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Climate Finance Innovators

Background and Objective

When compared with other regions, Africa was late to benefit from the CDM. The regulatory advancements, capacities and projects resulting from the great effort seen in CDM implementation now go unused because of the uncertainties surrounding the global carbon market. Meanwhile, many African states are striving for improved access to financing from the Green Climate Fund (GCF). While GCF operationalisation continues, expectations regarding the flow of funds have yet to be fulfilled.

Against this backdrop, the Federal Ministry for the Environment (BMU) is promoting the Climate Finance Innovators project as part of its International Climate Initiative (IKI). In cooperation with the three partner countries – Ethiopia, Senegal and Uganda – the project focuses on piloting replicable climate financing models designed to contribute to the respective country’s NDC and boost local capacities. The experience gained in the pilots will flow into the climate negotiations and will also inform the design of the instruments to be used under the Paris Agreement.
 

Implementation

The Climate Finance Innovators project is being implemented by Perspectives in collaboration with Climate Focus, AERA, Carbon Africa, Afrique Energie Environnement and South South North. CDM components (such as MRV methodologies and potentially certificates) are used to develop innovative climate financing proposals and are applied to climate financing projects aimed, for example, at making the impact of reductions more transparent. The success, sustainable implementation and policy integration of the climate financing proposals are ensured by accompanying measures designed to develop capacities and foster close cooperation with qualified local partners.

The knowledge and experience gained in developing innovative climate financing models is subsequently used to strengthen both regional institutions and subregional stakeholders, such as GCF-accredited organisations, implementing organisations and independent auditors known as designated operational entities (DOEs) under the CDM. In addition, methodologies and models are developed for use in future climate financing proposals and/or for regional-level replication.

Accompanying policy briefs on relevant UNFCCC topics prepare for and inform abstract climate negotiation processes from an African perspective, thus contributing to opinion-forming in Africa, while the publication of manuals and studies gives both a broad user community and the specialist public access to the experience gained. The overall aim is to raise awareness to the potential for linking market mechanisms with climate financing, both in climate negotiations and in public debate.   
   

Milestones and Outlook

Since the CFI project was first implemented, numerous studies and policy papers have been published on a range of focal topics, among them the role of Africa in the Article 6 negotiations and the status of the talks on CDM transition. At workshops, in webinars and at conferences such as COP25, Africa Climate Week and Innovate4Climate, the team reported on the experience gained with the project so far, further fostering exchange and broader debate.

Development of the climate financing models continues apace. This August, the Green Climate Fund approved the ASER solar rural electrification project, which was developed with the technical support of the Climate Finance Innovators team. Funding in the amount of USD89 million was mobilised as a result.

Climate Finance Innovators - Linking Market Mechanisms and Climate Finance in Africa

Countries: Ethiopia, Uganda, Senegal

Role of BMU: Co-financed by BMU

Lifecycle: 2018 - 2021

Implementation: Perspectives Climate Group

Other Organisations Involved: Climate Focus, AERA Group, Carbon Africa Limited, Afrique Energie Environnement (AEE) & South South North

Further Information: www.climatefinanceinnovators.com

Contact: Stephan Hoch, hoch@perspectives.cc

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