Scaling up green financing, European Bank for Reconstruction and Development (EBRD) President Odile Renaud-Basso and the Green Climate Fund (GCF) Executive Director Yannick Glemarec signed an agreement on June 2 to launch a new $1.01 billion high impact program for the corporate sector.
According to the EBRD, the program combines $252.5 million of concessional finance from the GCF with $757.5 million from the EBRD and other co-financiers, and an additional $5.53 million from the GCF and $1.36 million from the EBRD for technical assistance and policy dialogue. It will promote the uptake of low-carbon technologies in the industrial sector.
“We are very happy to strengthen the cooperation with our longstanding partner, the GCF, to achieve sustainable development across our regions,” Renaud-Basso said. “It is a great example of how organizations can work together to address environmental challenges. Companies face a range of challenges related to identifying, prioritizing and implementing low-carbon projects, and support from the EBRD and the GCF will be crucial,” he added.
Glemarec said this $1 billion initiative demonstrates how GCF’s partnership with EBRD is driving innovation and investment in climate action at scale in developing countries. “This program covers seven countries and serves as a model in paring back emissions in hard-to-abate industries. It will facilitate technology transfer and place climate change at the center of corporate strategy,” he said.
The program is the GCF’s first at-scale engagement in the sector. It has been designed to facilitate a transformational shift within the energy-intensive industries, agribusinesses and the mining sector of Armenia, Jordan, Kazakhstan, Morocco, Serbia, Tunisia and Uzbekistan.
In these sectors and countries, key barriers need to be overcome to unlock potential to deliver climate benefits. Critical financial barriers to the uptake of climate technologies across industrial, agribusiness and mining sectors contribute to the higher costs that early adopters of technologies face due to a lack of access to suitable financial products with adequate pricing.
The program will support the corporates in formulating a low-carbon pathway, along with a concrete action plan of realistic investment and a strategic review of their business model as part of their corporate climate governance undertakings.
Overall, the program is expected to reduce emissions by 17.2 million tCO2 over a 20-year asset lifetime, which is equivalent to avoiding one year’s worth of energy-related CO2 emissions by a country like Croatia.
Recognizing the scale of investment necessary to limit global temperature rise to below 2 degrees Celsius, the Green Climate Fund was created to support developing countries in mitigating and adapting to the challenges posed by climate change. The EBRD and the GCF have been working together since 2017 to respond rapidly and effectively to these challenges for the benefit of millions of people. Together, the GCF and the EBRD are unlocking the necessary financial and technical forces to support green, transformational investments in developing countries.