EBRD backs $0.5bn extension in Green Climate Fund partnership

The European Bank for Reconstruction and Development (EBRD) has approved additional headroom for the next phase of its large-scale partnership with the Green Climate Fund (GCF).

An extension of the cooperation by $497mn would support thousands of individual investments in technologies that cut emissions and enhance resilience to climate change, it said.

The GCF-EBRD Green Energy Financing Facilities (GEFF) programme, inaugurated in 2018, spans three regions and directs new climate finance flows to Armenia, Egypt, Georgia, Jordan, Republic of Moldova, Mongolia, Morocco, Serbia, Tajikistan and Tunisia. Sums lent to local partner financial institutions are on-lent to private sub-borrowers for investments in climate change mitigation and adaptation projects.

“The new extension will help maintain momentum and continue scaling up gender-responsive green financing,” the EBRD said, adding: “It is estimated that the latest extension will avoid CO2 emissions of 800,000 tonnes per year, which is equivalent to retiring 125 MW of coal-fired electricity generation capacity. The extension enhances women and men’s equal opportunity to access green finance and technologies with a view to reducing existing gender gaps.”

Of the additional framework headroom, $373mn will come from the development bank’s ordinary resources, with an equivalent of up to $124mn of concessional financing provided by the GCF.

The programme, worth $1.4bn in all, benefits from GCF support amounting to $378mn, out of which $344mn is concessional co-funding and $34mn is grants for technical assistance. Other donors supporting the programme include the GCF, the European Union, the Republic of Korea, Austria, Luxembourg, Japan and Turkey.

As of end-2020, GCF GEFF products had been launched in eight countries in partnership with 18 local financial institutions, and had supported over 500 green investments, the EBRD said.

The EBRD’s Green Energy Financing Facilities (GEFF) provide credit lines to open up new financing paths and new markets of sustainable development for people pursuing climate investments, and addressing the barriers women face, the lender said, noting that the GEFF is a cornerstone of the EBRD’s ambitious aim to become a majority green investor by 2025.

The GCF was set up by 194 countries, which are parties to the United Nations Framework Convention on Climate Change (UNFCCC) in 2010 to deliver equal amounts of funding to mitigation and adaptation initiatives in developing countries.

The GCF-EBRD’s partnership for transformation has seen the GCF support six EBRD programmes with $830mn, catalysing more than $3.6bn in total project value, the EBRD said. The GCF is the largest climate fund in the world, supporting the efforts of developing countries to respond to the challenge of climate change, it added.