in shaping some of Africa’s groundbreaking renewables successes such as Morocco’s Noor Concentrated Solar Power (CSP) plant.
When India’s ambassador to the United Nations, Syed Akbaruddin, delivered his country’s signed agreement to the Paris climate change plan last Sunday, the world moved one big step closer to a monumental deal on climate.
That India chose to hold the ceremony on Mahatma Gandhi’s birthday, Oct. 2, made the occasion all the more poignant, with its nod to the importance of action on climate change in the context of the human impacts caused by a changing climate —from food security to how people earn a living.
The journey to this point started in Paris last year, when 188 countries committed to being part of the solution in the urgent effort to mitigate against climate change.
Nine months after Paris and with COP22 in Morocco fast approaching, India’s signature helped to put the Paris agreement on the cusp of being a global and legally binding agreement on climate action.
So why did it matter so much that India signed on the dotted line?
Along with China and the United States – who ratified the treaty last month - India is among the biggest contributors to greenhouse gas emissions levels. The country’s growing energy demand and emissions levels therefore have important consequences for international efforts to combat climate change.
After Paris the race to secure the signatures of the 55 countries that account for 55 percent of global greenhouse emissions was on. Every single country that signed the agreement in Paris matters, but for the agreement to be meaningful and effective, its ratification by countries like India, on a fast development trajectory and big contributors to emissions levels, was critical.
“India is committed to the shared global vision for combating climate change and protecting the most vulnerable citizens from its adverse impacts.
“India is committed to the shared global vision for combating climate change and protecting the most vulnerable citizens from its adverse impacts. Our commitment to a low-carbon path assumes the unhindered availability of cleaner sources of energy and technologies and financial resources from around the world,” said Saurabh Vijay, and Adviser to India’s Executive Director at the World Bank and chair of the Climate Investment Fund's Clean Technology Fund committee.
India has the world’s second largest population and fourth largest economy. To meet the growing energy needs of its commercial and industrial activity, urbanization and rising standards of living, the south Asian nation needs to increase primary energy supply by 300–400% increase its electricity generation capacity by 500–600% over the next two decades.
Coal-based power plants supply over 50% of India’s electricity, but with domestic supply constrained and imports likely to increase, diversifying its energy supply is critical.
As part of the effort to diversify energy sources and address the unmet energy needs of over 200 million people that are unconnected to the electricity grid, India secured a $625 million loan to support the widespread installation of rooftop solar photo-voltaic (PV), in May this year. The loan is complemented by a co-financing loan of $120 million on concessional terms and a $5 million grant from the CIF’s Clean Technology Fund.
In India, nearly 1 in 4 people still don’t have access to electricity. To increase energy access for the poor, India has set unprecedented, ambitious plans to boost solar energy nationwide.
The loan was made possible by the alignment of government policy and declining costs that make rooftop solar an opportunity to transform India’s energy sector and make access to sustainable, affordable and reliable energy a reality for more people. The overall potential demand for rooftop solar in India is estimated at about 124,000 MW.
To date, 72 countries representing about 56.75 percent of the global greenhouse gas emissions have ratified the Paris Agreement.
Once in effect, the Agreement will enable concrete global action on climate change, including:
- The reduction of emission levels and ensuring that the global average temperature stays below 2°C above pre-industrial levels;
- Countries holding each other accountable through a meeting every five years to set progressively more ambitious targets that are informed by the best science; and
- The strengthening of the world’s capacity to respond to the impacts of climate change, including through support to developing countries with their national adaptation efforts.
Over the past year, the momentum for ratifying the Agreement grew as the promise of Paris became the new normal in terms of building low-carbon economies. After India, all eyes were on the European Union, which, with its 28-country bloc, grabbed the baton to seal the deal that moved the world over the line by getting the highest greenhouse gas emissions contributors to ratify.
The deal will officially go into effect on Nov. 4, 2016.
Washington, D.C. (June 21, 2016) – The governing body of the $8.3 billion Climate Investment Funds (CIF) last week gave an important signal by asking the CIF to develop options for a financing vehicle to attract private capital investors for renewable energy and clean technology projects in developing economies.
The steering committee of the CIF's $5.6 billion Clean Technology Fund (CTF), consisting of donor and recipient countries, gathered in Mexico to discuss new financing modalities which could make CTF's assets attractive for institutional investors.
The CIF's Manager Mafalda Duarte welcomed the decision, which comes at a time when research from Brookings shows investments in sustainable infrastructure of $90 trillion USD are required over the next 15 years:
"This work breaks new ground for climate finance and such innovation is needed if we are to move from billions to trillions and deliver on the ambitious agenda of the Sustainable Development Goals. Scaling-up investments can be particularly transformational in areas that have lacked funding or for technologies on the threshold of becoming economically viable. These will be crucial to delivering a low-carbon future."
