posted 30 Jul 2010 08:59 by Izabel Camargo
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updated 30 Jul 2010 09:02
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All funds and project information have now been updated as of end of July 2010. Information on Fast Start Finance pledges is also now available. For any questions, comments or inquiries, please contact the Climate Funds Update team. |
posted 2 Jul 2010 02:16 by Izabel Camargo
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updated 2 Jul 2010 06:49
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New Climate Finance Policy Brief on climate finance additionality published by ODI and Heinrich Boll Foundation, July 2010.
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posted 5 Mar 2010 02:39 by Unknown user
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updated 9 Jul 2010 09:05 by Izabel Camargo
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This is the first paper in series of policy briefs which provides an independent commentary on current themes associated with the international debate on climates finance. The papers are prepared by the Heinrich Boell Foundation and ODI for the climate funds update website.
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posted 13 Dec 2009 22:56 by Nick Scott
posted 4 Dec 2009 06:52 by Izabel Camargo
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updated 4 Dec 2009 07:16
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The website has just undergone a substantial revision in preparation for the Copenhagen COP meeting:
- 22 international funding initiatives are now fully documented and revised (with a summary table listing key attributes of each fund)
- Funding pattern graphs on amounts pledged, deposited and disbursed for each fund
- An overview diagram of the international architecture of funds
- A separate webpage on a range of proposed funds
- 834 operational climate change projects on a searchable data base
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posted 6 Aug 2009 04:04 by Izabel Camargo
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updated 11 Aug 2009 09:42
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Adaptation Fund
a. Monetization of CERs
The Adaptation Fund completed its two first sales of certified emission reductions (CERs). The first sale occurred during the third week of May 2009. 600,000 tons of CERs were sold at an average price of €12.17 per ton, totalling € 7.3 million. The second sale, which occurred during the second week of June 2009, comprised of 500,000 tons of CERs sold at an average price of € 11.46 per ton, totalling € 5.7 million. Barclays Capital was appointed as the dealer for the first sale and Bank of America Merrill Lynch for the second sale. The two sales raised a total amount of € 13 million (equivalent to US$ 18.4 millioni). The end buyers of the CERs were widely diversified across sectors and regions and included corporate carbon off-setters as well as entities complying with the European Union Emissions Trading Scheme (EU ETS).
The Adaptation Fund, which is financed by a 2% levy on CDM proceeds, may offer some lessons on the effectiveness of carbon market levies as a method for generating revenue. Different projections have been made as to the amount of revenue the Adaptation Fund is likely to receive in the first Kyoto commitment period (2008-2012). According to the UNFCCC, World Bank and UNDP, the total proceeds from the 2% levy on CERs would be between US$ 80-300 million, US$ 100-500 million, and US$ 160-950 million per year, respectivelyii. These figures vary based on price and volume assumptions (for example, the UNFCCC figure assumes 2% of total annual sales of 300-450 million CERs and a market price of US$ 24iii).
Given the price range of € 11-12 at which the CERs were recently sold, it is clear that the price is below what was originally projected (US$ 24 or €17i). In terms of volume, since the beginning of the CDM trading scheme (starting January 2008) up to August 2009, 316 million CERs have been sold (a 20 month period in total) compared to the UNFCCC’s estimate of 300-450 million annually. The Adaptation Fund’s 2% share of these 316 million equals 6.32 million CERs. Therefore, in these first two sales, the Adaptation Fund has sold 17.4% of the CERs in its possession. If the fund sells the remaining CERs for the same average price, it will raise approximately € 74.7 million (US$ 105.8 millioni) for the 20 month period, which is the equivalent to € 44.8 million (US$ 63.5 millioni) per year. This implies that both the volume and the price of CERs are below original UNFCCC projections, indicating that the overall revenue of the Adaptation Fund is likely to be lower than the UNFCCC’s projected range of US$ 80-300 million.
