28 September 2017
Climate Mitigation Finance Update: New Climate Action Financing Platform Launched, MDBs Report Increase in Climate Finance
UN Photo/Ariane Rummery
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The World Bank and the UN have launched an initiative to ramp up finance for climate action, fostering partnerships between public and private actors.

The 2016 Joint Report on Multilateral Development Banks' Climate Finance shows that the world's six largest MDBs increased their climate financing in developing countries and emerging economies from US$25 billion in 2015 to US$27.4 billion in 2016.

MDBs and partners have announced renewable energy projects and activities financed in Egypt, Jordan, Mongolia, the Pacific Islands, Samoa, the Ukraine and Viet Nam.

20 September 2017: Recent announcements of financing for climate mitigation activities include a new public-private climate financing platform, and renewable energy projects in Egypt, Jordan, Mongolia, the Pacific Islands, Samoa, the Ukraine and Viet Nam. The six major MDBs also announced their yearly figures for climate financing, showing an increase in 2016.

New Climate Action Financing Platform Announced by World Bank and UN

UN Secretary-General António Guterres and World Bank Group President Jim Yong Kim have launched a new platform that will convene national governments, financial institutions, private sector investors, philanthropies, and multilateral banks to identify and support transformational investments for climate action, in line with the Paris Agreement on climate change. In their announcement, the heads of UN and World Bank Group highlighted both the urgent need to accelerate and ramp up finance flows towards climate action, as well as the investment opportunities in areas such as clean energy and climate-smart agriculture.

Titled ‘Invest4Climate,’ the platform aims to connect investors with “high-impact opportunities” in developing countries, including large-scale development of battery storage, electric cars, and low-emission air conditioning. It will be supported by national finance ministers, climate thought leaders, chief executives, foundations and financial institutions, as well as senior representatives from the UN and the World Bank Group. It will not have its own funding sources but will complement existing climate and development finance initiatives and institutions.

Currently in its initial stage, the platform will be developed at the World Bank/IMF Annual Meetings, in October 2017, and at COP 23, in November, with the announcement of its first initiatives expected at the Climate Summit in Paris, in December 2017. [World Bank Press Release]

MDB Climate Financing Increased in 2016

The 2016 Joint Report on Multilateral Development Banks’ Climate Finance finds that the world’s six largest multilateral developments banks (MDBs) increased their climate financing in developing countries and emerging economies in 2016. The report estimates that climate finance amounted to US$27.4 billion in 2016, compared to US$25 billion in 2015. Of the total amount, 77% (US$21.2 billion) was allocated to climate mitigation, and 23 percent to financing for climate adaptation. Including investor co-financing, the publication estimates that total finance mobilized for climate action amounted to US$65.3 billion in 2016.

The report marks the sixth year of joint reporting on climate finance accounting by the African Development Bank (AfDB), the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank Group (IADB) and the World Bank Group. [IADB Press Release]

Viet Nam to Strengthen Solar Resource Measurement

The World Bank and Electricity of Viet Nam (EVN) have launched a solar measurement campaign, aiming to promote renewable energy in Viet Nam. A key part of the campaign is the installation of five solar measurement stations that will collect high-quality solar radiation data and lead to more accurate solar resource estimations. The data and maps will be made freely available online through the Global Solar Atlas, where they are expected to play a key role in facilitating investments towards the construction of solar power plants. Supported by the Energy Sector Management Assistance Program (ESMAP), the solar measurement campaign is part of a larger project to assess and map the energy potential of biomass, small hydropower and wind energy. [World Bank Press Release]

UNIDO and Korea Energy Agency Support Renewable Energy Solutions in the Pacific

The UN Industrial Development Organization’s (UNIDO) has signed a US$120,000 trust fund agreement with the Korea Energy Agency (KEA) to support the development of a regional renewable energy mini-grid program for the Pacific Island Countries and Territories. Supported by UNIDO, the program implementation will be led by the recently established Pacific Centre for Renewable Energy and Energy Efficiency (PCREEE). The program aims to contribute to social development and economic productivity in remote island areas to provide affordable and reliable electricity access. It will support cost-effective mini-grids in areas lacking access to electrcity, and foster energy efficient business opportunities for local industries through regionally-tailored investment programs and financial schemes. [UNIDO Press Release]

