Adaptation
Building resilience
to climate change
 
Mitigation
Moving towards
low carbon societies
 
REDD+
Reducing Emissions
from Deforestation
and forest Degradation
Finance
New finance models
for the green economy
 
 
 

Bilateral Financial Institutions Channelling Euro 8 Billion into Funding Climate Change Projects
10/ 12/ 2009

Bilateral Financial Institutions Channelling Euro 8 Billion into Funding Climate Change ProjectsCopenhagen, 10 December 2009- Bilateral Financial Institutions or BFIs are investing far more in climate change actions in developing countries than many may presume.

A new study, released to day at the UN climate convention meeting, shows that the BFI's of France, Germany, Japan and the European Investment Bank alone invested funds worth around Euro 8 billion in climate related activities in 2008.

The study, commissioned by the UN Environment Programme (UNEP), has been undertaken by the Stockholm Environment Institute SEI.

The findings have implications for the financial architecture of any outcome in Copenhagen and further highlight that in order to combat climate change, it will be key to mobilize all institutions?be they multilateral or bilateral-under the guidance of the UN Framework Convention on Climate Change.

Achim Steiner, UN Under-Secretary General and UNEP Executive Director, said "The findings underline how development aid is becoming increasingly climate aware. An agreement in Copenhagen needs to generate substantial and additional funds to assist developing economies adapt and to move towards a low carbon development path".

"The fact that BFIs of some major countries are already investing significantly in climate, as part of their development activities, can act as a good foundation upon which the additional investments can build"

The study looked at financial flows from France's AFD, Germany's KfW and Japan's JICA as well as the EIB.

It found that in 2008, the total climate change-related finance disbursed by these institutions was approximately ?8 billion. This can be divided into approximately ?5.8bn for mitigation and ?2.2bn for adaptation.

The BFIs were amongst the first to finance climate actions in developing countries, and their commitments in this field have continued to increase over recent years.

Their flows are channelled though a wide range of instruments including debt, equity, credit lines and grants.

The study indicates that the principle objectives for the BFIs are to match the most appropriate instruments with local conditions and thereby maximise the effectiveness of the financial flows that they manage while assisting countries define their own climate change policies and to create and catalyse funds from the private sector.

In regional terms, a significant proportion (60%) of BFI spending on climate finance is directed toward Asia and Oceania.

Lesser but still sizable amounts are disbursed to North Africa and the Middle East, Eastern Europe and Sub-Saharan Africa.

Even in Least Developed Countries, these institutions can both finance development and poverty alleviation, and tackle climate change, through a range of mitigation and adaptation actions.

Similar figures from other financial institutions are difficult to find, but the various estimates cited in this study suggest that finance for mitigation (excluding carbon finance) delivered by four major Multilateral Funding Institutions ? the World Bank, Inter-American Development Bank (IDB), Asian Development Bank (ADB) and European Bank for Reconstruction and Development (EBRD) ? in 2007 was around ? 3-4 billion.

AFD, KfW, JICA and EIB are also developing tools and methods to systematically estimate the carbon impact of the projects that they finance.

Notes to Editors
Bilateral Finance Institutions and Climate Change: A Mapping of Climate Portfolios can be found at www.sei-international.org

For More Information Please Contact Nick Nuttall, UNEP Spokesperson and Head of Media, on Tel +41 79 596 5737 or E-mail:nick.nuttall@unep.org

Further Resources
UNEP Division of Technology, Industry and Economics
UNEP Finance Initiative
COP 15 Website
Seal the Deal! Sign the Climate Petition
COP 15 Updates
Bilateral Finance Institutions and Climate Change:
A Mapping of Climate Portfolios
UNFCCC Official Site