The Green Climate Fund (GCF) will start funding its largest climate finance investment to date following an agreement signed with the European Bank for Reconstruction and Development, the EBRD said on November 14.
The GCF-EBRD Sustainable Energy Financing Facilities programme spans three regions and directs new climate finance flows to Armenia, Egypt, Georgia, Jordan, Moldova, Mongolia, Morocco, Serbia, Tajikistan and Tunisia.
According to the EBRD, the GCF is contributing $378 million to this $1.4 billion programme to support thousands of individual investments in technologies that reduce emissions and enhance resilience to climate change.
EBRD President Suma Chakrabarti praised the agreement on the GCF-EBRD co-financing programme, saying it represented a continued strengthening of the partnership between the GCF and the EBRD, and a further endorsement of the Bank’s Green Economy Transition approach. “The programme helps the EBRD support the promotion of green investments by local financial institutions, increasingly integrating climate technologies into day-to-day financing decisions,” he said. “The GCF’s grants help to ensure the very highest standards in the projects that are rolled out.”
Building on EBRD market studies and pilot financing activities in the target countries, the programme can now establish new financing facilities with local financial institutions. Subsequently, these facilities can support private sector investment in high performance climate technologies, including renewable energy, energy efficiency and climate adaptation measures, such as improving water management.
GCF Executive Director Howard Bamsey hailed the signature of the Funded Activity Agreement for the Fund’s largest project, saying this was a demonstration of how GCF is currently increasing the scope its climate finance deployment. “GCF has marked 2017 as a year of implementation, and projects such as this one are helping the Fund push a paradigm shift in supporting new, sustainable business practices,” he said. “This project is particularly important both for its broad financial scale, and its social depth – right down to the grassroots level – supporting investments in micro, small and medium enterprises, and at the household level.”
The Sustainable Energy Financing Facilities project will provide credit lines to open up new financing paths and new markets of sustainable development for people pursuing climate investments in Africa, the Asia Pacific and Eastern Europe.
The EBRD has scaled up its climate finance activities as part of a pledge made in the run up to the Paris Agreement in 2015. Under its Green Economy Transition approach, the EBRD has a target of dedicating 40 per cent of its annual investments to green finance by 2020. It is well on the way to meeting this objective.
GCF was set up by 194 countries which are parties to the United Nations Framework Convention on Climate Change (UNFCCC) in 2010 to deliver equal amounts of funding to mitigation and adaptation initiatives in developing countries.