Chapter 4 | CLIMATE FINANCE TARGETS – ROADMAP 2030
mitigation and adaptation. One critical sector for enhanc- ing climate finance will be financial institutions. The pri- ority will be to partner with institutions that have large portfolios of green projects, including renewable energy, energy efficiency and agriculture projects with significant adaptation potential. Additionally, the OPEC Fund will align projects with the Paris Agreement by December 31, 2024, when a tracking approach will be introduced targeting 20 percent Paris Alignment by 2026, 30 percent by 2027 and 50 percent by 2030. This alignment has been identified as a key pro- grammatic priority to establish the OPEC Fund as a signif- icant climate finance institution.
emissions will take longer for developing countries and that each country, depending on its circumstances, has both common and unique responsibilities and capabili- ties. 17 The OPEC Fund’s commitment is part of a broader vision shared by MDBs to align financing flows with the objec- tives of the Paris Agreement as announced in 2017 and reiterated in the 2018 MDBs’ Joint Declaration. This vision has led to the development of the MDB Paris Alignment Methodological Principles, which allow each MDB to cre- ate their own methods. The OPEC Fund’s Paris Alignment methods are conceptually consistent with the MDBs’ prin- ciples. 18 The positioning of the OPEC Fund’s financing is assessed using three Paris Alignment methods, conceptually in line with the MDB PA Methodological Principles and applicable across sectors and country contexts. These methods pro- vide an operational framework to address relevant climate design issues and risk management, following three steps: assessing whether the proposed operation is consistent with a given country’s climate strategies; assessing the operation’s mitigation and adaptation climate risks; and demonstrating that the design incorporates measures to reduce or manage these risks. The methods also empha- size the need to assist countries in improving institutional processes and capacities to manage climate risks and re- vising the scope and design of operations as necessary. The OPEC Fund, like other MDBs, will learn from the ex- perience of implementing Paris Alignment by monitoring its rollout, refining and updating implemented methods as needed, taking stock of initial implementation, facilitating knowledge exchange and lessons learning, strengthening capacity and efficiency and reviewing and sharing experi- ences with other MDBs and institutions.
Paris Alignment means that OPEC Fund’s support will be consistent with the objectives of the Paris Agreement and a country’s pathway to low greenhouse gas emissions and climate-resilient development.
Paris Alignment means that OPEC Fund financial support (loans and guarantees) to countries, public or private sec- tor entities will be consistent with the objectives of the Paris Agreement and a country’s pathway to low GHG emissions and climate-resilient development. A core as- sumption underpinning the OPEC Fund’s commitment is that countries have flexibility in defining their own con- tributions to the Paris Agreement. This is consistent with the fundamental principles of the accord, recognizing that countries have different needs and circumstances in integrating climate and development, that reducing GHG
17 UNFCCC. 2015. “Paris Agreement.” FCCC/CP/2015/10/Add.1. Paris: United Nations Framework Convention on Climate Change. http://unfccc.int/paris_agreement/ items/9485.php. Art. 2. 18 The MDB PA Methodological Principles cover: (i) direct lending, (ii) policy-based lending, (iii) intermediated financing, and (iv) general corporate purpose finance.
30
Powered by FlippingBook