Successful Efforts to Motivate Countries to Contribute to GCF
SAA Includes Vital Sectors Whose Projects Represent Promising Investment Opportunities
Blended Finance that Combines Domestic, External, Public and Private Sources of Financing Becomes Essential
Dr. Mahmoud Mohieldin, UN Climate Change High Level Champion for Egypt and UN Special Envoy on Financing 2030 Sustainable Development Agenda, participated in the roundtable of the Independent High Level Expert Group on Climate Finance (IHLEG) that took place in Abu Dhabi on August 15 and 16.
The meetings witnessed the participation of Dr. Sultan Al-Jaber, President-designate of COP28, Adnan Amin, CEO of COP28, Dr. Rania Al-Mashat, Egypt Minister of International Cooperation, Group Chairs Vera Songwe and Nicholas Stern, Mark Carney, UN Special Envoy on Climate Action and Finance, Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), along with a large number of experts and representatives of international and regional financial organizations and institutions, the Glasgow Financial Alliance for Net Zero (GFANZ) and COP28 officials.
The meetings discussed proposals on restructuring IFIs to ensure harmony between different financing instruments, promoting concessional financing instruments to scale up climate action, reaching mechanisms for inclusive and just financing, identifying climate financing gaps and obstacles that require rapid practical intervention, beside developing a road map for climate finance to be adopted and implemented through the next three editions of the Conference of the Parties starting from COP28 that will take place in Dubai in the end of the year.
During his participation in the meetings, Dr. Mahmoud Mohieldin stressed the need to reform the global financing structure and develop new financing policies and mechanisms that ensure the provision of sufficient, efficient and fair financing for development action in general and climate action in particular, provided that this financing should not be biased toward specific activities or entities without others.
Mohieldin said that some entities that work on mobilizing finance for climate action are making great efforts despite the challenges posed by the geopolitical, economic and environmental crises, adding that the efforts he made as a facilitator of the second replenishment process of the Green Climate Fund (GCF) in this context succeeded in motivating a number of countries to contribute to the Fund such as Germany, Canada, the Czech Republic and Monaco, with more countries predicted to contribute to the fund before COP28.
Mohieldin pointed to the importance of country platforms for climate and development action in light of mistrust witnessed by the international community, he explained that these platforms represent good opportunities for cooperation between governments, private sector and MDBs, pointing in this regard to the importance of blended finance for climate and development action that combines domestic, external, public and private sources of funding, beside linking public budgets of countries to development and climate targets.
He stated that climate finance must balance between mitigation and adaptation activities, beside taking the file of loss and damage into account, noting, in this regard, the role played by the transitional committee to set the governance framework of Loss and Damage Fund that resulted from COP27 in Sharm El Sheikh.
Mohieldin added that financing mitigation activities has witnessed great momentum during the last period thanks to the participation of the private sector and the efforts made by GFANZ, pointing out that adaptation activities need similar momentum that can be achieved through the implementation of Sharm El Sheikh Adaptation Agenda (SAA) launched during COP27 by the Egyptian presidency of the conference and HLCs, which includes vital sectors whose projects represent promising investment opportunities.
In this context, Mohieldin stressed the important role of IFIs and MDBs in financing and de-risking adaptation projects in a way that encourages private sector to participate more in financing and implementing these projects, explaining that financing adaptation activities requires establishing more partnerships with private sector and NGOs.
Mohieldin highlighted the Five Regional Roundtables initiative launched by the Egyptian presidency of COP27 in cooperation with the United Nations regional economic commissions and the HLCs last year, which the UAE presidency of COP28 is participating in its second edition this year, he said that the initiative resulted in a large number of projects that cover different aspects of climate action, and represent promising opportunities for investment and financing, adding that the second version of the initiative witnessed cooperation from various financiers and GFANZ in financing a number of these projects, marking the start of their implementation.
The climate champion stressed that development and climate finance policies must deal with debt crises through debt reduction mechanisms and debt swaps for investment in nature and climate, and develop new concessional financing policies that include a low interest rate with long-term repayment and grace periods.
In this context, Mohieldin confirmed the necessity of concessional financing policies to include middle-income countries, explaining that a large number of countries in Africa, for example, need to finance their development and climate action and do not enjoy the advantages of concessional financing because they are middle-income countries.