CLIMATE-RELATED DEVELOPMENT FINANCE IN

EECCA COUNTRIES

Takayoshi KATO Policy Analyst, Environment Directorate, OECD

11 July 2016

From

ToThis presentation is based on the draft paper (OECD, forthcoming) . Please seek the permission of the author before citing this presentation.

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• This OECD work aims to: – Improve clarity on how 11 Eastern Europe,

Caucasus and Central Asian countries and their development co-operation partners are working together to finance climate action in the countries; and

– Explore ways in which these countries can assess readiness to access various climate finance sources.

• The work uses the data on “climate-related development finance” committed in 2013-2014 and reported by the DAC members and multilateral providers of finance to the OECD DAC Creditors Reporting System*.

• For definitions of climate-related development finance under the DAC CRS, see: http://www.oecd.org/dac/environment-development/Annex%2018.%20Rio%20markers.pdf

• For further information on the database, visit also: http://www.oecd.org/development/stats/rioconventions.htm

OECD work on climate-related development finance in EECCA countries

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Climate-related development finance vs total finance for climate actions (USD in 2014)

Global total CF (±340-650bln)

All CF from developed to developing countries (±40 - 175bln)

Climate-related ODA, climate funds, and MDB finance (±35-48bln)

Source: UNFCCC SCF (2016) 2014 Biennial Assessment and Overview of Climate Finance Flows Report

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Climate-related development finance*Global vs EECCA countries (committed 2013-14)

EECCA 7.1%(USD 3.3bln/y)

Global 92.9%(USD 47.3bln/y)

2013-2014

Mitigation vs Adaptation (USD bln/y)

Sources: OECD (forthcoming) Climate-related development finance in EECCA, based on OECD-DAC Creditor Reporting SystemNote(*): The financial flows are delivered through bilateral (mainly DAC members) and multilateral channels and calculated as a two-year average between 2013 and 2014.

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Comparison across the regions(Finance committed vs GDP per capita)

Ann

ual f

inan

ce c

omm

itted

(U

SD

bln

pe

r yea

r: av

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201

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Sources: OECD (forthcoming) Climate-related development finance in EECCA, based on OECD-DAC Creditor Reporting System

GDP per capita PPP (USD: 2014)

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Comparison across the regions(Finance committed vs Population)

Population (million: 2014)

Ann

ual f

inan

ce c

omm

itted

(U

SD

bln

pe

r yea

r: av

erag

e in

201

3 an

d 20

14)

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Development finance for climate action by country in EECCA (2013-2014)

Annual climate-related development finance flows committed to EECCA countries in 2013 and 2014

7Source: OECD (forthcoming) Climate-related development finance in EECCA, based on OECD-DAC Creditor Reporting System; WB (2016) World Development Indicators

8

0

200

400

600

800

1 000

1 200

0 5 000 10 000 15 000 20 000 25 000 30 000

GDP per capita PPP (2014)

Annu

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(USD

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201

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UZB

UKR

KAZ

TJKGEO

ARM BLR

AZETKM

MDA

KGZ

Ave.

AcronymsARM Armenia AZE Azerbaijan BLR Belarus GEO Georgia KAZ Kazakhstan KYR KyrgyzstanMDA Moldova TJK Tajikistan TKM Turkmenistan UKR Ukraine UZB UzbekistanAv. Average

Level of committed amounts vs GDP per capita (PPP) by EECCA countryAnnual climate-related development finance and GDP per

capita PPP (2-year average between 2013 and 2014)

Sour

ce: O

EC

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Clim

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-DAC

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Sectoral level analysis of climate-related development finance in EECCA

Annual climate-related development finance by sector (2-year average between 2013 and 2014)

Sources: OECD (forthcoming) Climate-related development finance in EECCA, based on OECD-DAC Creditor Reporting System

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Mainstreaming of climate-consideration into development finance in EECCA

Climate-related development finance as a share of total bilateral and multilateraldevelopment finance (2-year average between 2013 and 2014)

Sources: OECD (forthcoming) Climate-related development finance in EECCA, based on OECD-DAC Creditor Reporting System

(%)

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Financial instruments and concessionality

Sources: Based on the data from OECD (2016) OECD-DAC Creditor Reporting System

Annual climate-related development finance by financial instruments at EECCA regional level (2-year average between 2013 and 2014)

(*)Note: Information on concessionality is not available

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Major channels of finance in 2013-2014(Multilateral channels)

Major multilateral channels of climate-related development finance (2-year average between 2013 and 2014: USD mln per year)

Sources: OECD (forthcoming) Climate-related development finance in EECCA, based on OECD-DAC Creditor Reporting System

Multilateral

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Major channels of finance in 2013-2014(Bilateral channels)

Sources: OECD (forthcoming) Climate-related development finance in EECCA, based on OECD-DAC Creditor Reporting System

Major bilateral channels of climate-related development finance (2-year average between 2013 and 2014: USD mln per year)

Bilateral

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Access to dedicated climate funds/programmes

Major dedicated climate funds/programmes accessed by the EECCA countries

(Between 2007 and 2016)

Sources: Websites of individual climate funds/facilities; OECD (2015), Climate Fund Inventory, Prepared for the G20

(*) Note: Six countries (ARM, AZE, BLR, GEO, MDA and UKR) are eligible for NIF and Green for Growth Fund.

