As part of the next long-term EU budget 2021-2027, the European Commission proposed to renew the Connecting Europe Facility, with €42.3 billion to support investments in the European infrastructure networks, including for transport and energy.
The IDB, through its private sector institution, IDB Invest, and the Brazilian Development Bank announced an alliance for the creation of an infrastructure credit fund for up to US$1.5 billion.
IFC and the Government of Canada formed a partnership to use public funds to unlock much larger amounts of private funds for investment in climate solutions worldwide.
29 June 2018: The month of June 2018 saw the emergence of several sustainable infrastructure investment plans and partnerships that are summarized in this Update. Climate finance institutions reached agreement on work programmes and funding, and ministerial meetings held multilateral political discussions on enhanced climate action and cooperation.
Sustainable Infrastructure Credit Fund Launched in Brazil
The Inter-American Development Bank (IDB) Group, through its private sector institution, IDB Invest, and the Brazilian Development Bank (BNDES) announced their alliance for the creation of an infrastructure credit fund for up to US$1.5 billion. The aim of the fund is to increase financing of sustainable infrastructure in Brazil. The fund will provide loans to projects in the transport, energy, water and sanitation sectors, among others. [IDB Press Release]
EU Commission Proposes Increased Funding for Sustainable Infrastructure Investments in Europe
As part of the next long-term EU budget 2021-2027, the European Commission proposed to renew the Connecting Europe Facility, with €42.3 billion to support investments in the European infrastructure networks, including €30.6 billion for transport and €8.7 billion for energy.
By strengthening the environmental dimension of the Connecting Europe Facility with the target of 60% of its budget contributing to climate objectives, the proposal seeks to help fulfill the EU’s commitments under the Paris Agreement on climate change. The proposal aims to accelerate the decarbonization and digitalization of the EU’s economy through clean mobility solutions, energy storage and smart grids. [EU Commission Press Release]
World Bank and Canada Partner to Mobilize Private Capital for Climate Investments Worldwide
The World Bank’s International Finance Corporation (IFC) and the Government of Canada formed a partnership to use public funds to unlock much larger amounts of private funds for investment in climate solutions worldwide. Canada contributed CAD250 million to the Canada-IFC Blended Climate Finance Program, reflecting Canada’s commitment under the Paris Agreement to support developing countries in their transition to sustainable and resilient low-carbon economies.
While the MDBs saw their climate finance in 2017 increase by 28%, the GEF underwent a funding cut from US$4.4 billion in 2014 to US$4.1 billion for the four-year budget from 2018.
When blended with IFC’s own investments, this financing will mobilize private capital to help overcome the challenge of climate change. IFC will use these funds to mitigate risks deterring private investment in key areas such as resilient infrastructure, climate-smart agriculture (CSA) and renewable energy. [IFC Press Release]
June Ministerials Spotlight, MDBs Report Growth in Climate Finance
Multilateral political discussions on enhanced climate action and cooperation continued in June as ministers met for the Petersberg Climate Dialogue in Berlin, Germany, and the Ministerial Meeting on Climate Action (MoCA) in Brussels, Belgium, to discuss climate finance, among other issues.
While the six largest Multilateral Development Banks (MDBs) released a joint report, showing that their climate finance in 2017 increased by 28% to a record US$35.2 billion, the Global Environment Facility (GEF) saw a funding cut from US$4.4 billion in 2014 to US$4.1 billion for the four-year budget from 2018.
GEF Council Adopts Work Program, LDCF/SCCF Council Approves Programming Strategy
Meeting in Da Nang, Viet Nam, from 24-26 June 2018, the 54th meeting of the GEF Council adopted a US$63.4 million work program comprising eight projects and one program concept.
The 24th meeting of the Least Developed Countries Fund (LDCF)/Special Climate Change Fund (SCCF) Council approved a new programming strategy and operational improvements, and Sweden announced an additional contribution to the LDCF of SEK50 million. [GEF News Story]
June 2018 Reading List
Suggested institutional climate finance-related readings include:
- A study, commissioned by the UN Environment Programme (UNEP, or UN Environment), assessesing the relationship between climate vulnerability, sovereign credit profiles and the cost of capital in developing countries. The report includes case studies from Bangladesh, Barbados, Guatemala, Kenya and Viet Nam. [Climate Change and the Cost of Capital in Developing Countries][SDG Knowledge Hub Story on the Report]
- A Climate Change Policy Assessment of Saint Lucia by the International Monetary Fund (IMF) that assesses Saint Lucia’s climate change risks and expected impacts, and presents the country’s Nationally Determined Contribution (NDC) under the Paris Agreement, along with its national strategies on resilience building, risk management and financing for mitigation and adaptation programmes. [Saint Lucia: Climate Change Policy Assessment]
- A World Bank report on climate change impacts in South Asia’s hotspots, showing effects on inland areas and gross domestic product (GDP) losses for several hotspot regions, and presenting a roadmap for climate-resilient development in vulnerable regions. [South Asia’s Hotspots: Impacts of Temperature and Precipitation Changes on Living Standards]
* * *
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.