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CDB approves US$306 million in loans, grants in 2016

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CDB President, Dr William Warren Smith

In 2016, the Caribbean Development Bank (CDB) approved US$306 million in loans and grants, the highest approval total during the past five years. And of the countries for which funding was approved, Belize, Saint Lucia and Suriname were the three largest beneficiaries of loans.

Dr William Warren Smith, CDB president, made this announcement during the bank’s annual news conference on Friday, February 17, in Barbados.

Smith pointed out that, in addition to the grants approved in 2016, the Bank began implementing the United Kingdom Caribbean Infrastructure Partnership Fund (UK CIF). UK CIF is a £300 million grant programme for transformational infrastructure projects in eight Caribbean countries and one British overseas territory, which CDB administers. £16.4 million in grants was approved for projects and technical assistance in Antigua and Barbuda, Belize, Dominica and Grenada.

“We reached noteworthy milestones in deepening our strategic partnerships and successfully mobilising financial resources that our BMCs can use to craft appropriate responses to their development challenges,” said Smith, noting that UK CIF was among the bank’s partnership highlights in 2016.

Last year, the bank also signed a credit facility agreement with Agence Française de Développement. It included a US$33 million loan to support sustainable infrastructure projects and a EUR3 million grant to fund feasibility studies for projects eligible for financing under the credit facility.

Also in 2016, CDB entered an arrangement with the government of Canada for the establishment and administration of a CA$5 million fund to build capacity in the energy sector, the Canadian Support to the Energy Sector in the Caribbean Fund.

These recent partnerships are part of the bank’s drive to raise appropriately-priced resources mainly for financing projects with a strong focus on climate adaptation, renewable energy and energy efficiency.

During his statement, Smith highlighted that the bank became an accredited partner institution of both the Adaptation Fund and the Green Climate Fund in 2016.

“The Adaptation Fund and the Green Climate Fund have opened new gateways to much-needed grant and or low-cost financing to address climate change vulnerabilities in all of our BMCs,” Smith told the media.

The president also confirmed that, in 2016, CDB completed negotiations for the replenishment of the Special Development Fund (SDF), the bank’s largest pool of concessionary funds. Contributors agreed to an overall programme of US$355 million for the period 2017-2020, and lowered the SDF interest rate from a range of 2 to 2.5 percent to 1 percent. The programme approved includes US$45 million for Haiti and US$40 million for the Basic Needs Trust Fund. This marked the ninth replenishment of the SDF, which helps meet the Caribbean region’s high-priority development needs.

In his statement, Smith also reaffirmed the bank’s commitment to drive sustained and inclusive income growth, complemented by improvements in living standards in its BMCs. This, he said, was critical, as economic growth across the region remains uneven, with fragile recovery expected to continue into 2017.

“At the core of our operations is the desire to better the lives of Caribbean people. That is the context within which we help to design, appraise and evaluate every project we finance,” Smith said.

Credit: Caribbean News Now!

Caribbean countries to benefit from new global climate fund

Baron Patricia Scotland (Photo: CMC)

Six Caribbean Community (CARICOM) countries are seeking assistance for funding of climate related projects from the recently launched Commonwealth Climate Finance Access Hub.

The agreement for the new Commonwealth initiative was signed by Commonwealth Secretary-General Patricia Scotland and Prime Minister of Mauritius Anerood Jugnauth.

The first countries to formally request assistance from the Commonwealth Climate Finance Access Hub are Antigua and Barbuda, Barbados, Dominica, Guyana, Jamaica, Mauritius, Namibia, Nauru, Solomon Islands, St Kitts and Nevis, Tonga, and Vanuatu.

Jamaica’s Ministry of Economic Growth and Job Creation said it “looked forward” to receiving support through the hub.

“The placement of a climate finance adviser in our ministry is a priority and a critical step in building our capacity and supporting efforts to improve access and use of available climate finance,” the ministry said in a statement.

The hub, which is being hosted by the Mauritius government, is intended to assist governments deal with the ravaging effects of climate change by accessing funding from a global fund target of $100 billion a year by 2020.

Endorsed by Commonwealth Heads of Government, the Commonwealth Climate Finance Access Hub, will place national climate finance advisers for two years at a time in recipient countries, who will help host ministries to identify and apply for funding streams.

The innovative approach will build on-the-ground capacity to access multilateral funds such as the Green Climate Fund, Adaptation Fund and Climate Investment Funds, as well as private sector finance.

The Commonwealth Climate Finance Access Hub is supported with a $1 million grant (AUS) by the Australian government and a £1 million grant (GBP) from the Commonwealth Secretariat, plus in-kind support from the Government of Mauritius.

Credit: Jamaica Observer

Caribbean seeks to take full advantage of new U.N. climate fund

Dr Kenrick Leslie, CBE; Credit: Earl Green

Dr Kenrick Leslie, CBE; Credit: Earl Green

The South Korea-based Green Climate Fund (GCF) is open for business, and Caribbean countries are hoping that it will prove to be much more beneficial than other global initiatives established to deal with the impact of climate change.

