Chapter 5 | PROJECTS CONTRIBUTING TO THE OPEC FUND’S CLIMATE FINANCE
PANAMA
Program for National Climate Change
Situation Analysis of Climate Impacts
The OPEC Fund is providing a US$120 million loan to Panama to support the country’s climate action, adapta- tion and resilience and mitigation policies. The Panama Program for the National Climate Change Policy aims to mitigate, contain and reverse the effects of climate change, helping Panama to achieve its long-term climate change commitments aligned with the Paris Agreement. The OPEC Fund is partnering with CAF - Development Bank of Latin America, which is supporting the program with a US$320 million sovereign loan.
Panama is highly exposed to climate change risks and its sensitivity to these risks is expected to increase. On the 2023 ND-GAIN Index, Panama is ranked 49th. 46 Rising tem- peratures and sea levels and more intense and frequent extreme weather events are likely to increase Panama’s cli- mate change-related risks, underscoring the importance of enhanced resilience. Panama’s environmental vulnerability to climate change is a significant constraint to sustaining inclusive, resilient and green growth. The country faces in- creasing frequency and intensity of natural disasters due to rising temperatures, which pose substantial risks. This is par- ticularly concerning as the country’s major economic assets and sectors – including the Panama Canal, hydroelectricity, tourism and agriculture – are highly dependent on sustain- able water management. Additionally, these sectors require support for a green energy transition. This environmental vulnerability is also intertwined with other major develop- ment challenges facing the country.
Figure 11: Panama ND-GAIN Index
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FUNDING DETAILS:
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• Total program cost: US$440 million • OPEC Fund contribution: US$120 million • Type of financial instrument: policy-based loan • CAF contribution/co-financing: US$320 million • OPEC Fund climate finance as percentage: 58.33 percent adaptation and 41.67 percent mitigation.
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TIMELINE:
Source: Own calculations, Data Source: https://gain.nd.edu/our-work/country-index
• In March, 2022, CAF extended an invitation to the OPEC Fund to participate in the parallel co-financing of the program, which is part of Panama’s National Climate Change Policy. • The OPEC Fund’s loan was disbursed as a single-tranche credit of US$119.7 million in December 2022.
46 University of Notre Dame (2024). Notre Dame Global Adaptation Initiative. URL: https://gain.nd.edu/our-work/country-index
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