CAPE TOWN, 1 July 2011 – The Climate Investment Funds (CIFs), a partnership of five multilateral development banks, approved $444 million in grants and near-zero-interest loans to support Cambodia, Mozambique, Nepal, St. Lucia, and Zambia in their efforts toward national-level climate resilience. Also in Cape Town two new investment plans were endorsed for Burkina Faso and Democratic Republic of Congo for a total of $90 million in grants.
Under the CIFs’ Pilot Program for Climate Resilience, five nation-wide strategic programs for climate resilience were approved: $105 million for Cambodia to improve irrigation, flood and drought management, climate-resistent agriculture and forestry in coastal areas, and mainstream climate resilience into development planning; $102 million for Mozambique to improve the capacity of roads and coastal cities to withstand climate change, transform their hydro-meteorological services, and enhance climate-resilient agricultural production and food security; $110 million for Nepal to build climate resilience of watersheds in mountain regions, build resilience to climate-related hazards, and build climate-resilient communities through private sector participation; $17 million for St. Lucia to build national climate resilience (as part of the Caribbean Regional Program); and $110 million for Zambia to strengthen climate resilience in Barotse and the Kafue River Basin.
The total $444 million funding envelope for these five countries is nearly half grants ($207 million) with $237 million in near-zero-interest credits. These countries join Bangladesh, Grenada, and St. Vincent and Grenadines as the first eight countries in the world to create Strategic Programs for Climate Resilience (SPCRs) linked to their development plans with CIF support.
“The CIF's Strategic Climate Fund gives priority to highly vulnerable least developed countries, including the small island developing states. As momentum grows for climate action on the ground, the CIFs can be a real game-changer," said Admed Shafeeq Ibrahim Moosa, the Presidential Envoy for Science and Technology from the Maldives, and co-chair of the CIF’s Strategic Climate Fund, at the end of the first week of meetings.
Under the CIF’s Forest Investment Program, two new investment plans were endorsed: $30 million in grant funding for Burkina Faso to decentralize sustainable forest management, encourage participatory protection of state forest reserves, and integrate information-sharing; $60 million in grant funding for Democratic Republic of Congo to address deforestation and degradation, provide small grants to promising small-scale REDD+ initiatives, and engage the private sector in REDD+.
“This week we’ve seen impressive strategic plans from the many developing countries who want to partner with the Climate Investment Funds. Now even more countries are queuing up. At this point, nearly all CIF funds have been allocated and as we press forward on implementing these important projects, we are seeing a need for additional financing – at least to cover the gap between today and when the Green Climate Fund is fully operational,” said Andrew Steer, World Bank Special Envoy for Climate Change.
During the Clean Technology Fund meetings, the Government of India expressed interest in submitting an Investment Plan soon. Despite a current shortage of funds, the Climate Investment Funds have invited India to prepare an Investment Plan that will be reviewed in November 2011.
“We estimate that current programs in the Clean Technology Fund will result in 1.56 billion tons of CO2 reductions or avoidance. If and when India partners with the CTF we will see even more dramatic CO2 reductions being financed by the Climate Investment Funds,” Steer added.
Other Recent Financing Decisions
As announced last week during the first CIF Committee Meetings, the CIFs’ Clean Technology Fund also approved $197 million for the 125 megawatt Ouarzazate I Concentrated Solar Project in Morocco, a large-scale investment that is expected to help bring down the costs of concentrated solar and create as many as 80,000 jobs in Morocco by 2020. This solar power plant is the first project in a Middle East and North Africa Regional Plan that will eventually triple today’s global investments in concentrated solar power. Morocco is partnering with the African Development Bank and World Bank, two partners in the Climate Investment Funds, on this project.
“Despite all of these efforts, the bottom line is that there is an urgent need to improve access to climate finance at the scale required for transformational impact in Africa and put in place mechanisms that can best respond to Africa’s needs,” said Bobby Pittman, Vice President for Infrastructure, Private Sector and Regional Integration at the African Development Bank.
The Morocco solar project was approved just days after the World Bank Board of Directors approved US$47.12 million under the PPCR to help Grenada and Saint Vincent and the Grenadines improve the safety of their buildings from the impacts of climate change and increase their public institutions’ capacity to assess natural risks. Rehabilitating vulnerable infrastructure is a central part of the Caribbean Regional Program and ties directly to PPCR’s focus on vulnerable countries and small island developing states.
Additional donor support to the CIFs was also pledged recently to help scale-up renewable energy in low-income countries. Norway announced a 150 million krones pledge (equal to $US 28 million) and Australia announced a pledge of 25.5 million Australian dollars (equal to $US 27 million).
The financing announcements made during the annual CIF Committee Meetings coincided with the 2011 CIF Partnership Forum, a 2-day public dialogue co-hosted by the African Development Bank and co-chaired by South Africa. Speeches were made by South African Finance Minister, Pravin Gordhan, and South African Minister of International Relations and Co-operation, Maite Nkoana-Mashabane. The Forum attracted more than 500 CIF stakeholders from 79 countries to assess progress on CIF investments, explore ways to scale-up countries’ impact on climate change, and share lessons learned.
More than 70 civil society representatives attended the event with many more participating online to discuss green jobs, biodiversity-smart planning for wind farms, and how to finance large-scale, transformative investments. The event featured sessions on private sector engagement, scientific updates, and climate modeling. Discussions were held on the significance of CIF governing bodies’ equal representation of developed and developing countries, on innovative financing, on national-level planning, and on the importance of involving a range of participants in decision-making.
“Through the CIFs we’re learning important lessons on climate action and helping inform the discussions on climate finance. It’s clear that Africa needs financing that reflects its priorities and challenges in responding to climate change,” Pittman said.
The $6.5 billion Climate Investment Funds are a global partnership of the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, InterAmerican Development Bank, and the World Bank Group.