Financing of mitigation and adaptation measures
The term climate finance broadly designates all financial instruments used by the public and private sectors for climate action at the international, national and subnational level. In climate policy discussions, those funds have a particular role and are mainly provided by industrialized nations for the benefit of less developed countries.
The aim of climate finance is to promote low-carbon development and support in adapting to local risks caused by climate change. For example, the Green Climate Fund (GCF) is to serve as one of the main channels for multilateral financial transfers with 100 billion dollars to be mobilized annually by 2020.
Comprehensive consulting on climate finance
Financial experts at First Climate provide strategic and conceptual advisory services on the topic of climate finance, including:
- Structuring funding programs
- Design and evaluation of specific instruments
- Financial flow analyses for both financiers and recipients
Supporting the designing of climate finance instruments
First Climate has extensive experience in the design and management of climate finance instruments. This includes carbon funds and programs (“results-based finance”) as well as guarantee funds. We are familiar with the requirements of our investors and the needs of recipients – prerequisites for delivering professional advice.
Involving the private sector
All signs point towards a sharp increase in climate-related spending in the coming years. According to the International Energy Agency, some $16.9 trillion US dollars will need to be invested in power generation and transmission to meet growing energy demand by 2035, with renewable energy sources accounting for some 60% of these investments. In this context, public climate finance can help directing private capital towards more sustainable investment solutions.
A recent example is a guarantee program to promote renewable energy investments for self-supply by small and medium-sized businesses in Chile. On behalf of the Chilean Government and the German Development Bank KfW, First Climate supported the detailed design of the guarantee program aimed at mobilizing bank loans for such projects. Similar guarantee programs could deliver a significant contribution to the growth of renewable energies in other countries.