southern african development community (sadc) climate
TRANSCRIPT
Southern African Development Community (SADC)
Climate Finance Flows
Leonie Routil, UNFCCC secretariat, [email protected]
Content
SADC Climate Finance Flows
I. Regional Perspective
II. Data availability
III. International Public Climate Finance
a) Total Climate Finance (principle and significant)
b) Funding Channels, Main Contributors
c) Financial Instruments
d) Themes (Mitigation, Adaptation, Cross-Cutting)
e) Sectors
IV. Clean Energy Investment
a) Technologies
b) Lenders
Regional perspective
Source: SADC.int
Member States
Angola,
Botswana,
Comoros,
Dem. Rep. of the Congo,
Eswatini,
Lesotho,
Madagascar,
Malawi,
Mauritius,
Mozambique,
Namibia,
Seychelles,
South Africa,
Tanzania,
Zambia,
and Zimbabwe
Regional Narrative
• Sustained economic growth over the past decade
• Access to clean water ~ 40%; Access to energy ~ 50%
• Fossil fuel share of electricity sources ~ 90%
• Expected population growth to over 500 million in 2050 (compared to 337 million in 2017)
• Climate vulnerability: particularly variability of rainfalls leading to droughts or flooding
Regional barriers
• Poverty and Inequality
• Unemployment
• Infrastructure backlogs
• Human capacity and skills
• Institutional capacity
Climate bonds initiativeIndividual country reporting
BNEF dataOECD data
Data availability for existing climate finance flows
International public climate finance
Bilateral
agenciesMDBs Climate funds
International private climate finance
Renewable
energy projects
Domestically sourced public and private climate finance
Green loans/
bonds
Government
expenditureFunds
OECD: Climate-related development finance, reported by OECD DAC members
BNEF: Bloomberg New Energy Finance
Other sectors
Climate bonds initiativeIndividual country reporting
BNEF dataOECD data
Section I - International public climate finance
International public climate finance
Bilateral
agenciesMDBs Climate funds
International private climate finance
Renewable
energy projects
Domestically sourced public and private climate finance
Green loans/
bonds
Government
expenditureFunds
OECD: Climate-related development finance, reported by OECD DAC members
BNEF: Bloomberg New Energy Finance
Other sectors
Total Climate Finance Inflows 2010 - 2017
• The average finance inflow to the SADC region with climate as a principal
objective was 804 million USD/year between 2013 and 2017
• Including development projects with climate as a co-benefit, the average
was 2 billion USD/year
• Total CF inflow to the region, 2013-27: 13.4 billion USD
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2010 2011 2012 2013 2014 2015 2016 2017
Mio
USD
Total Climate Finance (Principal and climate co-benefits)
Principal Climate Finance
• The three main recipients of public CF in the
region are Tanzania, South Africa, and
Mozambique
Source: OECD
2,706
2,651
1,503
1,414
1,310
1,304
859
384
359
276
178
158
94
80
74
49
0 1,000 2,000 3,000
Tanzania
South Africa
Mozambique
Malawi
Zambia
Dem. Rep. of the Congo
Madagascar
Angola
Namibia
Zimbabwe
Mauritius
Botswana
Lesotho
Comoros
Swaziland
Seychelles
USD Mio
Total Climate Finance Inflows 2013-2017
Incomplete data
from MDBs
Climate Finance Inflows by Country – 2010-2017
0
50
100
150
200
250
2013 2014 2015 2016 2017
Botswana
Zimbabwe
Angola
Mauritius
Namibia
0
100
200
300
400
500
600
700
800
900
1,000
2013 2014 2015 2016 2017
Madagascar
Dem. Rep. Congo
Zambia
Malawi
Mozambique
South Africa
Tanzania
• Yearly fluctuations are high and heterogenous across countries
• Slightly increasing trend of principal CF inflow in most countries
0
10
20
30
40
2013 2014 2015 2016 2017
Seychelles
Comoros
Eswatini
Lesotho
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
2013 2014 2015 2016 2017
Total CF, Percentage of GDP
Malawi Mozambique Madagascar Comoros
Tanzania Zambia Lesotho Dem. Rep. Congo
South Africa Namibia Eswatini Mauritius
Zimbabwe Botswana Seychelles Angola
• Trend less clear when looking at CF as percentage of GDP
• The countries receiving the most CF relative to their GDP are Malawi
(avg. 4.8% of GDP), Mozambique (2.12%), Madagascar (1.61%)
Source: OECD
