What is Climate Finance?
Climate Finance means investing in ways that directly contribute to mitigating climate change, support adaptation to climate change and drive sustainable development. This can include direct investments into renewable energy projects, driving the implementation of green lending programs in local banks, and investing in energy efficiency projects that offer big wins in energy savings while implementing climate-friendly alternatives.
Renewable Energy, especially Commercial and Industrial (C&I) Solar, has become an ideal segment for investment, as the advancement of technology coupled with the (now) lower price, means big wins for small and medium sized enterprises, who have a lot to gain from clean, cheaper energy.
Green Lending is lending that is dependent on environmental criteria for the planned use of the funds. To remain competitive, many banks must transition to green loans, and we support them in this journey with technical assistance and peer learning exchanges.
Energy Efficiency can be seen as the less attractive sibling in the climate-saving family, but efficiency measures such as LED lightbulbs, heating and cooling methods and proper windows can reduce emissions by 80% per year. Now that's pretty attractive.
Energy Access, be it to solar, wind, or hydropower, is a critical area for investment as developing markets are hungry for reliable, clean power due to unreliable grids, remote locations and unsafe alternatives for light, heating and electricity.
Climate Smart Food Systems are a must, as 20-30% of global GHG emissions are from food and agriculture globally. From drip-irrigation to high-tech weather-monitoring and harvesting, now is the time to invest in climate-smart technology.
Why invest in Climate Finance in Emerging Markets?
Global energy demand is expected to increase 47% by 2050, driven by population and economic growth.
GHG emissions reduction
To limiting global warming to around 1.5°C requires global greenhouse gas emissions to be reduced by 43% by 2030.
Developing countries need an annual investment of USD 1.7 trillion in renewable energy to meet energy demand sustainably.