i. At the currency exchange rate of 11 August 2009: 1 EUR = 1.41685 US$
ii. Müller, B. (2008) International Adaptation Finance: The Need for an Innovative and Strategic Approach. EV 42. Oxford: Oxford Institute for Energy Studies.
iii. UNFCCC, (2007) Investment and financial flows relevant to the development of an effective and appropriate international response to Climate Change. Bonn.
b. Sixth Adaptation Fund Board Meeting Outcomes
The Adaptation Fund Board met for the Sixth time in Bonn, on June 15 to 17, 2009. The Board made considerable progress in evolving an institutional mechanism which would allow countries to directly access resources from the Adaptation Fund. The Board expects the complete Operational Guidelines to be adopted at the next meeting, which will be held in Bonn on September 14 to 16, 2009. The Board heard presentations by the two countries which have put forward offers to confer legal capacity and to host the Adaptation Fund Board; Germany and Barbados. A decision is expected to be taken at the next Board meeting for endorsement by the Kyoto Protocol Parties in Copenhagen. For more information visit http://www.adaptation-fund.org/pressreleases.html
GEF Least Developed Countries Fund (LDCF) and Special Climate Change Fund (SCCF)The LDCF/SCCF Council held its sixth meeting on June 24, 2009, and published the meeting documents at http://www.gefweb.org/interior.aspx?id=25480. The pledged contributions to the LDCF decreased US$ eq. 5.96 million (from US$ eq. 182.43 million as of October 2008 to US$ eq. 176.47 million as of May 2009). For full details on pledged and deposited amounts, visit the LDCF page. The pledged contributions to the SCCF increased US$ eq. 14.49 million (from US$ eq. 106.57 million as of October 2008 to US$ eq. 121.07 million as of May 2009). For full details on pledged and deposited amounts, visit the SCCF page.
Climate Investment Funds (CIFs)The CIF meetings were held in May 2009, with an SREP consultation meeting in Paris on April 29. The main outcomes were:
a. ODA issue clarified
Since CIF is a pooled multi-donor trust fund managed by the World Bank, an international development institution recognized as such by the DAC for the purpose of ODA eligibility, these contributions can be scored as multilateral ODA. The outgoing use of all CIF resources as concessional loans, grants, and guarantees through the MDBs can be reported by each MDB as ODA if: (a) it meets the criterion of promoting economic development and welfare; b) the grant element is at least 25 percent; and c) funds are to be used in a country included in DAC list of ODA eligible countries.
b. Clean Technology Fund
As reported at the CTF meeting in May, the Fund has moved into implementation phase. The investment plans for Turkey, Egypt and Mexico have been signed and endorsed, and one project has been approved. Further joint missions are underway.
- Funding commitments to the CTF: The total amount pledged by eight countries to the CTF is US$ eq. 4.7 billion as of April 15, 2009. Since the last meeting of the CTF Trust Fund Committee in January 2009, there have been no new pledged resources to the CTF.
- While the US originally pledged $2 billion to the CTF under the Bush administration, the U.S. Congress and Senate did not approve this appropriation in the US FY2009 budget. The new administration under Obama has indicated that it wants to fulfil the commitment of $2 billion dollars, but have framed it as a commitment to the Clean Investment Funds as a whole, rather than to the CTF. The Obama administration has asked for $500 million towards the CTF and $100 million for the SCF in the US FY2010 budget. However, this is subject to authorization from the Senate and the House. As of August 2009, the Senate and the House have appropriated different amounts for the CIFs in the 2010 spending bill (the legislation is called ‘the Department of State, Foreign Operations, and Related Programs Appropriations Bill, 2010’):
The house has appropriated:
- CTF - $225 million
- SCF - $75 million
The Senate has appropriated:
- CTF - $400 million
- SCF - $75 million
The differences will be reconciled later this year, and until then amounts to be directed toward the CIF will remain somewhat unclear. Given this lack of clarity, the US pledge is maintained at $2 billion, as this is what is reported by the CTF Trustees.
c. Pledge/funding status of the SCF programs
- Pilot Program for Climate Resilience (PPCR): Pledged: US$ eq. 546 Mn. Deposited: US$ eq. 95.8 million. The total funds available to support PPCR Sub-Committe’s funding decisions amount to US$ eq. 90.9 million.