Funding Channels, Main Contributors – SADC Region
Source: OECD
58%
33%
9%
Bilateral MDBs Climate Funds
0 500 1,000 1,500 2,000 2,500
Other bilateral
Italy
Australia
Denmark
Finland
Switzerland
Netherlands
Ireland
Norway
Belgium
United Kingdom
Sweden
Japan
United States
France
EU institutions (excl. EIB)
Germany
Mio USD
Bilateral CF Providers
0 100 200 300 400
GGGI
Adaptation Fund
NDF
GCF
CIF
GEF
IFAD
Mio USD
Climate Funds
0 500 1,000 1,500 2,000 2,500
IFC
EIB
AfDB
WB
MDBs
Funding Channels by Country
• Strong variance of main provider types between countries
• Countries receiving less overall CF rely more heavily on one provider-type
•T
ota
l CF
, Thousand U
SD
Source: OECD
Financial Instruments - SADC Region
Source: OECD
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
2013 2014 2015 2016 2017
SADC Region: Yearly Climate Finance Inflows by Financial Instruments
49%48%
1% 2%
SADC Region
• Compared to the global average, SADC’s climate finance has a higher percentage of grants,
lower percentage of debt instruments;
• Equal share of debt and grants;
• No clear time trend in finance instruments;
29%
67%
2% 2%
Global climate-related development finance by Financial Instruments
Grants
Debt Instruments
Equity and Shares inCollective InvestmentVehicles
Unallocated /Unspecified
Financial Instruments by Provider Type and Theme – SADC Region
• In bilateral flows grants are the main
instrument used, with mitigation project
receiving equally as much concessional
debt
• MDBs use mainly debt instruments
• Climate Funds mainly give grants
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Ad
apta
tio
n
Mit
igat
ion
Cro
sscu
ttin
g
Ad
apta
tio
n
Mit
igat
ion
Cro
sscu
ttin
g
Ad
apta
tio
n
Mit
igat
ion
Cro
sscu
ttin
g
Bilateral MDBs Climate Funds
Unallocated / Unspecified
Equity
Non-concessional debt
Concessional debt
Grants
Source: OECD
Themes of Funded Projects
Source: OECD
14%
47%
39%
SADC Region Climate Finance Inflows by Themes,Percent of Total 2013 - 2017
Cross-cutting
Mitigation
Adaptation
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014 2015 2016 2017
USD
Mill
ion
Total Yearly Climate Finance Inflows to the SADC region by themes (mitigation, adaptation, cross-
cutting projects)
• Relatively well balanced distribution of finance between Adaptation and Mitigation projects
• Share of Adaptation finance increasing
Sectors 1/2: Inflow to Main Receiving Sectors by Theme
Source: OECD
78
154
262
237
140
309
311
140
423
1,042
1,667
3,360
69
23
164
103
211
144
89
955
1,357
423
1,601
4,163
Education
Disaster risk reduction
Multisector aid
General government
Industry
Health
Social services
Transport and storage
General environment
Water and Sanitation
AFOLU
Energy
Adaptation Mitigation
• Main sectors receiving adaptation finance: AFOLU, Water and Sanitation, General Environment, Transport & Storage
• Main sectors receiving mitigation finance: Energy, AFLOU, General Environment, Transport and Storage
Country differences in main receiving sectors
Source: OECD
0
500
1,000
1,500
2,000
2,500
3,000
0%10%20%30%40%50%60%70%80%90%
100%
Energy AFOLU Transport and storage Water and Sanitation General environment
Not specified Social services Health Multisector aid Industry
General government Disaster risk reduction Food Aid Education Multisector
Emergency response ICT Finance
• Significant differences between countries.
• Energy, AFOLU and Water & Sanitation relevant CF sectors for most countries.
Project Activity Type
• 60% of the activities receiving climate finance are focused on projects on infrastructure or production
• 20% is focused on capacity building
• 11% is on delivering services such as in health, education and social sectors
Source: OECD
Mitigation Sectors - Project Activity Types
• In energy sector, 10% of flows went to capacity building activities.
• Grid networks received the most of infrastructure finance (35%).
• In agriculture, forestry, and land use (including fishing), 28% of
mitigation finance went to capacity building and research.
• Project implementation finance goes primarily to agriculture and
land use projects.
• Research expenditures are almost exclusively going towards
agriculture.
