Climate Mitigation Finance Update: From Divestment to Investment, Renewable Energy and Energy Efficiency
The past month has seen the launch of new renewable energy and energy efficiency projects, investment in the green economy and capacity building, and climate finance approvals through the Green Climate Fund.
Projects in the Ukraine have been launched to build four new solar plants and improve energy efficiency in buildings and street lighting, strategic planning projects for sustainable development and renewable energy capacity in Southeast Asia have been announced, a global insurance company has announced a major divestment from coal, and local communities in Ghana are set to benefit from a five-year climate-smart land-use capacity building project.
Green Climate Fund Approves First Projects of 2018
In its first board meeting of 2018, the Green Climate Fund (GCF) has approved 23 projects, for a total of US$1,093.5 million, to assist developing countries with low-emission and climate-resilient development. The projects approved include US$52.50 million for the Zambia Renewable Energy Financing Framework with the African Development Bank (AfDB), US$103 million for promoting risk mitigation instruments and finance for renewable energy and energy efficiency investments in Argentina with the Inter-American Development Bank (IDB), and US$195 million for Financial Instruments for Brazil Energy Efficient Cities (FinBRAZEEC) in Brazil with the World Bank, among others. [GCF Press Release] [SDG Knowledge Hub story]
Coal Divestment and Green Economy Investment from Major Insurer
Global insurance company Generali has announced it will divest €2 billion from coal. The announcement to divest from the fossil fuel is accompanied by a commitment to invest €3.5 billion into “green sectors,” including green bonds and green infrastructure, alongside a pledge for no new investments in businesses associated with the coal sector. [UNFCCC Press Release]
Climate-Smart Land-Use Practices in Ghana
Financing from the Climate Investment Funds (CIF) is supporting a five-year, US$5.5 million project for climate change mitigation related to land-use in Ghana. Implemented by the Solidarid West Africa, an organization seeking to fight forest loss and unsustainable land-use practices, the Ghana Dedication Grant Mechanism for Local Communities aims to increase understanding of the linkages between climate change and land use practices in 52 forest fringe communities, through training and grants to implement climate change-smart land-use practices. [CIF Press Release]
Renewable Energy and Energy Efficiency in Ukraine
The European Bank for Reconstruction and Development (EBRD) and the Clean Technology Fund (CTF), have announced joint investments towards the construction of solar plants in Ukraine. A first agreement concerns the construction of a 36 MW solar plant, expected to have 72 MW capacity once the full project is completed, with a 10-year €17.3 million loan from EBRD, alongside a commitment from CTF to extend an 11-year loan of €6.9 million. The project will extend the loans to Energopark Yavoriv LLC, owned by Zinoviy Kozytskiy, an entrepreneur who has already been involved in the construction of two wind farms in the region and is said to have shifted his business to renewable energy following global trends, having previously been focused on oil and gas extraction. [EBRD Press Release]
A second funding agreement will see a senior EBRD ten-year €18.5 million loan with a CTF €7.4 million loan go towards the construction of three further solar plants, with an expected total capacity of 33.9 MW. Having also received technical support from EU4Business, the joint funding agreement with Ukrainian company KNESS Group is the latest project conceived under the Ukraine Sustainable Energy Lending Facility. The project is expected to create 365 jobs while avoiding greenhouse gas (GHG) emissions of approximately 37,500 tCO2e per year. [EBRD Press Release]
In related regional news, the Norwegian government has pledged an additional €3.8 million (equivalent to NOK 37 million) for the Nordic Energy Efficiency and Humanitarian Support Initiative for Ukraine, launched in 2014. Focusing on energy-efficiency improvement measures in schools, day-care centers, health institutions, and street lighting, the €3.8 million commitment will go towards new projects to be financed in 2018. [NEFCO Press Release]