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Africa to Receive $1.1 billion in New Financing for Climate Action

News Release No:2010/124/SDN

Contacts 
In Barcelona: Robert Bisset +1 202 415 9646
rbisset@worldbank.org
In Washington: 
Roger Morier (202) 473-5675
rmorier@worldbank.org
Jeff Brez (202) 458-7628
jbrez@worldbank.org

 

Barcelona, 5 November, 2009— African efforts to invest in clean energy and prepare for the devastating consequences of climate change have received a boost with six countries set to receive $1.1 billion in new financing for climate action.  From solar water heaters to wind power development and development policy planning, a range of new, scalable investments were given the green light at Trustee meetings of the Climate Investment Funds (CIF) in Washington.

 

Mozambique, Niger and Zambia will each receive up to $50-70 million in additional resources to help transform their economies through climate resilience.  While, Morocco and South Africa will join Egypt in receiving very low-interest loans for $150 million, $500 million, and $300 million respectively, to strengthen their investments in clean energy in support of national priorities for low carbon development.

 

“The CIF support for Africa is coming at a critical time.  Climate change has the potential to turn back the clock on hard won development gains across the continent,” said Katherine Sierra, Vice President of Sustainable Development at the World Bank.  “CIF financing is teaching us how to work together with governments, civil society and the private sector to make truly transformational investments a reality. Each CIF dollar so far is leveraging an additional ten dollars in private and public investments,”she said.

 

The Climate Investment Funds are a unique pair of financing instruments designed to test what can be achieved to initiate transformational change towards low-carbon and climate-resilient development through scaled-up financing channeled through the Multilateral Development Banks.  The two funds are the Clean Technology Fund (CTF), financing scaled up demonstration, deployment and transfer of low-carbon technologies for significant greenhouse gas reductions within country investment plans; and the Strategic Climate Fund (SCF), financing targeted programs in developing countries to pilot new climate or sectoral approaches with scaling-up potential.

 

In Africa, where access to energy is critical for economic growth and, therefore, poverty alleviation, the challenge is to help countries obtain the energy they need, without aggravating climate change. 

 

South Africa will receive $500 million from the CTF to support its goals of generating four percent of the country’s electricity needs from renewable energy by 2013, improving energy efficiency by 12 percent by 2015 and providing 1 million households with solar water heating over the next five years.  In support of the government’s strategies, the CTF financing will focus on scaling up grid-connected solar thermal power, utility-scale wind power development, solar water heaters, and demand-side energy efficiency.  It is expected that the new investments will mobilize additional financing of about 1$ billion from bilateral and multilateral funders, as well as the private sector.

 

Morocco will receive $150 million from the CTF to help establish a national “Fond de Developpement de l’Energie (FDE - Energy Development Fund), a funding mechanism which will serve as a central pillar of the government’s strategy to enhance energy security and pursue low-carbon growth.  With CTF support, it is expected that the FDE will mobilize additional financing in the range of $1.5 - 2 billion to help meet the country’s goals, including a 600% increase in wind power and a 15% reduction in energy use in buildings, industry, and transport by 2020.

 

Egypt will use the $300 million from the CTF to support relevant sector development policies and strategies, such as the Power Sector Strategy and Greater Cairo Urban Transport Strategy.  In particular, the financing, endorsed by the CTF Trust Fund Committee earlier this year, will be used to develop wind power and low carbon urban transport systems.

 

Mozambique, Niger and Zambia all share dramatic risks in potential loss of land, life and livelihoods as a result of climate change. They will each receive up to $50-70 million in grants and/or very low interest loans to help integrate climate risk and resilience into their core development planning.  They have been  selected as pilot countries for the SCF’s Pilot Program for Climate Resilience (PPCR), which is still in early stages of implementation. Each country has demonstrated both the urgent need for resilience strategies and the commitment to rigorously integrate such strategies into their overall poverty reduction and development plans, including through national adaptation program of actions.

 

In Africa, the African Development Bank and the World Bank Group jointly implement the CIF, in cooperation with governments, United Nations and other partners.

 

Agreed in 2008, donor countries have pledged over US$6 billion to the CIF.  The CTF and SCF trust fund committees have equal representation from developed and developing countries.  Recognizing the imperative of climate change deliberations underway in the UN Framework Convention on Climate Change, the CIF were designed as an interim measure to strengthen the global knowledge base for low-carbon and climate-resilient growth solutions.

The CIF, implemented jointly by the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, International Finance Corporation, and World Bank, is comprised of the CTF to provide scaled up financing for the demonstration, deployment and transfer of low carbon technologies that have a significant potential for long-term greenhouse gas emissions savings; and the SCF, a suite of three targeted programs to pilot new approaches to climate action, each with potential for scaled up, transformational action: the Pilot Program for Climate Resilience (PPCR), the Forest Investment Program (FIP) and the Program for Scaling Up Renewable Energy in Low Income Countries (SREP).

For more information, please visit www.climateinvestmentfunds.org

 

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