Industrialized nations on Friday pledged more than US$6.1 billion to international investment funds designed to help developing countries adopt clean energy technologies to reduce greenhouse gas emissions.
Ten countries (Australia, France, Germany, Japan, The Netherlands, Norway, Sweden, Switzerland, the United Kingdom, and the United States) gave their support to the Climate Investment Funds (CIF), according to the World Bank, which formally approved the funds on July 1.
The first proposals to benefit from funding under the CIF are expected to be announced early in 2009.
"These funds are a concrete step forward toward reconciling the challenge of global climate change with the challenge of development and overcoming poverty." World Bank Group President Robert B. Zoellick said. "We hope it is only the beginning, however, and that other nations will also contribute to enable even more financing for climate action."
Two trust funds have been created to disburse grants, loans and risk-mitigation instruments. They will be administered through the multilateral development banks and the World Bank Group.
The Clean Technology Fund, will invest in projects and programs in developing countries that contribute to the demonstration, deployment, and transfer of low-carbon technologies. The projects or programs must have a significant potential for long-term greenhouse gas savings.
The second fund, the Strategic Climate Fund, will be broader and more flexible in scope. It will serve as an overarching fund for various programs to test innovative approaches to climate change. The first program under this fund is a pilot aimed at increasing climate resilience in developing countries. A Forest Investment Program and a Scaling-Up Renewable Energy Program are also expected to be created in the coming months.
"The Inter-American Development Bank (IDB), along with our counterpart
institutions in Asia, Africa and Europe, is fully committed to
partnering with the World Bank Group in the implementation of this
vital new source of financing," said IDB President Luis Alberto Moreno,
also attending the meeting. "We think these funds could help to
jump-start programs for scaling up low carbon investments Latin America
and the Caribbean, and we see great potential for transferring ideas
and technology to and from other regions."
The United States has pledged US$2 billion over three years to the fund. The United Kingdom announced a commitment of £800 million (approximately US$1.5 billion at current exchange rates).
Japan pledged up to US$1.2 billion.
According to the World Bank, developing countries will have an equal voice in the governance structures of the funds, and decisions on the use of funds will be made by consensus. An annual Partnership Forum will be held to provide a venue for talks on the strategic directions, results, and impacts of the CIF, as well as provide a platform to share lessons learned as widely as possible.
The first Partnership Forum, scheduled for October 14, 2008, will be a broad-based meeting of stakeholders, including donor and recipient countries, the United Nations and its related agencies, the Global Environment Facility, UNFCCC, the Adaptation Fund, bilateral development agencies, non-governmental organizations, private sector entities, and scientific and technical experts.
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