- Scaling Up of Renewable Energy Program (SREP): Pledged: USD eq. 107 million. Deposited: There has been a countersigned contribution agreement with the UK - 5 million GBP has been received, with an outstanding balance of 20 million GBP.
- Forest Investment Program (FIP): Pledged: As of April 15, 2009, Australia, Norway, and the United Kingdom have made pledges to the FIP, totalling $217 Mn. Deposited: UK has deposited 88 Mn GBP out of their pledged 100 Mn GPB as of April 2009. This equates to roughly $141 Mn.
- Unallocated within SCF: Japan has pledged USD 150 which is unallocated. Not yet deposited
- Other programs: UK has pledged a capital contribution of 450 million GBP. A countersigned contribution agreement has been made, with 65.5 million GBP received and 384.5 million GBP outstanding.
- Overall SCF Funding Decisions : The cumulative funding decisions made by the SCF Trust Fund Committee amount to about USD 5 million, of which USD 1.2 million represents the strategic plan preparation budget for the PPCR approved in November 2008.
- The representative from Denmark announced that Denmark will be contributing 130 million Danish krone to the SCF over a two year period. These resources will be contributed to the Pilot Program for Climate Resilience and the Forest Investment Program.
d. Pilot Programme for Climate Resilience
- 8 countries offered participation. Of those, Bangladesh, Bolivia, Nepal, Niger and Zambia submitted final acceptance of the offer; templates have been approved by sub-committee. Mozambique just submitted final acceptance. Waiting for final templates from Tajikistan and Cambodia. Expert group will make proposals for final countries to be involved in Caribbean and Pacific region pilot; proposal for a country in MENA to be included.
- 50-50 loan/grant composition of pot at the moment. Phase 1 activities will all be funded by grants. Loans will be available on request from recipient countries. A couple of countries mentioned loans and grants issue in their acceptance templates, but given PPCR timelines we don’t except countries to take decisions on the loan element until further into Phase 1.
UN-REDD Programme
a. Pledged funds
The amount committed by Norway to the UN-REDD Programme has risen from USD 35 million to USD 52 million. In addition, at the UN-REDD Programme second policy board meeting, held on 14 and 15 June 2009, the Government of Denmark announced that it was exploring the possibility of also funding the UN-REDD.
b. Approved Projects
The UN REDD programme has recently approved its first 6 projects. The recipient countries are Democratic Republic of Congo (US$ 1.9 mi), Indonesia (US$ 5.6 mi), Papua New Guinea (US$ 2.6 mi), Tanzania (US$ 4.3 mi), Vietnam (US$ 4.4 mi) and International (US$ 9.6 mi). The total amount approved is US$ 28.3 mi.
For more information, visit http://www.un-redd.org/ and http://www.undp.org/mdtf/UN-REDD/overview.shtml
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posted 31 Mar 2009 03:51 by Izabel Camargo
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updated 31 Mar 2009 04:34
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US omnibus bill: implications for the Clean Technology Fund (CTF) and the Least Developed Countries Fund (LDCF).
The US House of Representatives approved a spending bill on 25 Feb 2009 for the Fiscal Year 2009. Regarding international climate financing, the bill states that the US government will channel US$ 100 million to USAID for programs and activities that reduce global warming. In addition, it shall donate US$ 10 million to the Least Developed Countries Fund, if the Global Environment Facility establishes more transparent mechanisms for project funding, reporting and local involvement. More information can be found on the resources page.
