Major NDF commitment supporting NDCs in Latin America and the Caribbean
NDF will provide EUR 10 million in financing for climate- and sustainability planning to support Latin America and the Caribbean countries in achieving Paris climate targets.
Approved earlier this week by the NDF Board, NDF financing will anchor the NDC Pipeline Accelerator Trust Fund, a new facility established by the Inter-American Development Bank (IDB).
The Accelerator will support IDB regional member countries in translating nationally determined contributions (NDCs) deriving from the 2015 Paris Climate Agreement into bankable and sustainable projects. It is one of the pillars of the IDB's new NDC Invest platform and part of an integrated strategy to support countries in the next phase of delivering on the Paris commitments.
“NDCs represent a progressive global blueprint for limiting global warming and building climate resilience,” commented NDF Managing Director Pasi Hellman, adding, “implementing this blueprint means transforming NDCs from targets on paper into a robust pipeline of projects as quickly as possible.”
“Many countries in Latin American and the Caribbean are now seeking technical and financial support for implementation of their NDCs,” Juan Pablo Bonilla, Manager of the IDB Climate Change and Sustainable Development sector confirmed. “Through NDC Invest and collaboration with NDF, we aim to provide a comprehensive package to better respond to our country’s needs.”
Climate and sustainability considerations come on board late in the project planning cycle under business-as-usual conditions. This despite evidence that the costs of incorporating climate smart design and preparation early are small compared to the costs of cancelling, delaying or refitting poorly developed assets later. The Fund will assume the up-front costs of climate smart planning, thereby enabling major benefits aligned with NDCs and other country level climate priorities to take shape downstream.
“Enhanced support mechanisms are an important foundation for efforts to increase the sustainability of investments,” said Bernardo Guillamon, Manager of the IDB’s Office of Outreach and Partnerships. “NDF’s partnership in this space is essential to facilitating the identification and planning of bankable projects, and will help to mobilize financial resources from global markets for advancing NDCs.”
The Fund is structured as a multi donor trust fund providing both grants and reimbursable grants to accelerate projects in the IDB pipeline. NDF will provide the first tranche of financing and send a positive resource mobilization message to other donors.