ED remarks at plenary session, The COP29 landscape on finance and means of Implementation and ambition

  • Event
    Copenhagen Climate Ministerial, Copenhagen, Denmark
  • Publication date 22 Mar 2024

Thank you very much for you and your team for inviting us here, Excellencies, friends. 

It's a pleasure to be here with you as well and once again talking about what is one of the most important topics to drive climate innovation which is climate finance. 

Let me also congratulate Vera and Mar and the head of the panel on climate finance for the most recent reports which really speak to the things that I assume, at least in this room, we all know too well. These are the things that are necessary.  

I think the conversation is to get the right alliances and the right coalitions and the right forum to take them forward. 

We know that these are the things that are necessary. So just from my side and based on my own experience before I come to the Green Climate Fund and what's happened with the Green Climate Fund and the responsibility of the Fund, basically we are talking about volume, quantum, how do we mobilise the quantum, that is necessary, the quality of the finance and different models because clearly the models that we have up to now haven't lived to the expectations and opinions. 

So quantum, Vera mentioned numbers, we all know we have to get to the trillions, adaptation’s lagging behind. It's really important to get our heads around the four sources of finance that are needed to be worked on in tandem and they need to be mutually reinforcing. 

So domestic capital mobilisation being one of them, Ammar mentioned it as well, both through fiscal tools, through the regulation of harmful subsidies. 

But there's a vast potential to mobilise domestic institutional capital as well and I'll speak to that in a bit. 

Private sector capital mobilisation. We all know, we keep talking about it, and Vera again mentioned some numbers which I think is really important that we think about carefully, the flows of private investment into emerging markets in developing countries is far below what it needs to be. 

We are seeing significant progress in developed countries thanks to the IRA in the US, thanks to other measures in the EU, but we are not seeing that level in emerging markets in developing countries. 

So clearly we need to get our heads around different vehicles, they use much more ambitious use of risk capital. Then we have the development finance, there's a whole effort to reform the MDBs, but I agree with Ammar, we need to empower a vaster network. 

It's not just the reform of MDBs, but how do we empower the broader development banks, many of which are in developing, the most important ones are in developing countries and they can play a vital role. 

And the concessional finance, and I agree, this is again what Ammar said, it's the scarcest and very vital source of finance to unlock many of the things that I mentioned before, the other three. 

So actually the concessional finance has been unlocking MDB finance, has been unlocking development bank finance, has been unlocking private sector finance and has even been supporting domestic capital mobilisation. 

So it's an unlocker of all of these different dimensions that need to come together. 

When it comes to quality of finance, and we will see this come through the G20 process, I've heard it consistently from developing countries over many years, it's not even this recent, issues of improved taxes. 

I think this is one of the key priorities for me at GCF, but I know it's one of the key priorities for Brazil as they did the G20. 

The predictability of the finance, the affordability, you have to be mindful about debt considerations, the transparency and accountability of the finance, and of course adaptation in the poorest and the most vulnerable. 

And having worked quite a bit on new models and country platforms and investment plans and the potential that they have, and I do know that people have different understandings of country platforms and investment plans. 

There are good examples out there of how we bring different financiers together for more transformative investment than just a project by project approach, and we need to learn from those and support such other initiatives, expanding on such initiatives. 

Now, when it comes to the Green Climate Fund, as I was saying, we have a major responsibility and we take that responsibility serious because we do know that this is a very scarce and vital source of finance to unlock many of the other sources of finance. 

The GCF, since it became operationally effective in 2015, has committed USD 14 billion. We have a very large network of projects, more than 250 in 129 countries.One- third of the capital disbursed and 85 per cent under implementation. 

We are honoring the Board's guidance on 50 per cent for mitigation, 50 per cent for adaptation, so we are a major source of funding for adaptation in developing countries. 

And we are also honoring the guidance on prioritising LDCs, SIDS, and Africa. 

Last year, we had our second replenishment, and this is a positive note to this discussion because we had the largest replenishment to date. 

We had a 30 per cent increase from last time, which I know was one of the recommendations from the High-level Panel as well, to have an increase of 50 per cent from last time. 

So we had a 30 per cent increase, and I don't think it will stop here because we still have at least one important contributor to confirm. 

And thank you to all of the contributors here, most of them are in this room. 

So I think this was and is important because we also have in our hands, I'm not sure that everybody appreciates this, but actually GCF, we have a pipeline that has been submitted by the network of institutions that we work with, which is quite vast. 