MDBs Contribute Financing for Solar Park in Egypt

The Asian Infrastructure Investment Bank (AIIB) and the European Bank for Reconstruction and Development (EBRD) will contribute financing towards Egypt’s Benban Complex, which is said to be one of the largest planned solar generation facilities in the world. The financing was tendered in the second round of Egypt’s Solar PV feed-in tariff program, which aims to enable up to 2GW of solar projects in total. As part of the complex, a 490 MW solar park will receive $210 million in debt-financing from AIIB for nine 50 MW and two 20 MW greenfield solar plants, at an expected cost of US$70-75 million and US$35-40 million each, respectively. Egypt aims to export electricity during peak hours following the completion of the solar park. [AIIB Press Release]

In related news, the EBRD has formed a partnership with Proparco, a French financial institution supporting private sector development projects in emerging economies, to provide US$116 million towards the construction and operation of two 50 MW plants within the Benban complex. The two plants mark the first of the EBRD’s plans to finance 16 projects under its US$ 500 million framework for renewable energy in Egypt, expected to deliver 750 MW of capacity. [EBRD Press Release]

ADB to Develop Solar Power in Samoa

A project in Samoa will receive a loan of up to US$2 million from the Asian Development Bank (ADB) for the development of solar energy capabilities and to increase coverage within Samoa. The Canadian Climate Fund for the Private Sector in Asia, which is administered by ADB, will provide an additional US$1 million concessional loan as well as a preparatory technical assistance grant to provide support to overcome any early technical difficulties related to solar power development in the country. Expected to be operational within six months, the project will install up to 4 MW of solar power capacity owned and operated by Sun Pacific Energy Limited (SPEL), an independent power producer (IPP) which sells power to Samoa’s state-owned utility Electric Power Corporation.

The project is the first energy deal in the Pacific under ADB’s Private Sector Operations Department (PSOD) and is also the first ADB investment supporting an IPP in the region. It aims to contribute to Samoa’s sustainable development by increasing access to affordable, renewable energy, and reduce dependence on fossil fuels through the generation of an estimated 5.5 GWh of solar power each year for the next 20 years. It is expected to result in a reduction in carbon emissions of 1644 tCO2e compared to business as usual. [ADB Press Release]

ERBD Finances Renewable Energy Projects in Jordan and Mongolia

EBRD has announced a US$65 million loan for its eighth utility-scale renewable project in Jordan, a 51 MW solar plant in the Al-Safawi area of northern Jordan. Provided to the Al-Safawi for Green Energy Public Service Commission (PSC), the loan will be equally divided between an A loan provided by EBRD directly and a B loan funded by the Dutch development Bank. [EBRD Press Release]

In Mongolia, EBRD and the European Investment Bank (EIB) have agreed to provide long-term financing towards the Sainshand wind farm with a planned capacity of 55 MW. The project will be constructed by China Machinery Engineering Corporation (CMEC) and is projected to result in a reduction of 200,000 tonnes of carbon emissions once operational in 2018. Financing from the two banks is expected to amount to EIB funding of US$47 million and EBRD funding of US$31.5 million. [EBRD Press Release]

EU and EBRD Support Initiative to Promote GHG Reduction and Energy Efficiency in Ukraine

A Ukranian project initiated by the EBRD’s Finance and Technology Transfer Centre for Climate Change (FINTECC) program, financed by the EU Neighbourhood Investment Facility, has announced winners in a competition promoting climate innovations. Implemented by the Ukrainian NGO ‘Greencubator,’ the Climate Innovation Vouchers (CIVs) project, aims to encourage Ukrainian companies to develop and improve technologies reducing greenhouse gas (GHG) emissions and improving energy consumption. The six businesses and consultancies from Kiev, Dnipro and Lviv will receive funding vouchers worth €160,000 in total for their innovations that include a billing system for electric car charging stations, hemp-based insulation materials, and an energy monitor for effective electricity consumption. [EBRD Press Release]

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