Source: OECD
Adaptation Sectors – Project Type
• In the water and sanitation sector, 26% of adaptation
finance are going to capacity building.
• In agriculture, forestry, and land use, 24% of
adaptation finance went to capacity building and
research.
• 66% went to project implementation, mainly rural
and agricultural development.
Source: OECD
Climate bonds initiativeIndividual country reporting
BNEF dataOECD data
Data availability for existing climate finance flows
International public climate finance
Bilateral
agenciesMDBs Climate funds
International private climate finance
Renewable
energy projects
Domestically sourced public and private climate finance
Green loans/
bonds
Government
expenditureFunds
OECD: Climate-related development finance, reported by OECD DAC members
BNEF: Bloomberg New Energy Finance
Other sectors
Renewable Energy Investment in SADC Region by Technology 2010 - 2017
Source: Bloomberg NEF
0
1000
2000
3000
4000
5000
6000
7000
2010 2011 2012 2013 2014 2015 2016 2017 2018
USD
Mill
ion
1
10
100
1,000
10,000
100,000
1,000,000
10,000,000
100,000,000
Tho
usa
nd
USD
Solar
Wind
Hydro Small
Biomass & Waste
Biofuels
Energy Smart Technologies
Low Carbon Services & Support
Data not available on Comoros, Eswatini, Mauritius, Seychelles
• High Fluctuation in RE investments, might be
explained by RE IPP tenders;
• Total RE Investment 2010-2018: 24 bn
• Average: 2.7bn
• Obvious heterogeneity among countries
Energy Capacity Installed
0
2000
4000
6000
8000
10000
12000
14000
2010 2011 2012 2013 2014 2015 2016 2017
New Capacity installed since 2010 (cumulative)
PV Commercial
Biomass & Waste
Hydro Small
PV Utility
Wind Onshore
Hydro Large
Nuclear
Gas
Oil
Coal
Source: Bloomberg NEF
Lenders to the Region, according to BNEF research
MultilateralClimate Investment FundsWB GroupEuropean Investment Bank
Bilateral - PublicExport-Import Bank of IndiaExport-Import Bank of ChinaAgence Francaise de Developpement EPICRepublic of South Africa Economic Development DepartmentRepublic of NamibiaDevelopment Bank of Southern Africa Ltd
Bilateral - PrivateStandard Bank Group LtdAbsa Group LtdNedbank Group LtdFirstRand LtdCapricorn Investment Group Ltd Consolidated Infrastructure
Group LtdInvestec PLCInvestec LtdHSBC Holdings PLCOverseas Private Investment Corp
• Fossil fuels still dominant.
• Share of RE increasing.
Summary
• Avg. CF to SADC region 2bn/year
• Slightly increasing trend • Mainly provided bilaterally
• Correlation between total CF and balanced
share of bilateral/multilateral sources
• Equal share of grants and debt instruments
• Bilateral and Climate Funds providing
grants, MDBs using debt instruments
• Balanced adaptation / mitigation finance
• Share of adaptation increasing
• Commonly important sectors in the region:
Energy, AFOLU, Water & Sanitation
• Finance for technical assistance
makes up between 10% and
28%, depending on sector
Southern African Development Community (SADC)
Climate Finance Flows
Thank you for you attention!
Leonie Routil, UNFCCC secretariat, [email protected]
Climate bonds initiativeIndividual country reporting
BNEF dataOECD data
Data availability for existing climate finance flows
International public climate finance
Bilateral
agenciesMDBs Climate funds
International private climate finance
Renewable
energy projects
Domestically sourced public and private climate finance
Green loans/
bonds
Government
expenditureFunds
OECD: Climate-related development finance, reported by OECD DAC members
BNEF: Bloomberg New Energy Finance
Other sectors
Emerging Markets Green Bonds
Source: Climae Bonds Initiative
• First Emerging Market Bonds were issued 2012 in South Africa by the Industrial Development Corporation
• The Republic of Seychelles issued the first sovereign blue bond (USD15m) in 2018
• Nedbank among the top 5 commercial issuers of EM Green bonds
DBSA Green Finance
DBSA is currently working with the government of South Africa to develop policy and capacity incentives for mainstreaming biodiversity and ecosystems values into national, regional and local development policy and finance.
DBSA Green Finance Commitments in 2017 USD Mio
Green Energy and Mitigation of GHGs 136
Adaptation 33
Other 14
Total Green Commitments 183
Source: IDFC