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    US$6.1 Billion Pledged for the Climate Investment Funds

    By Keith R | September 28, 2008

    Topics: Climate Change, Environmental Protection, Renewable Sources | No Comments »

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    From the World Bank:

    Donor Nations Pledge Over $6.1 Billion to Climate Investment Funds

    Funds boost global fight against climate change

    Leading industrialized nations today pledged more than US$6.1 billion to the Climate Investment Funds, a pair of international investment instruments designed to provide interim, scaled-up funding to help developing countries in their efforts to mitigate increases in greenhouse gas (GHG) emissions and adapt to climate change.

    Meeting at the World Bank in Washington, representatives of 10 countries (Australia, France, Germany, Japan, The Netherlands, Norway, Sweden, Switzerland, the United Kingdom, and the United States) emphasized their support for the Climate Investment Funds, formally approved on July 1 by the World Bank Board of Executive Directors.  The first proposals to benefit from funding under the CIF are expected to be announced early in 2009.

    “Today, we are uniting to fight global climate change,” said World Bank Group President Robert B. Zoellick.  “I want to thank all the donor countries for their generous pledges of more than US$6.1 billion to the Climate Investment Funds and their commitment to climate action.  These funds are a concrete step forward toward reconciling the challenge of global climate change with the challenge of development and overcoming poverty. We hope it is only the beginning, however, and that other nations will also contribute to enable even more financing for climate action.”

    The Climate Investment Funds were created through a consultative process involving a series of multi-stakeholder design meetings and taking account of extensive global climate change consultations held by the World Bank Group over the past nine months.  Consultations took place with potential recipients and donors, the United Nations family, other multilateral development banks (MDBs), civil society organizations, and the private sector.

    The funds, to be disbursed as grants, highly concessional loans, and/or risk mitigation instruments, will be administered through the multilateral development banks and the World Bank Group.

    “The Inter-American Development Bank (IDB), along with our counterpart institutions in Asia, Africa and Europe, is fully committed to partnering with the World Bank Group in the implementation of this vital new source of financing,” said IDB President Luis Alberto Moreno, also attending the meeting. “We think these funds could help to jump-start programs for scaling up low carbon investments Latin America and the Caribbean, and we see great potential for transferring ideas and technology to and from other regions.”

    Two trust funds are being created under the Climate Investment Funds. The Clean Technology Fund, will invest in projects and programs in developing countries that contribute to the demonstration, deployment, and transfer of low-carbon technologies.  The projects or programs must have a significant potential for long-term greenhouse gas savings.

    The second fund, the Strategic Climate Fund, will be broader and more flexible in scope. It will serve as an overarching fund for various programs to test innovative approaches to climate change.  The first program under this fund is a pilot aimed at increasing climate resilience in developing countries.  A Forest Investment Program and a Scaling-Up Renewable Energy Program are also expected to be created in the coming months.

    The Undersecretary for International Affairs at the U.S. Treasury, David McCormick, in announcing a US$2 billion contribution over three years, said:  “Today’s pledging conference at the World Bank was a major step forward  in building the financial base of the new Clean Technology Fund, which  now has the resources it needs to begin the important work of reducing  greenhouse gas emissions growth in the developing world.  The United States is firmly committed to the Clean Technology Fund and its mission to help developing  countries make transformational investments in clean technology that will be necessary to move them onto cleaner development paths.”

    The United Kingdom announced a commitment of £800 million (approximately US$1.5 billion at current exchange rates). Andrew Steer, Director General at the U.K.’s Department for International Development, said “these funds are all about demonstrating that low-carbon development and climate resilient development can happen.  They will allow us to get on with helping developing countries with their efforts on climate action.”

    Japan’s representative at the meeting, Daikichi Monma, Deputy Director General of the International Bureau of the Ministry of Finance, in stating his government’s pledge of “up to US$1.2 billion” to the CIF, said “we are very pleased to join other donor nations at this meeting to support the efforts of developing countries in mitigation and adaptation. This is an important step forward in the partnership among all countries as we work together to fight against climate change.”

    In creating the funds, and in support of the Bali Action Plan, participants took care to recognize the primacy of the United Nations Framework Convention on Climate Change (UNFCCC) in global climate negotiations, and to support those negotiations.  All funds and programs under the CIF have a sunset clause in order not to prejudice UNFCCC deliberations regarding the future of the climate change regime.

    Developing countries will have an equal voice in the governance structures of the funds, and decisions on the use of funds will be made by consensus. An annual Partnership Forum will be held to provide a venue for talks on the strategic directions, results, and impacts of the CIF, as well as provide a platform to share lessons learned as widely as possible.  The first Partnership Forum, scheduled for October 14, 2008, will be a broad-based meeting of stakeholders, including donor and recipient countries, MDBs, the United Nations and its related agencies, the Global Environment Facility, UNFCCC, the Adaptation Fund, bilateral development agencies, non-governmental organizations, private sector entities, and scientific and technical experts.

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