11 January 2018
Climate Finance Institutional Update: One Planet Closes Climate Financing Year on High Note
One Planet Summit | Plenary Video
story highlights

In December 2017, the One Planet Summit and a ‘Climate Finance Day’ resulted in a high number of climate financing-related announcements.

Nigeria issued a US$26.9 million sovereign green bond, becoming the fourth country in the world to do so, after Poland, France and Fiji.

The GCF opened a call for concept notes and funding proposals in response to its pilot programme for REDD+ results-based payments.

8 January 2018: During the month of December 2017, the One Planet Summit in France, and its Climate Finance Day, delivered a number of new announcements from governments and non-state actors. New green bonds were announced by Nigeria, as well as by a bank in the Philippines and the European Bank for Reconstruction and Development (EBRD). In the Caribbean, the Green Climate Fund (GCF) held meetings in countries affected by devastating hurricanes in 2017.

One Planet Summit Accelerates Momentum

The One Planet Summit and a ‘Climate Finance Day,’ jointly convened by the Presidents of France and the World Bank Group and the UN Secretary-General over two consecutive days in Paris, France, resulted in a high number of climate financing-related announcements, both new pledges and affirmations of existing commitments. Previous SDG Knowledge Hub stories and updates have summarized the highlights. [SDG Knowledge Hub One Planet Summit Story] [SDG Knowledge Hub Mitigation Update] [SDG Knowledge Hub Story on World Bank Investment in Cities][SDG Knowledge Hub Story on LDN Fund]

In other new funding-related news, in the run-up to the One Planet Summit, eight companies launched an impact investment fund with a target of €100 million, which will aim at improving the lives of two million people and avoiding up to 25 million tonnes of carbon dioxide (CO2) emissions over the next two decades. The fund will be the second ‘Livelihoods Carbon Fund,’ with the first one operating since 2011. [UNFCCC Press Release]

Following the One Planet Summit, Brussels-Capital Region of Belgium announced a €600,000 pledge to the Adaptation Fund. The commitment raised the total of new commitments to the Fund in 2017 to US$95.5 million, translating to a significant over-achievement of the US$80 million target set for the year. [Adaptation Fund Press Release]

Green Bonds in Tailwinds

News on green bonds markets were also positive in December, with the One Planet Summit marking the announcement of the EBRD on its intention to invest up to US$100 million in ‘Amundi Planet – Emerging Green One,’ which according to the bank is “a fund designed to become the world’s largest green bond fund and the first exclusively dedicated to emerging markets.” [EBRD Press Release]

Nigeria issued a sovereign green bond, becoming the fourth country in the world to do so, after Poland, France and Fiji. The NGN10.69 billion (US$26.9 million) bond is intended as a ‘pilot sovereign,’ to be followed by a NGN150 billion green bond programme. [Climate Bonds Initiative Story]

BDO Unibank Inc. of the Philippines issued its first green bond, which also marked the first green bond issued by a commercial bank in the country. The World Bank-affiliated International Finance Corporation (IFC) is the sole investor in the bond that raised US$150 million for expanding financing for private sector investments in climate action. [IFC Press Release]

Other December Events: CIF Funds Plan Anniversary, GCF-Caribbean Meetings Spotlight Resilience, Asia Spurs Pre-2020 Action, Financing

The Climate Investment Funds’ (CIF) Clean Technology Fund (CTF) and Strategic Climate Fund (SCF) held their joint Trust Fund Committee Meetings, which discussed, inter alia, scenarios for CIF administrative costs over the next five years, preparations for CIF’s tenth anniversary in 2018 and a proposal to establish a technical support facility for investment-friendly regulation and other investment-relevant framework conditions for clean energy. [CTF-SCF Trust Fund Committee Meeting Documents]

In the wake of the damaging hurricanes that hit the Caribbean region in 2017, the GCF held meetings with its partners in Antigua and Barbuda, Dominica, Barbados, Grenada and Haiti, which included Accredited Entities, National Designated Authorities and private sector representatives. The GCF heard calls for ensuring that financing reaches the grassroots level, in particular in the area of resilience. [GCF Press Release]

The UN Economic and Social Commission for Asia and the Pacific (ESCAP) held its first Asia-Pacific Climate Week in Bangkok, Thailand, which attracted the participation of high-level officials and private sector leaders from more than 30 countries. Discussions focused on identifying ways to scale up climate action and find innovative financing solutions. The meetings delivered a ‘Regional Climate Action Agenda’ to strengthen regional cooperation pre-2020 among governments and non-state actors. [ESCAP Press Release]

The European Commission, France, the UN Environment Programme Finance Initiative (UNEP-FI), the Clean Energy Ministerial (CEM) and other partners jointly organized a conference, in Paris, France, on accelerating energy efficiency investments in buildings. The conference aimed take stock of progress in commitments by banks and investors in energy efficiency since the adoption of the Paris Agreement in 2015, and to explore ways to accelerate investments. [UNEP-FI Press Release]

Institutional News: GCF Opens Call for REDD+ Proposals

In December institutional news, the GCF opened a call for concept notes and funding proposals in response to its pilot programme for REDD+ results-based payments. The call is open for GCF Accredited Entities. [GCF Press Release on REDD+ Pilot]

The GCF signed a non-binding cooperation agreement with the China Development Bank (CDB), the world’s largest development financial institution and a major lender for China’s One Belt One Road (OBOR) initiative, for coordinating their activities in supporting climate action. The GCF also signed an Accreditation Master Agreement (AMA) with the IFC. The GCF’s Independent Integrity Unit (IIU) further signed a memorandum of understanding (MoU) with the Central American Bank for Economic Integration (CABEI) on cooperation in the area of institutional integrity and investigative activities relating to Prohibited Practices. [GCF Press Release on CDB] [GCF Press Release on IFC] [GCF Press Release on CABEI]

December 2017 Resources

A variety of policy and information resources on climate finance were released over the month of December, including:

  • A guidance note by the UN Development Programme (UNDP) on creating and refining climate change financing frameworks, designed for governments and institutions and explaining the process of creating or refining a ‘Climate Change Financing Framework’ [CFADE Press Release];
  • The European Investment Bank’s (EIB) series of green finance podcasts, which includes episodes on climate finance, environmental finance and green bonds [EIB Press Release];
  • A blog post by an IFC expert examining sovereign green bonds in light of Fiji’s launch of its bond at COP 23 [Devpolicy Blog Post];
  • A study by Stockholm Environment Institute (SEI) experts on climate finance flows to Indian Ocean and African small island developing States (SIDS), which finds that the least developed countries (LDCs) received the least finance, that three-quarters were in concessional loans, and that half of the financing targeted mitigation actions [PreventionWeb Publication Page]; and
  • A newsletter from the Climate Investment Funds’ (CIF) ‘Dedicated Grant Mechanism for Indigenous Peoples and Local Communities under the Forest Investment Program’ (DMG), which provides resources to enable indigenous peoples and local communities to strengthen their participation in REDD+ processes [DGM Digest COP 23 Edition].

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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.

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