southern african development community (sadc) climate

Southern African Development Community (SADC)

Climate Finance Flows

Leonie Routil, UNFCCC secretariat, [email protected]

Content

SADC Climate Finance Flows

I. Regional Perspective

II. Data availability

III. International Public Climate Finance

a) Total Climate Finance (principle and significant)

b) Funding Channels, Main Contributors

c) Financial Instruments

d) Themes (Mitigation, Adaptation, Cross-Cutting)

e) Sectors

IV. Clean Energy Investment

a) Technologies

b) Lenders

Regional perspective

Source: SADC.int

Member States

Angola,

Botswana,

Comoros,

Dem. Rep. of the Congo,

Eswatini,

Lesotho,

Madagascar,

Malawi,

Mauritius,

Mozambique,

Namibia,

Seychelles,

South Africa,

Tanzania,

Zambia,

and Zimbabwe

Regional Narrative

• Sustained economic growth over the past decade

• Access to clean water ~ 40%; Access to energy ~ 50%

• Fossil fuel share of electricity sources ~ 90%

• Expected population growth to over 500 million in 2050 (compared to 337 million in 2017)

• Climate vulnerability: particularly variability of rainfalls leading to droughts or flooding

Regional barriers

• Poverty and Inequality

• Unemployment

• Infrastructure backlogs

• Human capacity and skills

• Institutional capacity

Climate bonds initiativeIndividual country reporting

BNEF dataOECD data

Data availability for existing climate finance flows

International public climate finance

Bilateral

agenciesMDBs Climate funds

International private climate finance

Renewable

energy projects

Domestically sourced public and private climate finance

Green loans/

bonds

Government

expenditureFunds

OECD: Climate-related development finance, reported by OECD DAC members

BNEF: Bloomberg New Energy Finance

Other sectors


BNEF dataOECD data

Section I - International public climate finance


Bilateral



Renewable

energy projects


Green loans/

bonds

Government

expenditureFunds



Other sectors

Total Climate Finance Inflows 2010 - 2017

• The average finance inflow to the SADC region with climate as a principal

objective was 804 million USD/year between 2013 and 2017

• Including development projects with climate as a co-benefit, the average

was 2 billion USD/year

• Total CF inflow to the region, 2013-27: 13.4 billion USD

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2010 2011 2012 2013 2014 2015 2016 2017

Mio

USD

Total Climate Finance (Principal and climate co-benefits)

Principal Climate Finance

• The three main recipients of public CF in the

region are Tanzania, South Africa, and

Mozambique

Source: OECD

2,706

2,651

1,503

1,414

1,310

1,304

859

384

359

276

178

158

94

80

74

49

0 1,000 2,000 3,000

Tanzania

South Africa

Mozambique

Malawi

Zambia

Dem. Rep. of the Congo

Madagascar

Angola

Namibia

Zimbabwe

Mauritius

Botswana

Lesotho

Comoros

Swaziland

Seychelles

USD Mio

Total Climate Finance Inflows 2013-2017

Incomplete data

from MDBs

Climate Finance Inflows by Country – 2010-2017

0

50

100

150

200

250

2013 2014 2015 2016 2017

Botswana

Zimbabwe

Angola

Mauritius

Namibia

0

100

200

300

400

500

600

700

800

900

1,000

2013 2014 2015 2016 2017

Madagascar

Dem. Rep. Congo

Zambia

Malawi

Mozambique

South Africa

Tanzania

• Yearly fluctuations are high and heterogenous across countries

• Slightly increasing trend of principal CF inflow in most countries

0

10

20

30

40

2013 2014 2015 2016 2017

Seychelles

Comoros

Eswatini

Lesotho

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

2013 2014 2015 2016 2017

Total CF, Percentage of GDP

Malawi Mozambique Madagascar Comoros

Tanzania Zambia Lesotho Dem. Rep. Congo

South Africa Namibia Eswatini Mauritius

Zimbabwe Botswana Seychelles Angola

• Trend less clear when looking at CF as percentage of GDP

• The countries receiving the most CF relative to their GDP are Malawi

(avg. 4.8% of GDP), Mozambique (2.12%), Madagascar (1.61%)

