In Washington: Amy Stilwell (202) 458-4906
Roger Morier (202) 369 1852
WASHINGTON, May 23, 2008 – Representatives of 40 developing and industrialized countries have reached an agreement to create two international investment funds that will provide innovative financing for developing countries to pursue cleaner development paths and protect themselves from the impacts of climate change.
The agreement came Thursday after a two-day meeting in Potsdam, Germany, where the two proposed Climate Investment Funds (CIF) were discussed with donor and developing countries.
“Climate change is happening here and now and this initiative will provide crucial support to developing countries to bridge the gap to 2012,” said Gareth Thomas, Minister for Trade and Development for the United Kingdom, which would be one of the principal donors to the funds. “Rich and poor countries have come together to collectively match urgency with action – the common path agreed in this meeting will enable developing countries to use their expertise to now take this fund forward to the best advantage for their people.”
Naoyuki Shinohara, Japan’s Vice Minister for International Affairs, Ministry of Finance, added that "Japan wholeheartedly welcomes the significant progress made towards the establishment of the Climate Investment Fund and is planning to take it up at the forthcoming G8 Finance Ministers meeting.”
Claudia Grayeb Bayata, Deputy Director General of Mexico’s Ministry of Finance, said that climate change is a priority on Mexico’s national agenda, so she welcomes “the agreement to establish the Climate Investment Funds as an innovative way to help developing countries meet this challenge.”
Donor contributions to the Climate Investment Funds will be new and additional to existing aid commitments. The overall CIF is a framework that consists of two separate funds. One is the Clean Technology Fund, designed to accelerate investments in state-of-the-art technological solutions to help developing countries mitigate the rise in greenhouse gas emissions in developing countries.
United States Under Secretary of the Treasury, David McCormick, said: "We welcome the successful discussion among donors and recipients on the Clean Technology Fund, which will pave the way for strong financial support to developing countries.”
A second fund, the Strategic Climate Fund, will help more vulnerable countries adapt their development programs to the impacts of climate change while also addressing issues of forest management and access to green energy.
Shmelis Fekadu Admasu, head of Planning and Programming at the Federal Environment and Protection Authority in Ethiopia, said: “Climate change is bringing new challenges to poor and vulnerable countries. We expect the Strategic Climate Fund to improve the way we handle the challenge of climate change and to provide input to the UNFCCC negotiations and existing funds.”
The Strategic Climate Fund would provide significant resources to build adaptative capacity in the form of grants - with the option of additional highly concessional loans where countries want them.
A critical breakthrough was agreement on how multilateral development bank assistance for strengthening the climate resilience of poverty reduction efforts can most effectively support the recently established Adaptation Fund of the Kyoto Protocol.
Richard Muyungi, Chair of the UNFCCC Adaptation Fund Board, said: “I welcome the Pilot Programme for Climate Resilience (PPCR). The Adaptation Fund Board will continue to work closely with the PPCR which will provide learning on the ground for how to scale up resources in the post 2012 regime. By that time the Adaptation Fund will be up and running and will be able to learn from the experience gained in this short term program.”
Eduardo Saboia, of the Brazilian national delegation, noted that “consultations since April have been very positive. We need to build on this and engage more developing countries. Donors and recipients ultimately have the same objectives. We will all hopefully benefit from these funds.”
The Potsdam meeting also included representatives from the multilateral development banks, the United Nations, and civil society organizations. The next step is for the CIF to be considered by the World Bank Board for approval so that the funds may be launched in the next few months.
“We are delighted at this agreement,” said Katherine Sierra, World Bank Vice President for Sustainable Development. “We have worked closely with client countries and donor partners, the Global Environment Facility, and other UN and multilateral financing agencies to develop an innovative source of financing to help developing countries in their strategies to fight climate change between now and 2012. Today’s result is a giant step forward.”
The World Bank, along with the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank, will help their client countries to access the funds.