March 2014 Climate Finance Update
31 March 2014: During the month of March, the World Bank, the Global Environment Facility (GEF), the International Fund for Agricultural Development (IFAD) and a regional development bank announced funding for several climate-related projects or initiatives. The World Bank has also provided an update on the growth of the green bond market.
IFAD reported on a new programme in Yemen that will target poor, food-insecure households, and will focus on improving the livelihoods of women and young people. The Rural Growth Programme will integrate a number of innovative elements, such as runoff harvesting from road surfaces, to counter water stress and adapt to growing climate risks. The Programme is co-financed by, inter alia, IFAD, the (IsDB), the EU, and the GEF. [IFAD Press Release]
IFAD is also providing US$34 million to finance the Project for Adaption to Climate Change in the Mekong Delta in Ben Tre and Tra Vinh Provinces in Viet Nam. The project includes a US$12 million grant from the Adaption for Smallholder Agriculture Programme (ASAP). The project will work to develop climate-resilient agricultural systems, salinity-tolerant fish varieties and off-farm livelihood opportunities. It will also promote climate-sensitive planning to rationalize budgetary allocations, and provide financing for climate-robust, small-scale infrastructure to be built at community level. [IFAD Press Release]
The World Bank reported on the launch in Addis Ababa of a business hub, the Ethiopia Climate Innovation Center (CIC), which is to support pioneering clean technology enterprises that address climate change while creating jobs and improving livelihoods. The center aims to help over 3.1 million Ethiopians increase resilience to climate change and is expected to create more than 12,000 jobs in the next ten years. The Ethiopia CIC is part of infoDev's Climate Technology Program (CTP), which is currently implementing a global network of innovation centers across seven other countries. Ethiopia CIC is supported by the Government of Norway, UKAid and the World Bank. [World Bank Press Release]
The European Investment Bank, (EIB) launched its first ever GBP-denominated Climate Awareness Bond (CAB). The GBP 500m transaction, which is EIB's largest CAB transaction this year, was driven by investors interested in its socially responsible features, mainly out of the UK. [EIB Press Release]
The World Bank has also provided on update on the growth of the green bond market. According to the Bank, green bonds deliver finance for clean energy, mass transit, and other low-carbon projects that can help countries adapt to and mitigate climate change, while giving investors high-quality credit, and fixed-income investment opportunities. It highlights that in 2013, the World Bank mobilized over US$5.3 billion through 61 green bond transactions in 17 currencies, and the International Finance Corporation (IFC) issued US$3.4 billion in green bonds, including two US$1 billion issuance. The Bank also points to the adoption in January 2014 of the Green Bond Principles by a consortium of investment banks. The Principles aim to serve as voluntary guidelines on the development and issuance of Green Bonds, encouraging transparency, disclosure and integrity. At the World Economic Forum in Davos, World Bank Group President Jim Yong Kim called for doubling the global market for green bonds to US$20 billion by September, to coincide with the UN Secretary-General Climate Summit. [World Bank Press Release]