Source: OECD

Funding Channels, Main Contributors – SADC Region

Source: OECD

58%

33%

9%

Bilateral MDBs Climate Funds

0 500 1,000 1,500 2,000 2,500

Other bilateral

Italy

Australia

Denmark

Finland

Switzerland

Netherlands

Ireland

Norway

Belgium

United Kingdom

Sweden

Japan

United States

France

EU institutions (excl. EIB)

Germany

Mio USD

Bilateral CF Providers

0 100 200 300 400

GGGI

Adaptation Fund

NDF

GCF

CIF

GEF

IFAD

Mio USD

Climate Funds

0 500 1,000 1,500 2,000 2,500

IFC

EIB

AfDB

WB

MDBs

Funding Channels by Country

• Strong variance of main provider types between countries

• Countries receiving less overall CF rely more heavily on one provider-type

•T

ota

l CF

, Thousand U

SD

Source: OECD

Financial Instruments - SADC Region

Source: OECD

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

2013 2014 2015 2016 2017

SADC Region: Yearly Climate Finance Inflows by Financial Instruments

49%48%

1% 2%

SADC Region

• Compared to the global average, SADC’s climate finance has a higher percentage of grants,

lower percentage of debt instruments;

• Equal share of debt and grants;

• No clear time trend in finance instruments;

29%

67%

2% 2%

Global climate-related development finance by Financial Instruments

Grants

Debt Instruments

Equity and Shares inCollective InvestmentVehicles

Unallocated /Unspecified

Financial Instruments by Provider Type and Theme – SADC Region

• In bilateral flows grants are the main

instrument used, with mitigation project

receiving equally as much concessional

debt

• MDBs use mainly debt instruments

• Climate Funds mainly give grants

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Ad

apta

tio

n

Mit

igat

ion

Cro

sscu

ttin

g

Ad

apta

tio

n

Mit

igat

ion

Cro

sscu

ttin

g

Ad

apta

tio

n

Mit

igat

ion

Cro

sscu

ttin

g

Bilateral MDBs Climate Funds

Unallocated / Unspecified

Equity

Non-concessional debt

Concessional debt

Grants

Source: OECD

Themes of Funded Projects

Source: OECD

14%

47%

39%

SADC Region Climate Finance Inflows by Themes,Percent of Total 2013 - 2017

Cross-cutting

Mitigation

Adaptation

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017

USD

Mill

ion

Total Yearly Climate Finance Inflows to the SADC region by themes (mitigation, adaptation, cross-

cutting projects)

• Relatively well balanced distribution of finance between Adaptation and Mitigation projects

• Share of Adaptation finance increasing

Sectors 1/2: Inflow to Main Receiving Sectors by Theme

Source: OECD

78

154

262

237

140

309

311

140

423

1,042

1,667

3,360

69

23

164

103

211

144

89

955

1,357

423

1,601

4,163

Education

Disaster risk reduction

Multisector aid

General government

Industry

Health

Social services

Transport and storage

General environment

Water and Sanitation

AFOLU

Energy

Adaptation Mitigation

• Main sectors receiving adaptation finance: AFOLU, Water and Sanitation, General Environment, Transport & Storage

• Main sectors receiving mitigation finance: Energy, AFLOU, General Environment, Transport and Storage

Country differences in main receiving sectors

Source: OECD

0

500

1,000

1,500

2,000

2,500

3,000

0%10%20%30%40%50%60%70%80%90%

100%

Energy AFOLU Transport and storage Water and Sanitation General environment

Not specified Social services Health Multisector aid Industry

General government Disaster risk reduction Food Aid Education Multisector

Emergency response ICT Finance

• Significant differences between countries.

• Energy, AFOLU and Water & Sanitation relevant CF sectors for most countries.

Project Activity Type

• 60% of the activities receiving climate finance are focused on projects on infrastructure or production

• 20% is focused on capacity building

• 11% is on delivering services such as in health, education and social sectors

Source: OECD

Mitigation Sectors - Project Activity Types

• In energy sector, 10% of flows went to capacity building activities.

