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• Drive innovative climate finance solutions for the private sector by financing low-carbon and climate resilient projects and facilitating on- lending, promoting the preparation of climate risk assessments and exploring investing in climate bonds issued by the private sector. To maximize the impact of its climate financing the OPEC Fund will continue to work in partnership with other partner institutions and prioritize projects that seek to crowd-in the private sector. The OPEC Fund also commits to joining international climate finance initiatives such as, for instance, the MDB Climate Finance Working Group and from 2023 onwards to measure climate finance, greenhouse gas emissions and emission reductions based on agreed methodologies and best practices. A review of the OPEC Fund’s portfolio over the period 2018-2021 (excluding trade finance) shows that climate finance accounted for 20 percent of approved projects. Climate adaptation (investments to reduce the risk of vulnerabilities posed by climate change and to increase resilience) accounted for 27 percent of approved projects and climate mitigation (investments to reduce, limit or sequester greenhouse gas emissions to reduce climate change) accounted for 73 percent. Climate financing in the public sector was higher (66 percent) than in the private sector (34 percent). The majority of projects was in the energy sector (37 percent), followed by water (25 percent) and agriculture (23 percent). “Our new strategy is ambitious in its target numbers, but also in its holistic approach,” said OPEC Fund Director-
The 2009 promise by rich nations to provide poor countries with at least US$100 billon annually by 2020 to cut greenhouse gas emissions and cope with the impacts of climate change is yet to be honored. Addressing the gap This is why the OPEC Fund’s Climate Action Plan comes at a crucial time. By doubling its climate financing rate and putting environmental and social principles at the core of its project cycles, the OPEC Fund will leverage its impact and reach. With total signed commitments of more than US$22 billion since inception, the OPEC Fund boasts a worldwide outreach with more than 125 partner countries especially in Africa, Asia and Latin America and the Caribbean. That amount has acted as a critical component worldwide with a total project value of close to US$190 billion.
Starting next year, the OPEC Fund will subject all new projects to climate screening to identify climate action potential and systematically include low-carbon and climate resilience options in the project approval documentation. The OPEC Fund’s Climate Action Plan will focus on three key areas to promote new climate contributions: • Support climate diagnostics, planning and policies by offering assistance to partner countries through grant- funded technical assistance for the formulation of climate risk profiles, priority measures and implementation in partnership with other MDBs and development finance institutions. • Promote transformative climate investment through public and private investments in energy, transport, agriculture, food, water and smart cities. The OPEC Fund’s climate contributions have historically been concentrated in the energy, water and agriculture sectors.
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Giving a greater focus to our warming world creates an ever- expanding ripple effect.
Our new strategy... will allow us to demonstrate that tackling climate change and its consequences is development work. That they are not only compatible, but complement each other.
General Alkhalifa. “It will allow us to demonstrate that tackling climate change and its consequences is development work. That they are not only compatible, but complement each other.”
Dr. Abdulhamid Alkhalifa, OPEC Fund Director-General
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