This is 120 organisations. We have a USD16 billion pipeline in our hands. 

So this was very important, and it will continue to grow because more organisations are submitting more projects. 

Last year as well, the Board adopted a new strategy, and I presented my vision, 50by30 vision, since I joined the Fund in August. 

And this really is quite focused on making sure that we can deliver at a much higher level of finance, but also that as we grow, we become also more efficient and more impactful. 

So our reform agenda is in motion. There are two other things that we are very focused on: private sector capital mobilisation, and targeting and reaching the most vulnerable people and communities. 

So let me just give you a few examples of what we announced at COP, which I think is what we need to see more of and build upon if we are to make a difference when it comes to climate ambition. 

We supported the first-ever global financial institution called Green Guarantee Company that will provide guarantees for climate funds in developing countries. 

This is domestic capital mobilisation. 

We also supported the very first blended finance platform that is designed to drive institutional capital toward long-term loans for sub-national borrowers in developing countries. 

This is very important. This is mobilisation of institutional capital and for subnational because we do know that subnational need to drive big time the agenda as well. 

The urban greening models, urban green models. 

And this platform will support 19 of the most climate vulnerable countries. 

We also supported an equity fund that is targeted at reaching, and I know this is another recommendation in the report, from where Lamar and the team, equity. 

In certain geographies, providing equity is really critical. 

We provided equity to an equity fund to invest in energy access in 16 African countries, areas that have not received loans and communities that have been really deprived from energy access. 

And just another example, we also provided funding to another platform to promote sustainable agriculture in 11 countries. 

And this is really to transform the supply chains that are known to drive deforestation. 

So across these four, these are just examples, we are committing based on our board, USD 450 million and expect to mobilize USD 9 billion of other capital. 

These are the sort of things that we are very interested in and hopefully we will continue to see more of and help scale as well. 

Now, in addition to that, it's really important to focus on areas that not just geographies within sectors that have really not received much support. 

So we announced investments in health, we announced investments in education, which have really not received enough funding so far, in blue economy, in early warning systems, a key priority of the UN Secretary General for very good reasons. 

And we are very deliberate to going to the “climate orphans,” what's called climate orchards, countries that have really not received very nearly what they need. 

I'm coming from Somalia. I was in Somalia very recently. Somalia is one of the most vulnerable countries to climate, one of the fragile, conflict-affected countries, and they had not yet received financial investments from GCS. 

So we're going to change that this year. 

They are going for the first time to receive more than USD 100 million if our Board approves those projects later in the year. 

Let me just touch on one more thing, because Amar also mentioned it, and I alluded to it earlier on: country platforms. Under the leadership of the countries and based on the NDCs, ambitious NDCs, ambitious NAPs, really supporting ambitious investment plans. 

When I took over the job at GCF, I found myself with one of the most powerful instruments actually in finance architecture to support this, which is called the Readiness Program. 

I had not yet seen such an amount of resources, grant resources, to support this agenda of building capacity in countries, in institutions, of enhancing NDCs, NAPs, helping countries come up with investment plans. 

So the board approved the new phase of this Readiness Programme last October for USD 500 million. 

These are resources that can now be used by countries to help you enhance your NDCs, develop the NAPs if you have them, enhance the NAPs, come up with investment plans and financing plans. 

These resources are available and we look forward to working with many of you in really driving forward this model, which is really powerful and has a lot of potential, which is bringing different financiers together. 

So, us as an unlocker of domestic capital, of development finance of private capital with those others. And with that, have ambitious investment plans on the table. 

Just to conclude, will also be contributing in the different fora. We are exploring also new approaches in terms of, for example, local currency financing. 

We are looking at what we can do when it comes to climate swaps. We are leading efforts in terms of enhancing complementary and coherence among the major multilateral climate funds. 

G20 is doing work on that as well. But we have our own process ongoing. We are supporting the interim secretariat of the Loss and Damage Fund. 

And we are ready to contribute to the NCQG, the new acronym. We are very happy to contribute to those efforts as well. 

So I know and I've spoken to many of you, particularly also from developing countries. I want to tell you that I have heard you. I know that this issue of access and simplification of access is paramount. 

We are working on this, this is a key element of our reform agenda. And amongst many other efforts and many contributions from many, we hope to be much more fit for purpose. 

And through our share, to have a climate finance architecture that is much more fit for purpose than it is at the moment.  

Thank you.