The FINANCIAL -- The Green Climate Fund is allocating US$ 378 million to support green investments by the European Bank for Reconstruction and Development (EBRD) under the Bank’s Green Economy Transition (GET) approach aimed at reducing emissions and combatting climate change. This is the Fund’s largest approval to date.
The Green Climate Fund was created in 2010 under the United Nations Framework Convention on Climate Change (UNFCCC). It allocates its resources to low-emission and climate-resilient projects and programmes in developing countries.
The contribution to the EBRD will be made in support of sustainable energy financing facilities the Bank is offering in Armenia, Egypt, Georgia, Jordan, Moldova, Mongolia, Morocco, Serbia, Tajikistan and Tunisia. These frameworks provide loans and technical assistance to partner financial institutions for on-lending to invest in energy efficiency, renewable energy and climate resilience projects in the industrial and residential sectors. The government of Korea has pledged an additional US$ 3 million for technical support associated with the programmes, according to EBRD.
The programmes, which will have an overall value of more than US$ 1.4 billion in the 10 countries, are expected to leverage a five-fold additional financing by participating private sector banks to reduce greenhouse gas emissions by about 2 million tonnes a year.
They are expected to finance over 20,000 sub-projects to create employment opportunities through vocational training and enhance financial institutions’ capacity to provide financial products for investments in energy efficiency.
The EBRD has been investing in sustainable energy efficiency facilities for 10 years as part of its Sustainable Energy Financing Initiative, the predecessor of the Green Economy Transition approach. Under GET the Bank aims to raise the volume of green financing up to 40 per cent of the Bank’s annual business investments by 2020.
Josué Tanaka, EBRD Managing Director, Energy Efficiency and Climate Change, said: “This is a massive endorsement and significant boost of our activities. We are honoured and humbled by the Green Climate Fund’s very significant contribution and we can guarantee that we will make the best use of it for the benefit of the economy, the environment and the citizens of the countries where we will be able to roll out new frameworks.”
The decision by the Green Climate Fund was made in the lead-up to the COP 22 negotiations in Marrakesh in November about the implementation of the Paris Accord last year in globally reducing greenhouse gas concentrations in the atmosphere. Multilateral donors such as the Green Climate Fund play a crucial role in achieving these targets.