Chapter 5 | PROJECTS CONTRIBUTING TO THE OPEC FUND’S CLIMATE FINANCE
Colombia faces significant disaster risks and is ranked 29 out of 191 countries by the INFORM Risk Index. 38 This is due to the fact that Colombia has one of the highest rates of disasters caused by natural and climate-induced hazards in Latin America, with floods and landslides being the most prevalent and increasingly frequent. 39 Climate risks are wide- spread, with 47 percent of the territory facing “high” or “very high” climate risks. Additionally, 84 percent of Colombia’s population and 86 percent of its assets are exposed to two or more natural hazards. 40 Climate change in Colombia is expected to result in higher temperatures and more frequent extreme weather events, leading to increased flood risks, significant societal and eco- nomic damage and damage of nature. Historical records in- dicate a rising frequency of climate-related disasters over the past decades. Even a 1.5°C increase in average temper- atures could double or triple the population affected by floods in Colombia. 41
Financial instruments such as green taxonomy and sovereign Green Bonds have been developed to channel investments into sustainable projects. Methodological guidelines for costing adaptation measures, evaluating environmental pro- jects and securing funding ensure the effective implemen- tation of climate actions. Together, these measures create a strong institutional and regulatory foundation for Colombia’s climate goals and energy transition.
Expected Outcomes
The loan is expected to strengthen regulatory frameworks and integrate climate policies into national and local plan- ning, fostering an environment that encourages public and private investment in green technologies. The renewable en- ergy transition plans will reduce GHG emissions, decrease reliance on fossil fuels and improve public health through cleaner air. These outcomes are directly tied to Colombia’s Climate Action and Energy Transition Program, enhancing resilience against climate impacts and helping meet the country’s NDC mitigation targets. The loan will also promote sustaina- ble economic growth by supporting circular economy mod- els and climate-smart agriculture, reducing dependency on hydrocarbons. The institutional framework for climate action will be sig- nificantly strengthened, ensuring effective implementation and improved transparency. Ultimately, these outcomes will advance Colombia’s vision of a low-carbon, climate-resilient future, serving as a model for other nations in driving climate action and sustainable development.
Purpose of the Loan
This policy-based loan supports Colombia’s Climate Action and Energy Transition Program, enhancing climate resil- ience and accelerating the shift to a sustainable energy system. Aligned with Colombia’s NDCs under the Paris Agreement, the loan aids reducing GHG emissions by 51 percent by 2030 and strengthens the planning and man- agement capacity for climate action, focusing on both mit- igation and adaptation. Key actions include the approval of the Climate Action Law, which formalizes Colombia’s NDC commitments and the presentation of the long-term climate strategy (E2050 COLOMBIA) to the UNFCCC. Regulatory frameworks have also been strengthened with the publication of the decree for the National Climate Change Information System (SNICC) and the issuance of sector-specific climate plans for agricul- ture, industry and energy.
Assessment according to the Joint MDB Methodology for Tracking Climate Finance
Through this policy-based loan to Colombia the OPEC Fund financed mitigation and adaptation policy actions. The specific
38 European Commission (2024). INFORM Index for Risk Management. Armenia. URL: https://drmkc.jrc.ec.europa.eu/inform-index 39 World Bank Disaster Risk Analysis Colombia: URL https://www.worldbank.org/en/results/2023/03/16/resilience-to-disaster-risk-and-climate-change-in-colombia 40 iBid 41 IPCC Sixth Assessment Report: URL: https://www.ipcc.ch/report/ar6/wg2/chapter/chapter-12/
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