Sharm El-Sheikh – Rania Al-Mashat, Minister of International Cooperation, has said that there are vigorous Egyptian efforts to stimulate climate action and strengthen international efforts to mobilize fair climate funds for developing countries and emerging economies.
It comes during her participation in one of the sessions of the African Development Bank annual meetings in Sharm El-Sheikh on Tuesday.
Al-Mashat pointed out that the guide translates pledges into implementable projects while utilizing existing opportunities to maximize available international funds and work. This aims to increase and stimulate the participation of the private sector to support the climate action agenda.
She explained that the Sharm El-Sheikh Guide to Fair Financing contributes to reducing the risks associated with investing in developing countries by bridging the gap in the availability of information. It thus provides a clear conception and criteria for accessing climate action financing sources provided by financing agencies, as well as reviewing innovative financing models to open the way for private sector investment. It also sheds light on various successful projects compatible with climate change that can be replicated and developed in developing countries.
The Minister stressed that it is impossible to access climate finance without an approach based on partnership. The guide was prepared in cooperation with about 100 multilateral and bilateral development partners, private sector institutions, international alliances for climate finance, and non-profit organizations. The guide provides a list of capital providers, climate action funders, criteria for accessing funding sources, and their degree of risk appetite.
Al-Mashat stated that the Sharm El-Sheikh Guide to Fair Financing presents the future needs of climate finance, and compares them with current flows, as reports issued by the Climate Policy Initiative indicate that the total investments that the world needs annually until 2030 to keep the global temperature increase at a level of 1.5 A degree of about $4.5tn worldwide, while the needs of developing countries amount to about $842bn, and Africa alone about $250bn.
In this context, Al-Mashat said that the actual flows of climate finance between 2019-2020 amount to about $632bn, representing 14% of the actual needs, including $80bn for developing countries, representing 9% of their needs, and $29.5bn for Africa, amounting to about 11.8% of its actual needs. The Minister pointed out that the private sector has provided about $306bn in climate finance, of which $14bn has been directed to developing countries, and only $4bn to the African continent.
Al-Mashat pointed out the great discrepancy between the distribution of these funds at the level of regions in a manner that is not commensurate with the actual needs and their vulnerability to climate change, as well as at the sectoral level, where 90% of the climate funds are directed to efforts to mitigate the repercussions of climate change, especially in the energy and transportation sector, while only 7% is directed to the sector of adaptation to climate change, such as infrastructure, industry and land uses.
The Minister of International Cooperation emphasized the huge investments that the world needs in order to stimulate climate action. They amount to $100bn annually. She also stressed the importance of increasing efforts to mobilize climate finance in order to stimulate climate action and the transition to a green economy.
