Dr. Mahmoud Mohieldin in COP28: Scaling Up Private Finance is Necessary to Close the Climate Adaptation Financing Gap

Climate Finance Requires Reforming MDBs & Raising Their Capital

Dr. Mahmoud Mohieldin, UN Climate Change High Level Champion for Egypt and UN Special Envoy on Financing 2030 Sustainable Development Agenda, said that scaling up private finance is essential to close the financing gap for climate adaptation activities.

Mohieldin stated, during the session of “Enabling Private Finance for Adaptation: Practical Actions to Implement the Sharm El Sheikh Adaptation Agenda” within the events of COP28, that the private sector’s contribution to financing adaptation ranges from 3% to 5%, while the adaptation share of the global climate finance fell from 7% in 2019/2020 to 5% in 2021/2022.

The climate champion stated that the funding of adaptation activities in Africa amounted to $11 billion annually, and the adaptation activities stipulated in the NDCs of African countries require $55 billion, while international reports indicate that Africa needs about $110 billion annually to finance its adaptation activities, stressing in this regard the important role of the private sector in filling these gaps.

he explained that the laxity in implementing mitigation and adaptation activities led to increased interest in the loss and damage file, which was successfully highlighted by the COP27 in Sharm El Sheikh through the launch of the Loss and Damage Fund that was activated during the Dubai Conference, saying that the fund would change the dynamics of climate action and highlight the need to pay attention to financing and implementing mitigation and adaptation activities.

Mohieddin praised the launch by the United Arab Emirates of a $30 billion fund that comes mainly from the private sector to finance all aspects of climate action in developing countries, contribute to capacity-building and provide technical support for climate projects in these countries.

Mohieldin noted the success of the second replenishment of the Green Climate Fund after 29 countries contributed $12.4 billion, explaining that the fund is working to finance climate activities in developing countries in a fair and balanced manner that contributes to achieving the goals of reducing emissions and building climate resilience.

During his participation in the session entitled “Country Transition: Poverty, Climate and Finance”, Mohieldin stressed the importance of the holistic approach that considers climate action an integral part of development action. He underlined the need to accelerate the pace of climate action and getting it implemented according to specific accountability standards.

Mohieldin stated that the need to mobilize $1.4 trillion a year from domestic resources requires cooperation from all local actors, especially the private sector, noting, in this regard, the need to reform MDBs by increasing their capital and adopting more effective policies for concessional finance.

In the “Race to Resilience Report” session, Mohieldin said that climate adaptation activities must receive sufficient attention and funding in order to build the resilience for 4 billion people by 2030.

He added that the interest of COP28 in Dubai in investing in nature and biodiversity is integrated with the interest of COP27 in Sharm El Sheikh in the climate adaptation file, which resulted in the issuance of the Sharm El Sheikh Adaptation Agenda (SAA) as a practical mechanism for implementing adaptation activities.

He explained that the holistic approach, confirmed by the Sharm El Sheikh conference and built on it at the Dubai conference, contributes to achieving SDGs through activities of reducing emissions and adapt to climate change.

He praised the successes achieved by COP28 since the first day, which resulted from good preparation and sincere work by the UAE.

In the “Public-Private Sector Climate Finance Dialogue”, Mohieldin stressed that closing climate action gaps requires collaboration between governments and private sector.

The climate champion explained that the private sector has the ability to finance climate action in case that incentivizing regulatory frameworks have been developed by governments.

He said that there are multiple areas of public-private partnership in climate action, including projects revealed by the Regional Platforms for Climate Projects (RPCP) initiative, where the public and private sectors can cooperate in financing, capacity-building and technical support for these projects.

He stated that activating innovative financing instruments, debt swaps for investment in nature and climate, and the establishment of carbon markets require cooperation between the public and private sectors, stressing that NDCs should go in line with the real needs of climate action, and that these contributions should be converted into practical plans and strategies to achieve climate and development goals.