7 June 2018
Institutional Finance Update: Gaining Clarity on How Finance and Technology Needs Inform Climate Investments
Solar Farm, US. Credit: American Public Power Association
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The EBRD launched a technology catalogue identifying high-performance technologies that are eligible for climate finance.

The UNEP-DTU Partnership issued a report confirming financial incentives as most common enabling measures for climate technology implementation in developing countries.

The New Development Bank provided a US$300 million loan for small cities sustainability project in China.

The World Bank supported Bangladesh’s adoption of cleaner technology through a US$110 million credit.

31 May 2018: The Bonn Climate Change Conference concluded with the refrain that finance and technology are crucial means to achieve international climate goals. During the month of May, several institutions acknowledged this fact and took action, including forming financial partnerships, increasing budget allocations to implement climate change policy, and identifying priority sectors with technological needs.

These steps can inform investment decisions in the production of economies. It remains to be seen whether they also solve distribution questions or answer calls for the delivery of finance and technology transfer.

EBRD Launches Technology Catalogue to Accelerate Delivery of Climate Finance, Pledges to Scale Up Activities in Support of SDGs

During the 2018 Innovate4Climate conference, held from 22-24 May in Frankfurt, Germany, the European Bank for Reconstruction and Development (EBRD) launched a technology catalogue identifying high-performance technologies that are eligible for climate finance, which supports a Green Climate Fund (GCF)-EBRD programme aiming to deliver US$1.3 billion of climate finance to ten countries.

The catalogue serves as the basis for “Technology Selectors,” which will be one of the key mechanisms for delivering climate finance under the EBRD’s Green Economy Financing Facilities (GEFFs), supported by international donors and partners, including the GCF. The GCF is providing US$378 million in co-financing and implementation support for rolling out GEFFs in Armenia, Egypt, Georgia, Jordan, Moldova, Mongolia, Morocco, Serbia, Tajikistan and Tunisia.

The EBRD pledged to scale up its activities in support of the SDGs, estimating that it could invest around €3 billion more per year.

The EBRD’s online tool provides country-specific directories of vendors that offer climate technologies, such as energy efficiency and renewable energy technologies, to businesses and homeowners. The goal is to encourage technology manufacturers and local vendors to make climate technologies more easily available on the ground. To achieve this, it identifies technologies eligible for financing under the EBRD’s GEFF, provided by local partner banks, leasing companies and microfinance institutions. The tool can also can promote cross-border trade in EBRD countries through the Green Trade Finance Programme. [EBRD Web Tool for Climate Technologies]

At the EBRD 2018 Annual Meeting and BusinessForum, the Bank pledged to scale up its activities in support of the SDGs, estimating that it could invest around €3 billion more per year. [EBRD Annual Meeting 2018] [EBRD Press Release]

The GCF held a four-day workshop on empowering direct access in Songdo, Republic of Korea, to assist Direct Access Entities (DAEs) to develop GCF-supported climate projects that spur low-emission and climate-resilient development. [GCF Press Release]

UNEP-DTU Partnership Highlights Climate Technology Needs in Developing Countries

A report by the partnership between the UN Environment Programme (UNEP, or UN Environment) and the Technical University of Denmark (DTU) (UNEP-DTU Partnership), published in May, analyzes climate technology needs, priorities and barriers in 21 developing countries based on the Technology Needs Assessments (TNAs) and Technology Action Plans (TAP) that they prepared in the last four years.

Countries undertake TNAs, a formal process under the UNFCCC established in 2001, to facilitate the implementation of prioritized climate technologies and build national capacity. They receive financial support from the Global Environment Facility (GEF) and implementation support from UNEP and the UN Development Programme (UNDP). This assessment exercise precedes and informs a country’s TAP, a plan for the uptake and diffusion of prioritized technologies that will contribute to the country’s sustainable development, and climate change mitigation and adaptation. Specifically, TAPs identify actions needed for successful technology implementation, demonstrate technology viability, and serve countries to develop technology investment proposals, which can be considered for funding by potential public and private funders.

In its report, UNEP-DTU Partnership shows that developing countries’ need for technology is particularly large within the energy, agriculture and water sectors. Some of their priorities have changed, with monitoring and modelling in the water and coastal zones sectors receiving more attention than previously. Within the transport sector, the highest priority technologies are electric vehicles, traffic management and public transportation.

The report outlines barriers to getting technology transferred, diffused and taken up in a successful, replicable manner. These include economic and financial barriers as well as barriers relating to regulatory issues, technical problems, lack of awareness and lack of human and institutional capacity. With regard to overcoming some of these barriers, the analysis confirms that financial incentives are the most common enabling measures, followed by new and improved regulation and awareness programmes. [Summary of Country Priorities: Technology Needs Assessments 2015-2018] [UNEP-DTU Partnership News Story]

MDBs Support Clean Technology, Sustainable Cities, Energy Efficiency Projects in Bangladesh, China and Egypt

In May, the New Development Bank (NDB) and China signed a US$300 million loan agreement for a Chongqing Small Cities Sustainable Development Project. The project supports sustainable infrastructure development in seven small cities in the municipality through sub-projects on urban infrastructure, transport, ecological restoration and capacity building.

The EBRD provided a US$200 million loan to support modernization of Egypt’s oil industry. Investments focus on energy efficiency and refurbishment of the oil refinery owned by Suez Oil Processing Company, a fully-owned subsidiary of the Egyptian General Petroleum Corporation. The investment aims at improving the plant’s operational performance and carbon footprint, with targets of a direct reduction of over 295,000 tonnes of carbon dioxide equivalent (CO2eq) each year and estimated yearly savings of 300,000 MWh of energy and 384,000 m3 of water.

Bangladesh received a US$110 million credit from the World Bank International Development Association (IDA) to support the employment of cleaner technologies in the country. The credit, with a 38-year term including a six-year grace period and a service charge of 0.75%, is for a Sustainable Enterprise Project. The project’s objective is to enable 20,000 microenterprises to adopt environmentally friendly technologies and practices in manufacturing and agribusiness sectors, thereby reducing pollution and climate change vulnerability. It will promote basic safety standards, certify eco‐labeled products, and introduce new, resource‐efficient technologies. [New Development Bank Press Release] [EBRD Press Release] [World Bank Press Release]

May 2018 Reading List

Suggested institutional climate finance-related readings include:

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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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