From the world’s largest solar power program in North Africa to the greening of Mexico’s buses, more than 40 developing countries have now undertaken climate action with the support of the six billion dollar Climate Investment Funds (CIF).
Joined last week in Cancun by President Felipe Calderon of Mexico, the multilateral development bank (MDB) presidents heralded the two year old Funds as a path-breaking climate partnership.
Noting the rapid progress made, the presidents signaled that this engagement by developing countries creates an unprecedented opportunity for scaling up the response globally on climate-smart approaches to development.
At a time of constrained donor resources, these funds have proven that they can generate robust financial leverage. Every $1 invested in the $4.4 billion Clean Technology Fund, a major CIF component, is projected to attract $8 in co-financing from the MDBs, governments, the private sector and other development partners. In other words, it will leverage an additional $35 billion resulting in some $40 billion for clean energy investment, with 30% from the private sector.
Climate Investment Fund – World Bank
Luis Alberto Moreno of the Inter-American Development Bank, Haruhiko Kuroda of the Asian Development Bank and Robert B. Zoellick of the World Bank Group – three of the five CIF partners, along with the African Development Bank and the European Bank for Reconstruction and Development – laid out facts showing that developing countries are setting their own national and regional solutions in motion both for mitigation and climate resilience, in the face of political, financial and technical uncertainty and urgent country need.
“When we undertook this partnership two years ago, we wanted to address an urgent financing and knowledge gap that our client countries in the developing world were facing. We hoped that the CIF would serve as a springboard for these countries to get crucial support for greening their economies and building resilience to climate change,” said Zoellick of the World Bank Group, which serves a tripartite role as Trustee, administrator and an implementing agency for the CIF. “But the rapid engagement by such a wide span of countries in every region of the world has reached beyond our expectations. I believe that in the coming years we will see many of these countries – some of them among the poorest and least developed in the world –creating solutions that reshape the way we approach climate-smart development on a global scale.”
At the event hosted by President Calderon, high level representatives from Mexico, Morocco, and Zambia, three of the 45 CIF partner countries, demonstrated how they are transforming their economies and creating solutions which can be picked up by other countries and regions around the world.
Actions they presented include:
- a far-reaching energy efficiency and renewables plan offering climate-friendly transport and energy use in cities across Mexico;
- a region-wide plan in North Africa and the Middle East to supply electricity to citizens in the region through the world’s largest concentrated solar power generating program; ands
- one of the world’s first national plans to create country-wide climate resilience through improved livestock production and harvesting/storage systems, and increasing the contribution of agricultural crop to carbon sequestration.
“The Climate Investment Funds are an effective mechanism to reach our ambitious goals of climate change mitigation and adaptation in Latin America and the Caribbean. Building on this experience, we now need to bolster its innovative and collaborative approach”, said President Moreno of the Inter-American Development Bank. “The Eurus wind farm here in Mexico and the Strategic Programs for Climate Resilience that are being developed in the Caribbean and in Bolivia are examples of successful collaboration between governments, the private sector, and the multilateral development banks.”
The multilateral development bank partnership is building a robust institutional capacity at both global and regional levels to leverage significant amounts of financial and knowledge support. The partnership is in line with the findings of the recently released Report of the United Nations Secretary-General’s High-level Advisory Group on Climate Change Financing. It noted that the MDBs can bring a “significant multiplier role and capacity to leverage additional green investments,” delivering up to “US$30 billion to US$40 billion in gross capital flows and significantly more by fostering private flows”, and recommended that the banks “should be strengthened through additional resources in the course of the next decade.”
The partnership is also leading the banks to reconsider how they manage and harmonize their internal business processes. This will enable them to more readily and transparently share data, knowledge and information across their own internal operations and, most important, with client countries.
“It is extremely important to continue the successful path of the Climate Investment Funds, which provide a workable solution to the intermediate climate change financing needs of developing countries,” said President Kuroda of the Asian Development Bank. “The CIFs are the newest and perhaps best example of how we, as multilateral partners, can effectively channel concessionary climate financing to developing countries. Above all, they embody the spirit of partnership that we all must demonstrate if we are to solve this global challenge to our collective future.”
As part of the event, the banks released the 2010 CIF Annual Report, which outlines the early work to implement the two-year old initiative.
In their joint foreword to the report, the presidents wrote: “The design of these funds presents a new model for transparency, cooperation, and scaling-up climate action …The unique governance structure fosters inclusion and consensus-based decision-making. An equal balance of developed and developing countries are represented on the governing bodies and a broad array of institutional, civil society, private sector, and indigenous stakeholders actively participate as observers.”
About the Climate Investment Funds
The Climate Investment Funds provides a unique financing instrument designed to support low-emissions and climate-resilient development through scaled-up financing channeled through the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, and the World Bank Group.
For more information, please visit www.climateinvestmentfunds.org