“Despite our region’s well-known, high vulnerability and exposure to climate change, Caribbean countries have not accessed or mobilised international climate finance at levels commensurate with our needs,” said Dr. Warren Smith, the president of the Barbados-based Caribbean Development Bank (CDB).

The CDB, which ended its annual board of governors meeting here on Thursday, May 29, had the opportunity for a first-hand dialogue on the operations on the GCF, through its executive director, Hela Cheikhrouhou, who delivered the 15th annual William Demas Memorial lecture.

But even as she addressed the topic “The Green Climate Fund; Great Expectations,” Smith reminded his audience that on a daily basis the Caribbean was becoming more aware of the severe threat posed by climate change.

“Seven Caribbean countries…are among the top 10 countries, which, relative to their GDP, suffered the highest average economic losses from climate-related disasters during the period 1993-2012.

“It is estimated that annual losses could be between five and 30 percent of GDP within the next few decades,” he added.

According to a Tufts University report, published after the 2007 Intergovernmental Panel on Climate Change (IPCC) study and comparing an optimistic rapid stabilisation case with a pessimistic business-as-usual case, the cost of inaction in the Caribbean will have dramatic consequences in three key categories. Namely hurricane damages, loss of tourism revenue and infrastructure damage due to sea-level rise.

The costs of inaction would amount to 22 percent of GDP for the Caribbean as a whole by 2100 and would reach an astonishing 75 percent or more of GDP by 2100 in Dominica, Grenada, Haiti, St. Kitts and Nevis, and Turks and Caicos.

“In the Caribbean, the concern of Small Island Developing States is all too familiar – the devastating effects of hurricanes have been witnessed by many. Although Caribbean nations have contributed little to the release of the greenhouse gases that drive climate change, they will pay a heavy price for global inaction in reducing emissions,” Cheikhrouhou warned.

Executive director of the Belize-based Caribbean Community Climate Change Centre (CCCCC), Dr. Kenrick Leslie told IPS that regional countries were now putting their project proposals together to make sure they could take full advantage of the GCF.

“The CARICOM [Caribbean Community] heads of government, for instance have asked the centre to help in putting together what they consider bankable projects and we are in the process of going to each member state to ensure that we have projects that as soon as the GCF comes on line we would be among the first to be able to present these projects for consideration.”

Leslie said that in the past, Caribbean countries had been faced with various obstacles in order to access funds from the various global initiatives to deal with climate change.

“For instance if we mention the Clean Development Mechanism [CDM], the cost was prohibitive because our programmes were so small that the monies you would need upfront to do it were not attractive to the investors.”

He said the Caribbean also suffered a similar fate from the Adaptation Fund, noting “we have moved to another level where they said we will have greater access, but again the process was much more difficult than we had anticipated.”

The GCF was agreed at the 16th session of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC) held in Cancun, Mexico.  Its purpose is to make a significant contribution to the global efforts to limit warming to 2°C by providing financial support to developing countries to help limit or reduce their greenhouse gas emissions, and to adapt to the unavoidable impacts of climate change. There are hopes that the fund could top 100 billion dollars per annum by 2020.

“Our vision is to devise new paradigms for climate finance, maximise the impact of public finance in a creative way, and attract new sources of public and private finance to catalyse investment in adaptation and mitigation projects in the developing world,” the Tunisian-born Cheikhrouhou told IPS.

She said that by catalysing public and private funding at the international, regional, and national levels through dedicated programming in climate change mitigation and adaptation, and as a driver of climate resilient development, the GCF is poised to play a relevant and timely role in climate action globally.

Cheikhrohou said that it would be most advisable if Caribbean countries “can think of programmatic approaches to submit proposals that are aggregating a series of projects or a project in a series of countries.”

She said that by adopting such a strategy, it would allow regional countries “to reach the scale that would simplify the transaction costs for each sub activity for the country” and that that she believes the GCF has “built on the lessons learnt from the other mechanisms and institutions in formulating our approach.

“To some extent there is embedded in the way of doing work this idea of following the lead of the countries making sure they are the ones to come forward with their strategic priorities and making sure we have the tools to accompany them through the cycle of activities, projects or programmes starting with the preparatory support for the development of projects,” she told IPS.

Selwin Hart, the climate change finance advisor with the CDB, said the GCF provides an important opportunity for regional countries to not only adapt to climate change but also to mitigate its effects. He is also convinced that it would assist the Caribbean move towards renewable energy and energy efficiency.

“The cost of energy in the Caribbean is the highest in the world. This represents a serious strike on competitiveness, economic growth and job creation and the GCF presents a once in a lifetime opportunity for countries to have a stable source to financing to address the vulnerabilities both as it relates to importing fossil fuels as well as the impacts of climate change,” he said.

Credit: Thomas Reuters Foundation; CMC/pr/ir/2014
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