Donors, banks, philanthropic communities pledge $5.43b for climate projects

At the COP29 Conference on Friday, multilateral donors, banks and philanthropic communities pledged around US$ 5.43 billion to fund various climate-related projects in the coming years.

Of the total funding, the Asian Development Bank (ADB) announced around US$3.5 billion for new programmes to help counter the impact of melting glaciers, the Azerbaijani banking sector pledged to allocate $1.2 billion for green projects by 2030 and Sweden announced a contribution of $730 million to the UN Green Climate Fund (GCF).

This funding commitment came from the COP29 Business, Investment, and Philanthropy Climate Platform (BIPCP) in Baku, Azerbaijan.

The COP29 Presidency brings together UNCTAD, UNDP, the WTO, the International Trade Center (ITC), previous and future COP Presidencies, multilateral development banks and multilateral climate funds to create the Baku Initiative for Climate Finance, Investment, and Trade (BICFIT) dialogue.

The BIPCP convened over 1,000 business, finance and philanthropic leaders to discuss the active role the private sector needs to play in addressing climate change., the meeting decided.

The participants decided to work together on developing a shared vision and action plan to accelerate the deployment of private capital in climate markets.

The event was hosted by the COP29 Presidency and the UN Climate Change high-level Champion Nigar Arpadarai, in collaboration with the Ministry of Economy of the Republic of Azerbaijan and the Export and Investment Promotion Agency of the Republic of Azerbaijan (AZPROMO).

Speaking on the occasion, Arpadarai reinforced the importance of fostering inclusive ecosystems for the private sector to support the climate agenda, stating: “We need to create an ecosystem for businesses which will make the climate change agenda not only ambitious and mandatory, but also practical and achievable. Such a system should encompass more than a few corporations in the developed world and must reach beyond the usual suspects.”

Other partners for the event included AVPN, Bill & Melinda Gates Foundation, International Finance Corporation, Marrakesh Partnership, Sustainable Markets Initiative, WBCSD, World Economic Forum and XPRIZE.

ADB announced a new programme to help combat the impact of melting glaciers.

The multilateral donor agency on Friday launched a new regional programme to promote sustainable water use and food security in Central Asia, the South Caucasus and Pakistan amid the catastrophic impacts of melting glaciers.

With support from the Green Climate Fund (GCF), ADB will conduct glacier risk assessments in Azerbaijan, the Kyrgyz Republic, Tajikistan and Uzbekistan.

These will form the scientific and technical basis for the programme—called Glaciers to Farms—which envisages mobilising up to $3.5 billion from a range of actors including ADB, GCF, other development partners, and the private sector, subject to those institutions’ board approval processes.

In addition to water and agriculture investments, the programme will support vulnerable communities threatened by glacial melt, particularly in fragile mountain regions.

Azerbaijan’s banking sector announces pledge for green projects 

On behalf of the banking sector of Azerbaijan, Zakir Nuriyev, president of the Azerbaijan Banks Association, announced details of a pledge that will allocate $1.2 billion for the development of green and sustainable projects in Azerbaijan until 2030.

The funds will support projects contributing to Azerbaijan's transition to a low-carbon economy. This follows the Central Bank of Azerbaijan introducing a new green taxonomy to guide sustainable investments. 

Sweden contributes to protecting low- and middle-income societies from climate change 

Sweden has announced a contribution of $730 million to the UN GCF. This will support low- and middle-income countries to invest in adaptation measures to protect their societies against climate change and will also support investment in climate initiatives to reduce emissions.

This brings Sweden’s overall contribution at COP29 to $749 million, following the €19 million it contributed to the Fund for Loss and Damage earlier this week.

When contacted, Executive Director of Nature Conservation Management (NACOM), a non-government organisation (NGO) operated from Bangladesh, Munjurul Hannan Khan demanded that all sorts of funding to the climate-vulnerable countries should come as grants.

The multinational banks are eyeing making more profit from projects in the name of climate funding, he lamented.

The NACOM top brass demanded that the interest rate should be between 0.5 and 0.75 per cent for a 40-year tenure if the developing partners are not willing to pay grants.

“If Bangladesh agrees to short-term loan, it might be harmful to us as the country is already suffering heavily with debt burden,” he added.

Mr Khan, who is taking part in the COP29 as a Bangladeshi expert, also questioned why Bangladesh will seek loan when the Paris agreement mandates  financial, technological and knowledge support for developing countries from developed nations.

Climate change becomes a business for assets owners multilateral development banks and multinational companies, he said.

According to Paris agreement, the developed countries agreed to provide USD$100 billion as grants every year, but they have so far provided only an accumulated amount of around US$20 billion, he added.

Endorsement for the Baku Initiative for Climate Finance, Investment and Trade Dialogue 

Past, present and future COP Presidencies on Friday endorsed the COP29 Baku Initiative for Climate Finance, Investment and Trade (BICFIT) Dialogue.

In creating BICFIT, the COP29 Presidency also brought together UNCTAD, the UNDP, the World Trade Organization (WTO), International Trade Center (ITC), multilateral development banks and multilateral climate funds.

BICFIT will guarantee finance, investment, and trade at the centre of the climate change agenda by ensuring alignment, continuity, and delivery across discussions, actions, and initiatives between previous and future COPs in support of the UNFCCC and the Paris Agreement.

The BICFIT Dialogue will incorporate existing global initiatives such as the Glasgow Financial Alliance for Net Zero (GFANZ), the Coalition of Finance Ministers for Climate Action, the Coalition of Trade Ministers on Climate, the Climate FDI Coalition, and the newly initiated Baku Global Coalition for SMEs Green Transition to align climate finance, investment, and trade with sustainable development priorities. 

Commenting on developments from the day, COP29 President Mukhtar Babayev said: “The COP29 Presidency’s plan is based on two pillars. To enhance ambition and enable action. This means setting out clear climate plans and delivering the finance we need. As we mobilise climate finance, we allow for higher ambitions, and as we signal higher ambition, we build trust to unlock greater financial commitments.

“We need all actors from the private sector, philanthropies, multilateral development banks and climate funds, international organisations, and civil society to contribute,” he said. 

The launch of the BICFIT and hosting the BIPCP represent our strong commitment to bringing critical partners together to accelerate ambitious climate action.”

Commenting on the launch of the COP29, BICFIT Dialogue, Achim Steiner, United Nations Programme Administrator and co-leader of the BICFIT initiative, said: “Vulnerable countries must not be held back from delivering on their ambitious climate action because of financing limitations. To meet this moment at COP29 and beyond, we require a major shift in public and private finance, domestically and internationally, including the reform of the global finance architecture. The BICFIT initiative stands as a principal platform for fostering collaboration and innovative solutions across climate finance, investment, and trade, empowering nations to tackle this formidable yet essential journey towards transformative structural change.”

Commenting on the launch of the COP29, BICFIT Dialogue, Rebeca Gryspan, UNCTAD Secretary General and co-leader of the BICFIT Dialogue initiative, said: “Developing countries will need $1.1 trillion annually in climate finance by 2025, with $900 billion expected from external sources. This initiative enables us to align trade, investment, and finance with climate goals, bringing stakeholders together to ensure these three drivers work in concert. Better coordination will lower the overall cost of a just transition, leveraging shared strengths and minimising conflicts between climate policies and sustainable development.”

azizjst@yahoo.com