• Grid networks received the most of infrastructure finance (35%).

• In agriculture, forestry, and land use (including fishing), 28% of

mitigation finance went to capacity building and research.

• Project implementation finance goes primarily to agriculture and

land use projects.

• Research expenditures are almost exclusively going towards

agriculture.

Source: OECD

Adaptation Sectors – Project Type

• In the water and sanitation sector, 26% of adaptation

finance are going to capacity building.

• In agriculture, forestry, and land use, 24% of

adaptation finance went to capacity building and

research.

• 66% went to project implementation, mainly rural

and agricultural development.

Source: OECD


BNEF dataOECD data



Bilateral



Renewable

energy projects


Green loans/

bonds

Government

expenditureFunds



Other sectors

Renewable Energy Investment in SADC Region by Technology 2010 - 2017

Source: Bloomberg NEF

0

1000

2000

3000

4000

5000

6000

7000

2010 2011 2012 2013 2014 2015 2016 2017 2018

USD

Mill

ion

1

10

100

1,000

10,000

100,000

1,000,000

10,000,000

100,000,000

Tho

usa

nd

USD

Solar

Wind

Hydro Small

Biomass & Waste

Biofuels

Energy Smart Technologies

Low Carbon Services & Support

Data not available on Comoros, Eswatini, Mauritius, Seychelles

• High Fluctuation in RE investments, might be

explained by RE IPP tenders;

• Total RE Investment 2010-2018: 24 bn

• Average: 2.7bn

• Obvious heterogeneity among countries

Energy Capacity Installed

0

2000

4000

6000

8000

10000

12000

14000

2010 2011 2012 2013 2014 2015 2016 2017

New Capacity installed since 2010 (cumulative)

PV Commercial

Biomass & Waste

Hydro Small

PV Utility

Wind Onshore

Hydro Large

Nuclear

Gas

Oil

Coal

Source: Bloomberg NEF

Lenders to the Region, according to BNEF research

MultilateralClimate Investment FundsWB GroupEuropean Investment Bank

Bilateral - PublicExport-Import Bank of IndiaExport-Import Bank of ChinaAgence Francaise de Developpement EPICRepublic of South Africa Economic Development DepartmentRepublic of NamibiaDevelopment Bank of Southern Africa Ltd

Bilateral - PrivateStandard Bank Group LtdAbsa Group LtdNedbank Group LtdFirstRand LtdCapricorn Investment Group Ltd Consolidated Infrastructure

Group LtdInvestec PLCInvestec LtdHSBC Holdings PLCOverseas Private Investment Corp

• Fossil fuels still dominant.

• Share of RE increasing.

Summary

• Avg. CF to SADC region 2bn/year

• Slightly increasing trend • Mainly provided bilaterally

• Correlation between total CF and balanced

share of bilateral/multilateral sources

• Equal share of grants and debt instruments

• Bilateral and Climate Funds providing

grants, MDBs using debt instruments

• Balanced adaptation / mitigation finance

• Share of adaptation increasing

• Commonly important sectors in the region:

Energy, AFOLU, Water & Sanitation

• Finance for technical assistance

makes up between 10% and

28%, depending on sector

Southern African Development Community (SADC)

Climate Finance Flows

Thank you for you attention!

Leonie Routil, UNFCCC secretariat, [email protected]


BNEF dataOECD data



Bilateral



Renewable

energy projects


Green loans/

bonds

Government

expenditureFunds



Other sectors

Emerging Markets Green Bonds

Source: Climae Bonds Initiative

• First Emerging Market Bonds were issued 2012 in South Africa by the Industrial Development Corporation

• The Republic of Seychelles issued the first sovereign blue bond (USD15m) in 2018

• Nedbank among the top 5 commercial issuers of EM Green bonds

DBSA Green Finance

DBSA is currently working with the government of South Africa to develop policy and capacity incentives for mainstreaming biodiversity and ecosystems values into national, regional and local development policy and finance.

DBSA Green Finance Commitments in 2017 USD Mio

Green Energy and Mitigation of GHGs 136

Adaptation 33

Other 14

Total Green Commitments 183

Source: IDFC

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