This potential avenue to tap into new and much needed private sector financing would support climate-smart investments in areas such as energy storage, distributed generation, sustainable transport and industrial and residential efficiency.
"We have seen time and time again that concessional or de-risking financing is essential to ramp up low carbon investments in emerging markets", Duarte added. "Institutional investors can be risk averse but they do want to build up a greener portfolio. The CTF offers a unique opportunity for them and will allow us to provide developing countries the financial support they need to pursue their low-carbon development plans."
The green-light came as recipient countries unanimously endorsed the CIF as a key vehicle to deliver on the ambition outlined in the Paris climate agreement. Members emphasized the importance of tested and proven financing options to support climate actions in developing countries and that those lessons should be shared with all main players in the climate finance architecture. “The appreciation and wide-spread support for the CIF by developing country members need to be acknowledged”, said Zaheer Fakir, Committee member for the South African Department of Environmental Affairs. “Developing countries within the CIF value it as an important instrument for financing, innovating and coordinating with all important actors around national climate investment plans.”
In this context, trust fund sub-committees decided to support the forest investment plans of Mozambique and Côte D’Ivoire with US$ 48 million in total which will allow the countries to address major drivers of deforestation as well as promoting rural development. Another decision supported the renewable energy investment plan of Cambodia with US$ 30 million enabling the country to develop a solar energy program, including rooftop solar systems and minigrids, as well as a biomass power project.
About the Climate Investment Funds: The US$ 8.3 billion Climate Investment Funds provides 72 emerging and developing economies with urgently needed resources to manage the challenges of climate change and reduce their greenhouse gas emissions. For more information: http://www-cif.climateinvestmentfunds.org/
Media contact: In Washington D.C – Angela Bekkers, Climate Investment Funds | Tel: +1 202 458 8831; mobile: +1 202 361 3459, Email: firstname.lastname@example.org
Download press release: English
OAXACA - 12th June 2016 - This week Mexico is hosting the Climate Investment Funds’ governing body meetings as well as a knowledge exchange forum of the CIF’s forestry program. The meetings in Oaxaca bring together an audience of over 150 experts from about 50 countries, including representatives of developing and donor countries, international organizations and civil society.
The official opening took place today, June 12, and included a welcome address by Mafalda Duarte, Manager of the Climate Investment Funds. “Mexico is a very fitting stage for these very exciting knowledge sessions. We have many countries in this meeting that offer valuable experiences about the sustainable use of forestry resources”, Duarte said, thereby referring to the $775 million Forest Investment Program (FIP) which is a funding window of the CIF and provides direct investments to benefit forests, development and climate.
The Mexican Government is presenting its community experiences in sustainable forest management to the 23 countries that make up the Forest Investment Program (FIP). Mexico was chosen in 2011 as a pilot country and has received 60 million dollars for four forestry projects.
“With the Forest Investment Program’s resources, matched by other funding sources of, for example, the World Bank, Mexican forestry communities have benefited from training and technical studies for forest land-use and land management”, said Jorge Rescala Pérez, Director-General of Mexico’s National Forestry Commission of Mexico (CONAFOR), during the opening session.
During this week’s meetings, the governing body of the CIF will decide on the future strategy of the funds. Other key issues concerning CIF’s Clean Technology Fund, its climate resilience fund (PPCR) and renewable energy program in low-income countries (SREP) will be discussed later this week. For the CTF, innovative ways to mobilize capital of institutional investors will be discussed. This would open up new investments into frontier areas, such as energy storage, distributed generation, sustainable transport, and residential and industrial energy efficiency, where an additional push could accelerate market development. Investment plans of Mozambique and Bangladesh, including funding envelopes, will be featured in designated committee meetings on forestry management and renewable energy, respectively.
Kenya has received Sh2.9 billion boost to finance its drive for geothermal energy production in the Rift Valley.
The funding from the Climate Investment Funds' Clean Technology Fund (CIF-CTF), is a concessional loan secured with support from the African Development Bank (AfDB).
With African Development Bank (AfDB) support, Kenya has received approval from the Climate Investment Funds’ Clean Technology Fund (CIF-CTF) for a US $29.65-million concessional loan to co-finance up to two geothermal projects to increase the country’s power capacity, particularly drawing on untapped geothermal resources in the Rift Valley.
Morocco has switched on what will be the world's largest concentrated solar power plant.
The new site near the city of Ouarzazate -- famous as a filming location for Hollywood blockbusters like "Lawrence of Arabia" and "Gladiator" -- could produce enough energy to power over one million homes by 2018 and reduce carbon emissions by an estimated 760,000 tons per year, according to the Climate Investment Funds (CIF) finance group.