(The number of EECCA countries)

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Global EECCAInternational Access 30 3

Direct Access 11 0

International Access 13 2

Direct Access 3 0

Adaptation Fund (2011-2015)

Green Climate Fund (2015-2016)

Access modalities for the Adaptation Fund and the GCF (EECCA vs Global)

Sources: AF (2015) Independent Evaluation of the Adaptation Fund; GCF (2016) GCF Website

No EECCA country has used direct access modalities to date to apply for support from the Adaptation Fund or GCF.

 

Intended Nationally Determined Contributions

Nationally Appropriate Mitigation Actions

Low Emission Development Strategy

National-level adaptation strategy

National-level climate strategy

ARMAZEBLRGEOKGZKYGMDATJKTKMUKRUZB

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National-level climate policy documents (Examples of existing/planned ones)

 

Intended Nationally Determined Contributions

Nationally Appropriate Mitigation Actions

Low Emission Development Strategy

National-level adaptation strategy

National-level climate strategy

ARMAZEBLRGEOKGZKYGMDATJKTKMUKRUZB

Approved/submitted Being developed

Sour

ces:

OEC

D (f

orth

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Clim

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finan

ce in

EEC

CA,

bas

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IND

Cs

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Economic incentives for low-carbon development

Direct subsidies for private sector

Investment in publicly owned infrastructure

Fiscal/Tax incentives

Feed-in-Tariff or premium payments

Environmental labeling

ALL

e.g. KAZ

e.g. GEO, TJK, UKR, KGZ

e.g. BLR, MDA, UKR, UZB

e.g. UKR, BLR, ARM, AZE

Sources: UNECE/REN21 (2015) UNECE Renewable Energy Status Report; OECD (forthcoming) Climate-related development finance in EECCA, based on OECD-DAC Creditor Reporting System

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Country Fund

Armenia The Renewable Resources and Energy Efficiency Fund of Armenia (R2E2)

Belarus The Innovation Fund of the Ministry of Energy

Georgia The Georgian Energy Development Fund (GEDF)

Kazakhstan Samruk-Kazyna (Sovereign wealth fund)

Moldova The Energy Efficiency Fund

Uzbekistan The Fund for Reconstruction and Development

Selected examples of national funding entities in the EECCA countries

• Now being prepared for the 11 countries in Eastern Europe, Caucasus and Central Asia countries (to be finalised by end 2016)

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Individual country reports

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• A significant amount of climate-related development finance committed, while big difference among countries and sectors.

• Large share of finance committed to energy sector, while adaptation finance still low (even in the countries with priorities in adaptation)–larger gaps than global avg.

• Great potential to mainstream climate considerations into broader development finance (i.a. transport, agriculture, forestry, and water sectors)

• Overall, scaled-up finance still needed for climate actions from various financial sources.

Findings (1/3)

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• Further work needed also on how to better use international climate finance to mobilise more private and domestic green investments where relevant (e.g. by de-risking instruments, fiscal incentives, capital investments, TA for local banks & project developers.)

• A clearer picture of how/what/where climate finance is delivered within the country could help improve effectiveness of such finance.

Findings (2/3)

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• Analytical work needed to better understand; what readiness of each country to access CF is, which capacities/skills should be enhanced; how to do it, etc.

• Progress being made in development of climate policies, while worth considering how to better implement them and connect “dots”. (e.g. NDCs, LEDS, NAMAs, NAPs, TNAs and national climate and development policies/strategies).

• Pursuing Direct Access Modality could help to strengthen ownership over accessing and absorbing finance.

• National funding entities: potential actors to enhance ownership and efficiency?

Findings (3/3)

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• Greening finance– Reforming energy subsidies– Facilitating access to private-sector finance for green

investments (e.g. environmental lending)– Better financial planning in the public sector

• Greening industry• Water resource management and green growth• Measuring green growth

More work under the GREEN Action Programme

See also our latest Brochurehttps://issuu.com/oecd.publishing/docs/from_eap_to_green_action_programme_?e=3055080/36192948

See website http://www.green-economies-eap.org/

Thank you.

Contact: Takayoshi KatoTakayoshi.KATO@oecd.org

http://www.oecd.org/env/outreach/eap-tf.htm http://www.oecd.org/environment/