Page 13 - AsiaElec Week 44 2021

AsiaElec RENEWABLES AsiaElec

Climate Investment Funds issue

new generation of green bonds

GLOBAL THE World Bank has backed the issue of to turn this into a very, very powerful virtuous
$500mn of green bonds ever year for 10 years circle – and that’s the challenge,” he told the sum-
in a bid to raise private capital to scale up clean mit, Reuters reported.
energy and sustainable infrastructure in emerg- Under the programme, which is backed by
ing economies. the United States, United Kingdom, Japan and
The new green initiative was launched by the others, CIF would monetise existing assets from
UK, the US and Japan, and involves the Climate its Clean Technology Fund to issue bonds in
Investment Funds’ (CIF) Clean Technology the capital markets. The proceeds will provide
Fund (CTF) unveiling the new CIF Capital Mar- a predictable flow of new concessional climate
ket Mechanism. finance for eligible public and private projects
It is the first time a multilateral climate fund that yield long-term, sustainable gains in key
such as CIF has leveraged its balance sheet in the emerging markets.
capital markets to unlock urgently needed pri- The funds raised will be disbursed through
vate investment to help narrow the clean infra- multilateral development bank partners as
structure gap in developing countries. equity, debt, mezzanine finance, guarantees, and
The World Bank said that the CTF’s access to other forms of finance to help create sustainable
capital markets will provide an important con- markets and scale investment in cutting-edge
tribution to scaling up scarce public capital to clean energy and infrastructure projects.
achieve climate ambition. Suitable projects include energy storage sys-
US Treasury Secretary Janet Yellen said: “The tems, distributed power generation, coal transi-
United States is pleased to join with other coun- tion infrastructure, floating solar farms, offshore
tries to support the Climate Investment Funds wind turbines and electric vehicle (EV) fleets.
Capital Markets Mechanism. This innovative Innovative financing mechanisms are in
initiative will help attract significant private cli- greater demand as more investors look for ways
mate finance and provide new funding for the to align portfolios with environmental, social
Clean Technology Fund with its valuable work and governance (ESG) priorities. In OECD
in assisting countries with their transition to a countries alone, institutional investors manage
clean energy future.” nearly $100 trillion in assets.
Minister of Finance of Japan Shunichi Suzuki Clean energy transitions in emerging econ-
said: “We welcome the launch of [the] new CIF omies are central to meeting and exceeding the
Capital Market Mechanism. In order to achieve Paris Agreement and Sustainable Development
our common goal of [the] 1.5 degree target, Goals.
Japan supports developing countries to accel- Developing countries are home to two-thirds
erate the transition away from coal through the of the world’s population and on track to con-
financing mechanism with relevant multilat- sume 70% of energy supply and represent 60%
eral development banks. Japan recognises the of GDP. In 2020, however, developing nations
importance of transition finance and supports received just one-fifth of clean energy invest-
best available options based on each country’s ment, seven times below the threshold needed
circumstance.” to achieve a net-zero economy by 2050.
The announcement, timed to coincide with CTF donors are Australia, Canada, France,
the COP26 conference, came as Mark Carney Germany, Japan, Sweden, the United Kingdom
told COP26 that the world needed $100 trillion and the United States.
over the next three decades to reach net zero by CIF has generated an additional $61bn in
2050. co-financing for mitigation and adaptation
“The money is here – but that money needs interventions at scale in 72 recipient countries.™
net zero-aligned projects and (then) there’s a way

Week 44 03•November•2022 www. NEWSBASE .com P13