Towards COP27: Arab Regional Forum on Climate Finance - United Nations Economic and Social Commission for Western Asia
15 September 2022
9:30–17:00

Beirut time

Forum

Towards COP27: Arab Regional Forum on Climate Finance

Opening Ceremony
Location
  • United Nations House in Beirut, Lebanon
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ESCWA is hosting the Arab Regional Forum on Climate Initiatives to Finance Climate Action and the Sustainable Development Goals (SDGs), one of five regional forums being organised by the Egyptian Presidency of the 2022 United Nations Climate Change Conference of the Parties (COP 27), the UN Climate Change High-level Champions, and the five United Nations Regional Commissions.

The Arab Regional Forum explores the climate finance needs of Arab States for ensuring water, energy and food security under changing climate conditions. Bankable projects that can accelerate climate action are being showcased by member States, as well as innovative forms of finance and regional initiatives that can create opportunities for private sector investment, blended finance and bilateral support. The Forum:

  • Facilitates engagement with a broad set of partners and stakeholders to accelerate public and private investment mobilization and blended finance opportunities around concrete projects and initiatives;
  • Identifies synergies and entry-points for climate finance to support the acceleration of access to clean energy, energy efficiency technologies as well as means for ensuring water and food security, which remain key catalysts for the attainment of the SDGs as well as mitigation and adaptation goals in the Arab region;
  • Connects institutional investors, private sector financiers and development partners with governments and brokers dialogues around co-creating investment opportunities in support of regional priority actions.

Representatives of the public and private sectors and the international development community are invited to participate. 

You can watch the live stream of the Opening Ceremony on Youtube

Compendium   Compendium of Climate Related initiatives

Outcome document

Summary of key messages: 

  • Climate change is affecting lives and livelihoods across the Arab region and impacts are expected to further aggravate in the future. Urgent action is therefore needed to fight climate change and enhance resilience;
  • Adequate and predictable climate finance is key to the achievement of the Paris Agreement and the SDGs. Negotiations in the upcoming COP should therefore push for mobilizing resources from the public and the private sector to close the enormous climate financing gap;
  • Many countries in the Arab region are facing rising debt burdens, limiting their fiscal space and ability to commit to climate action. More grant-based and concessional climate finance is therefore needed;
  • More financing for climate change adaptation is needed in the Arab region, albeit not at the expense of support for climate mitigation. In particular, support for climate adaptation should consider the cross-cutting nature of adaptation, taking a water-energy-food nexus approach. This could also lead to an employment dividend;
  • Currently there is much more knowledge and experience accumulated for mitigation action compared to adaptation. The design of climate adaptation projects can profit from that, drawing upon experiences and lessons learned from climate mitigation interventions;
  • Climate finance should go beyond traditional financing instruments, considering also innovative and low-cost financing opportunities such as debt swaps;
  • Climate action is a multi-stakeholder process, involving all actors from the public and private sector as well as at the local, national, regional and international level. Enhanced partnerships are therefore needed. In addition, climate financing processes should capture the perspectives from various groups of stakeholders beyond government and financing institutions to include civil society groups, academia, research institutes as well as the vulnerable including youth towards achieving “leave no one behind” goal;
  • Governments have a leading role in coordinating financing for climate action. To crowd in private finance and actively engage the private sector, which is key to reaching the climate goals and SDGs, an enabling investment environment and a sound legal and regulatory framework are needed;
  • There is momentum for private sector engagement: Private banks are working towards decarbonizing their lending portfolio to reach their own climate objectives;
  • Climate action and financing should be a country-driven process, responding to the country’s needs and being adapted to the local context. This includes the involvement of local banks in the climate finance architecture;
  • Capacity building can support the development of investable projects and the mobilization and access to finance;
  • Energy Efficiency investments are particularly interesting for the private sector with high bankability and immediate payback. Similarly, e-Mobility, particularly in the context of a broader sustainable public transport concept, as well as gas flaring projects are easily bankable;
  • In addition to bankability considerations, climate mitigation and adaptation projects, need to consider environmental and national development dimensions;
  • Main criteria considered when assessing project eligibility for financing include well designed feasibility studies covering technical, economic, financial and climate change aspects, as well as endorsement by governments as national priority intervention area, among others.

