Scotland has doubled its investment in the Climate Trust Fund Offshore Wind Accelerator.
The German federal government has offset business travel emissions.
IDB has provided financing for wind and solar energy in Latin America.
The World Bank has supported rooftop solar in Gaza.
9 August, 2017: Recent developments in climate mitigation finance include national initiatives on offsets and research and development, new and innovative financing for renewables issued by the Inter-American Development Bank (IDB), and a World Bank-supported solar rooftop initiative to address the energy crisis in Gaza.
Scotland Boosts Offshore Wind Research and Development
The Scottish Government announced a £1.5 million funding contribution to the Carbon Trust’s Offshore Wind Accelerator (OWA) to support innovation in offshore wind technology, reduce costs, and stimulate further investment. The contribution follows a previous £1.5 million investment by the Scottish Government in 2016 that supported the launch of OWA’s ‘European Phase.’ Established in 2008, the OWA aims to accelerate the development and deployment of offshore wind energy by reducing costs, overcoming barriers to adoption, and supporting the development of industry standards and best practices. [Scottish Government Press Release][Carbon Trust News Release][Offshore Wind Accelerator Website][ClimateAction News Release]
German Federal Government Seeks CERs for Climate-neutral Business Travel
The German Government has issued a tender call to purchase for cancellation more than 235,000 Certified Emission Reductions (CERs) to offset the emissions caused by the federal government’s business travel in 2016. The call is part of the government’s ‘Avoid and Reduce Offset Strategy,’ which aims to avoid emissions from business travel to the extent possible and offset unavoidable emissions through the purchase of CERs from high-quality projects under the Clean Development Mechanism (CDM). The call states that eligible CDM projects must: include an additional Gold Standard certification; be embedded in the host country’s climate change policies; and promote small programmatic projects, if possible from least developed countries (LDCs). [UNFCCC Press Release][UmweltBundesamt Press Release][UmweltBundesamt Tender Call][Factsheet: the German Federal Government’s Business Trips are Climate-neutral]
Novel and New Mitigation Financing in Latin America
IDB announced two financing initiatives through its private sector arm, the Inter-American Investment Corporation (IIC). In Uruguay, IIC has closed a B-bond issue to finance the operation of the Campo Palomas wind farm. With a maturity of 19.5 years, the US$135.8 million issue complements an earlier A-loan granted by IIC in partnership with DNB Bank ASA (Norway), for the construction of the wind farm. In its press release, IDB states that this successful combination of an A-loan and a B-bond shows how “IIC can mobilize funding from institutional investors into Latin American renewable infrastructure assets through innovative structures and distribution methods.” [IDB Press Release. Uruguay]
In Mexico, IIC has signed a US$75 million loan package to finance the design, construction and operation of a twin solar power plant. The Solem Solar Photovoltaic Power Plant will have a combined capacity of 350MWp, making it the largest renewable energy project in Latin America. It is also the first to be financed under a new long-term auction system implemented by the Mexican government as part of its 2014 energy reform. The power plant will supply up to 800GWh of energy per year, reducing Mexico’s emissions by 340,000 tons of CO2. [IDB Press Release. Mexico]
In related news, IDB also announced that is has provided technical support for the first green bond issue in Colombia for projects that mitigate impacts of climate change and improve environmental performance. The COP200 billion (approximately US$67 million) bond is issued by Banco de Comercio Exterior de Colombia SA, Bancóldex and will be available through the Colombian Stock Exchange. IDB provided technical support in structuring the bond issue and training of bank employees. The proceeds from the bond will support financing of projects contributing to climate mitigation, such as sustainable construction, cleaner production, energy efficiency and renewable energy. In its press release, IDB also notes that the emission was 2.5 times oversubscribed with a total demand of COP510 billion. [IDB Press Release. Colombia]
Tackling Gaza’s Energy Crisis with Rooftop Solar
To address the persistent energy crisis in Gaza, the World Bank has entered into a partnership with the Gaza Electricity Distribution Company and the Palestinian Authority to support the implementation of a US$2.5 million pilot project for the installation of solar rooftop systems. The programme will support the installation of solar PV systems on 1,000 homes and 10 hospitals in the region for a total capacity of 2MW. The project aims to engage the private sector and is designed to scale up rapidly during subsequent phases. It was initiated based on a World Bank-led feasibility study, which found that up to 150MW of Gaza’s expected 900MW peak electricity demand could be generated through solar energy inside Gaza. [World Bank Voices and Views. Blog Post][Feasibility Study: Securing Energy for Development in West Bank and Gaza – Summary Report][ClimateAction News Release]