IDBZ to set up climate finance facility

Source: IDBZ to set up climate finance facility | The Sunday News

IDBZ to set up climate finance facility

Judith Phiri, Business Reporter
THE Infrastructure Development Bank of Zimbabwe (IDBZ) has described its accreditation by the multi-billion-dollar Green Climate Fund (GCF) as a milestone which complements its efforts towards establishing a Climate Finance Facility (CFF).

The GCF is a global fund created to support efforts by developing countries to respond to the challenge of climate change.

IDBZ became part of the 113 financial institutions accredited by the fund as of 1 July this year. The fund has so far committed US$8,3 billion to 173 projects in Africa, Asia, Latin America and the Middle East and is set to help nearly 500 million people become more resilient to more extreme weather and rising seas, while cutting carbon emissions.

In a document titled, “The long journey to IDBZ’s accreditation to the Green Climate Fund: What it means for the IDBZ and Bank staff,” prepared by IDBZ Climate Finance and Sustainability Division Resource Mobilisation and Climate Change Department, the Bank said the accreditation complements its efforts to establishing a Climate finance facility, which will be a ring-fenced facility dedicated to the financing of green and sustainable infrastructure projects in Zimbabwe.

“The CFF will provide a platform to crowd-in various climate finance sources and, more essentially, catalyse private sector investment into green projects, thereby promoting impact and sustainable investing. Accreditation to the GCF is a key milestone in the Bank’s cherished vision of becoming the first Green Bank in Zimbabwe and makes the Bank a key player in the country’s efforts to fight climate change,” reads part of the document.

Accreditation is renewable every five years. Therefore, the IDBZ will have the option, subject to building the necessary capacities and track record, to apply for medium (between US$50-250 million) to large scale (plus US$250 million) funding categories when it applies for re-accreditation after five years.

IDBZ will further be responsible for presenting funding applications to the GCF, and then overseeing, supervising, managing and monitoring the overall GCF-approved projects and programmes.

“The projects that are developed should support the national development agenda in line with the National Development Strategy 1, Agenda 2030, National Climate Policy, Nationally Determined Contributions, Low Emissions Development Strategy and National Adaptation Plan as well as meet the needs of the recipients or project beneficiaries,” said IDBZ.

The bank noted that accreditation to the GCF brings opportunities for them to scale up their involvement in national climate change mitigation and adaptation initiatives. It also said that the GCF is a new source of project financing which will help to address some of the existing challenges in the Zimbabwean market such as short tenure, high interest rates and limited project preparation funding.

“This calls for everyone within the Bank to play their part and ensure that the Bank executes GCF funded projects diligently and expeditiously. While we celebrate the landmark achievement, let us not sit back on our laurels.

“Let us bear in mind that accreditation is not the end, but the beginning of more demanding work which will require concerted efforts by everyone in their respective roles to create greater success,” read part of the document.

Zimbabwe is among many countries in the world that made commitments under the Paris Agreement of 2015 to combat the impacts of climate change through transition to low-carbon and climate resilient development pathways.

The IDBZ is at the centre of national efforts to accelerate infrastructure development for sustainable and inclusive socio-economic transformation in Zimbabwe.

In this context, the Bank was nominated by the Government of Zimbabwe as the National Implementing Entity (NIE) to the Green Climate Fund (GCF) in November 2016.

The nomination was in recognition of the need to pivot the Bank’s capabilities to mobilise resources for climate resilient infrastructure investments across different sectors.

The IDBZ was better placed to play a leading role in coordinating infrastructure related adaptation and mitigation projects, thereby assisting the country to meet its obligations under the Paris Agreement.