SPECIAL FEATURE
Total OPEC Fund climate finance in 2023 was US$515.4 million , accounting for 33.4 percent of the total portfolio
Fund and climate action
The climate (financing) is heating up
• The OPEC Fund’s level of climate financing has notably advanced in recent years. Comparing the baseline period of 2018-2021 to the year 2023, there has been a significant increase from 20 percent to 34 percent . • Adaptation finance increased from 5 percent to 17 percent , and mitigation finance increased from 15 percent to 18 percent. The contribution of the public sector to the OPEC Fund’s climate finance has averaged around 70 percent over the baseline period, primarily driven by energy and multisectoral projects. Climate finance in the private sector accounted for approximately 30 percent , led by the energy sector, with additional contributions from banking and finance as well as multisectoral (financial intermediaries) projects.
Photo: UN women/ JoeSaad
• When the OPEC Fund adopted its Climate Action Plan in 2022 the institution emphasized “the pivotal role that climate finance plays in shaping a resilient and equitable future.” Two years on, delivery is well on track. But given the size of the task this can only be seen as encouragement to redouble all efforts. • Total OPEC Fund climate finance in 2023 was US$515.4 million , accounting for 33.4 percent of the total portfolio, well ahead of the 25 percent target for 2025. Of that total, adaptation finance amounted to US$146.6 million (9.5 percent of total OPEC Fund financing), while mitigation finance amounted to US$368.8 million (23.9 percent).
• When calculating its climate reach the OPEC Fund first
analyzed the period 2018-2021. The overall portfolio included 134 projects with total OPEC Fund funding of US$4.13 billion . Of this portfolio, 57 projects (42 percent of the total number of investments) addressed climate finance: 23 projects (17 percent) were dedicated to adaptation finance, 19 projects (14 percent) to mitigation finance and 15 projects (11 percent) were a mix. Total OPEC Fund climate finance for the period was US$826 million, accounting for 20 percent of the total portfolio.
Photo: Swimsol
• The analysis of OPEC Fund climate finance in 2023 was based on net project approvals for 2022 (year of approval), excluding trade finance projects. The analyzed portfolio included 37 projects with total OPEC Fund financing of US$1.54 billion . Out of these 37 projects, 25 (67.6 percent of the total number of investments) addressed climate finance, 5 projects (13.5 percent) involved climate change adaptation finance, 10 projects (27 percent) involved climate change mitigation finance and 10 projects (27 percent) were a mix of both.
Photo: Henrique ferrera/ Shutterstock
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