a. Implications for the Clean Technology Fund (CTF)
This decision shows that the US Congress has drawn back from the original pledge that the Bush administration had requested for the CTF because several lawmakers, including House Speaker Nancy Pelosi (D-Calif.), opposed the Bank's plan to allow some efficient coal-fired power plants to be considered "clean" (for information on the World Bank’s memo describing conditions under which it would use the CTF to finance coal and gas projects, see: CTF Criteria for Financing Low Carbon Opportunities in Coal and Gas Power Investments). The document states that coal power stations may receive CTF financing if they meet or surpass a certain level of efficiency - meaning they must emit less than 0.795 tonnes of carbon dioxide for every megawatt hour of power produced. The World Bank's own data shows that standard coal power stations built in rich nations emit 0.8 tonnes of CO2 per MWh. It is unclear what the move from Congress will mean for the other nations that are beginning to make good on funding pledges to the CTF. b. Implications for Least Developed Countries Fund
If the Least Developed Countries Fund (LDCF) receives the US$ 10 million donation from the United States, it will increase its pledged sum from 172.4 million to 182.4 million. Although the amount is relatively small, it demonstrates a commitment from the new US Administration to the Least Developed Countries and their adaptation efforts. However, the bill states that this amount will only be donated “if the Global Environment Facility makes publicly available on its website an annual report detailing the criteria used to determine which programs and activities receive funds, the manner in which such programs and activities meet such criteria, the extent of local involvement in such programs and activities, the amount of funds provided, and the results achieved”.
Outcomes of the Trust Fund Committee Meetings of the World Bank Climate Investment Funds (CIFs)
The World Bank Climate Investment Funds held Trust Fund Committee Meetings on January 27-30 2009. Significant movements were made at these meetings. The Trust Fund Committee approved a proposal for civil society representatives to observe meetings of the Trust Fund Committee.
Bangladesh, Bolivia, Cambodia, Mozambique, Nepal, Niger, Tajikistan and Zambia have been invited to participate in the Pilot Program for Climate Resilience (PPCR) which will provide about US$500 million for scaled up action and transformational change in integrating climate resilience in national development planning. The PPCR is part of the CIF’s Strategic Climate Fund. The Forest Investment Program (FIP) and Scaling Up Renewable Energy Program (SREP), also part of the CIF’s Strategic Climate Fund, were also discussed. Following the recommendations of the first FIP design meeting in October 2008, a smaller multi-stakeholder Working Group co-chaired by Norway and Ghana met early in January to further consolidate views on the FIP's design and plan the next design meeting. Climatefundsupdate will report the outcomes of the design meeting shortly.
The Scaling Up Renewable Energy Program is seeking a minimum of US$250 million to launch the program, with the Netherlands, UK and Switzerland having made commitments worth over US$100 million. The SCF Trust Fund Committee requested that a smaller multi-stakeholder working group be convened on March 9-10 to prepare a draft design document for the new program.
The CIF Clean Technology Fund (CTF) also made progress at the CIF Trust Fund Committee meetings. It was decided that four civil society positions will be created to observe the CTF Trust Fund Committee meetings, and will include local groups, indigenous people, and research/technical NGOs. Two private sector positions will be established as observers. The CTF Committee announced criteria for financing low-carbon opportunities in coal and gas power investments, and updates on funding commitments were also announced at the meetings.
The Adaptation Fund Board has met for the fifth time in Bonn, Germany, on March 24-27, 2009. Important decisions were expected from this meeting, in particular how the CERs that are already designated to the Adaptation Fund will be monetized; and when the fund will start to disburse resources, as it was previously announced that this would occur on the first quarter of 2009. Climatefundsupdate will report the outcomes of this meeting at the Adaptation Fund description page once the meeting report is available.
UN-REDD update on stakeholder consultation
New fund: the Initiative for Climate and Environmental Protection (IKLU)
Climatefundsupdate has decided to include another fund to its list: the Initiative for Climate and Environmental Protection (IKLU), from the German Credit Agency for Reconstruction – Banking Group (KfW Entwicklungsbank) and the German Federal Ministry for Economic Cooperation and Development (BMZ). The page on the IKLU will be available soon.
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