8 March 2018: 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. [GCF Board Meeting Press Release] [GCF Board 2018 Co-Chair Bios] [GCF Board Meeting Documents] [GCF Press Release on Deputy Executive Director] [SDG Knowledge Hub Story on Outcomes of GCF Board Meeting]

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.” [World Bank Press Release] [IISD RS Coverage of WUF9]

Under a strategic partnership for sustainable maritime transport, the EBRD and IMO will work to support governments in implementing frameworks for a “fair, effective and sustainable maritime industry.”

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. [NDF Press Release] [ACRIS III Agenda]

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. [EIB Press Release]

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.” [EBRD Press Release] [IMO Press Release]

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. [UNFCCC Press Release] [SDG Knowledge Hub February Climate Mitigation Finance Update]

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. [EBRD Press Release]

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. [EIB Press Release] [Financing a Sustainable European Economy]

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. [IFC Press Release]

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. [UNFCCC Press Release] [SCF Call for Evidence]

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. [IFAD Press Release]

February 2018 Recommended Resources

Recommended climate finance readings from the month of February 2018 include:

• The UNFCCC Adaptation Committee’s second Adaptation Finance Bulletin, which contains a selection of news and updates from the GCF, GEF, Adaptation Fund, and UNFCCC constituted bodies working on adaptation [UNFCCC Adaptation Committee Bulletin];
• Adaptation Fund country videos [Adaptation Fund Video on Costa Rica] [Adaptation Fund Video on Georgia];
• A study by the UN Development Programme (UNDP) and the Latin American and Caribbean Climate Finance Group (GFLAC) on adaptation finance in six countries, which finds that more funds have been directed towards mitigation than adaptation [Review of Domestic Data Sources for Climate Finance Flows in Recipient Countries] [SDG Knowledge Hub Story];
• An SDG Knowledge Hub guest article, titled ‘Four Steps to Build the SDGs into the Green Climate Fund,’ which proposes using funding proposal templates, developing new investment criteria indicators, integrating the SDGs in new social and environmental policies and readiness support for alignment [SDG Knowledge Hub Article on Four Steps to Build the SDGs into the Green Climate Fund];
• A report from the IFC-supported Sustainable Banking Network, which finds that 34 emerging economies accounting for US$42.6 trillion in bank assets have all made progress in advancing sustainable finance [IFC Press Release] [IFC/SBN Report]; and
• A report by the Climate Bonds Initiative, titled ‘Nordic and Baltic Public Sector Green Bonds,’ which reports steady growth: total issuance up 70% compared to 2016 and 11 times higher from market inception in 2013 [Climate Bonds Initiative Press Release] [Nordic and Baltic Public Sector Green Bonds].

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The SDG Knowledge Hub publishes monthly climate finance updates, which largely focus on multilateral financing and cover, inter alia, mitigation and adaptation project financing news and lessons, institutional events and news, and latest developments in carbon markets and pricing. Past IISD climate finance updates can be found under the tags: Finance Update: Climate Change; and Finance Update: Sustainable Energy.