During the High-Level discussion, panelists conversed the increasing inflationary and debt pressures faced by developing countries. Arab countries are amongst the lowest contributors to climate change, yet their financing needs are substantial. Climate finance in the region is mainly available through loans which further limits the fiscal space and drives up developing countries’ government debt burdens, hence there is a need to increase the share of grants for climate finance. It was also mentioned that there is a crucial need for capacity building for the localization of financing through setting up legal and regulatory frameworks, conducting feasibly studies and implementing certification for green businesses. It was also stated that accessing climate finance represents a unique opportunity to reach economic stability and to ensure that no one is left behind.

During the first roundtable discussion, countries presented their adaptation projects for climate financing. Egypt is aspiring to serve as a green hub for the Arab region and has established the NWFE نُوَفِّي platform for Investable Projects supporting efforts towards COP27. Lebanon national priority areas focused on Forest protection from fire and resource degradation. Projects by Algeria emphasized natural ecosystem preservation and restoration. Iraq priorities revolve around improving irrigation efficiency for improved resilience in the agricultural sector. Jordan’s priority projects focused on efficient food production through hydroponics and energy efficient water conveyance and treatment systems. Oman’s priority projects seek to enhance flood protection through dam construction. Tunisia’s projects considered the interlinkages between the water, food and energy sectors.

 

Commentators from the Islamic Development Bank, The World Bank, HSBC and the NDC Partnership shared their insights regarding the projects presented and reiterated the need to align proposals with country’s National Determined Contributions (NDCs), national development plans, and the Paris Agreement. While the climate value in presented projects is obvious, further emphasis needs to highlight the development value and environmental impacts of the projects.  

During this second Roundtable discussion, mitigation projects were presented with Egypt focusing on energy efficient cooling in buildings and bus rapid transit. Algeria’s priority was flared gas recovery while Jordan focused on blue economy for livelihoods through renewable energy and energy efficiency and Tunisia on smart transport. Experts from the European Bank for Reconstruction and Development (EBRD), Standard Chartered Bank, Islamic Development Bank and Deutsche Bank provided their comments and highlighted the importance of transitioning towards green cities with a focus on eMobility. It was also suggested to adjust the financing structure and regulation of these projects to make them more bankable.

During the first part of the session, national initiatives on climate adaptation from Egypt, Oman, and Tunisia were presented. The points highlighted during the discussions included the need to include vulnerable groups in adaptation initiatives to create greener job opportunities for youth and the need to ensure that adaptation initiatives have a positive impact on livelihoods. The second part of the session consisted of a national consultation on the “Climate-Proof Watershed Management Design and Resilience Package” developed for El Kalb and Al Kabir watersheds in Lebanon through a collaboration between FAO and ESCWA on “Increasing Watershed Resilience to Climate Change in Lebanon” under the NENA-WEPS FAO SIDA funded project. Proposed interventions under these packages were presented and the important role of these adaptation measures to increase resilience of the watersheds to climate change and the need for collaboration and coordination across sectors when implementing such interventions to ensure synergy were also discussed.

The fourth Roundtable featured four regional climate Initiatives that are being advanced by Arab States and regional partnerships. The Climate/SDGs Debt Swap-Donor Nexus Initiative supports access to finance for countries facing high debt burdens. The Regional Initiative to Promote Small-Scale Renewable Energy Applications in Rural Areas of the Arab Region (REGEND) showcased opportunities for scaling up successfully deployed small scale energy solutions targeting women in the region. The Mashreq Waters Knowledge Initiative demonstrated opportunities for fostering dialogue on common water and climate challenges based on a shared knowledge base, which is being strengthened by the World Bank and ESCWA.  The UNFCCC and LAS provided insights on the Arab States Climate Finance Access and Mobilization Strategy (2022-2030) that will strengthen regional and national capacity for mobilizing climate finance on priority issues subsequent to its approval by the Arab Council of Arab Minsters Responsible for the Environment (CAMRE).  Commentators provided insights on how the Arab Fund for Economic and Social Development along with Arab multilateral development banks are actively engaged in supporting climate finance projects in the region.  The experience of the United Nations Capital Development Fund for financing climate projects at the local level was also shared and demonstrated that the UN System is also engaged in delivering on climate finance to advance climate action.

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