The Climate Investment Funds, one of the world’s largest multilateral climate funds, has announced the deployment of up to $1 billion in funding as part of CIF’s Industry Decarbonization investment program.
CIF said in a statement on last Thursday that it also launched a call for expressions of interest, inviting developing countries to participate in this first-of-its-kind program.
The Industry Decarbonization investment program offers unprecedented private sector engagement – encouraging businesses, governments, and multilateral development banks to work hand in hand to decarbonize heavy-emitting sectors and reach climate goals, it said.
According to the statement, the industrial sector currently represents one-quarter of global greenhouse gas emissions, and this number is climbing fast.
It noted developing countries rely on industrial output to grow their economies.
Cited an example, it said global demand for aluminum is expected to rise by 80 percent by 2050.
Cement and steel are also increasingly needed, notably to support the renewable energy transition, it added.
It is noted that CIF’s Industry Decarbonization program will invest in pioneering low-carbon pathways in these sectors and more to reduce the climate impact of heavy-emitting industries.
The program will spur innovation, provide proof of concepts for new technologies, and advance a just transition.
CIF’s predictable and flexible concessional funding will be deployed through partner multilateral development banks.
To ensure seamless public/private collaboration, private sector activities will be integrated into the larger programmatic approach from inception.
Governments are encouraged to work closely with private sector counterparts and, in a first for CIF, may even elect to submit joint expressions of interest with private sector organizations.
The Industry Decarbonization program includes a dedicated private sector set-aside: up to 100 percent of total financing can be assigned to projects led by the private sector or that crowd in significant private sector co-investments, with a minimum allocation of 50 percent.
The Industry Decarbonization program deploys ambitious social safeguards, in line with CIF’s just transition principles, ensuring the labor force is extensively engaged in the process and green job opportunities are inclusive.
Investment plans will facilitate adaptative measures, employment promotion, and training for workers.
Additionally, project designs must analyze gender gaps and barriers faced by women and other marginalized groups, with specific actions in response and indicators to monitor progress.
CIF’s Industry Decarbonization investment program is part of the $8.6 billion Clean Technology Fund.
The expressions of interest received will be evaluated by an independent expert panel who will submit recommendations to the Clean Technology Fund’s Trust Fund Committee.
Selected countries will be invited to develop investment plans, setting out strategically linked investments unified by a transformative vision.
“The future depends on decarbonizing heavy emitting sectors. To meet our climate goals, we need industry’s emissions to decline by 20 percent by 2030 and 93 percent by 2050,
“Crucially, industrial decarbonization and green supply chain jobs can drive a just and prosperous transition. This is what CIF was created for, to accelerate technologies of the future to solve our greatest climate challenges, ” said Tariye Gbadegesin, Chief Executive Officer, Climate Investment Funds.
According to him, the Industry Decarbonization program is set to make available up to $1 billion in concessional funding to be invested alongside the multilateral development banks, governments, and forward-thinking businesses that are eager to innovate and test new solutions for greening industry.
Bruno Carrasco, Director General, Climate Change and Sustainable Development Department, Asian Development Bank (ADB), said that as the Asia-Pacific region accounts for more than half of the world’s greenhouse gas emissions, ADB can play a pivotal role in driving the transition to cleaner energy systems and decarbonizing hard-to-abate sectors.
“The launch of CIF’s Industry Decarbonization program can significantly amplify our efforts to promote a prosperous, inclusive, resilient, and sustainable future for Asia and the Pacific,
“Through this program, we will advance transformative, low-carbon country pathways that position the region at the forefront of global decarbonization efforts,” he added.
Demetrios Papathanasiou, Global Director for the Energy and Extractives Global Department, World Bank, said the World Bank is scaling up support to its client countries to tackle the critical issue of industrial decarbonization to reduce emissions in this hard-to-abate sector that drives economic growth, competitiveness, and job creation.
“The new Climate Investment Funds Industrial Decarbonization Program will provide concessional finance that is vital to help countries meet their development and climate objectives and catalyze private sector investment,” he added.
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