With the growing climate uncertainties and mounting financial needs for climate adaptation and mitigation, member countries across the Commonwealth are keen to see businesses take up a greater role in the fight against climate change.
An official side event co-organised by the Commonwealth Secretariat and the Governments of Saint Lucia, Namibia and Zambia at the United Nations Climate Change Conference (COP27) was held in Egypt this week on 10 November to tackle the issue.
Senior government officials, international experts and members of the business community discussed ways to “unlock” private sector finance to bolster climate action in small and other vulnerable countries.
The Commonwealth Secretary-General, the Rt Hon Patricia Scotland KC, outlined the challenge:
“To address the impacts of climate change and meet ambitious targets to reduce carbon emissions to net-zero, we will need an estimated US$4 trillion each year by 2030. This includes unprecedented investment for the deployment of technologies to speed the energy transition.
“Yet climate finance flows in 2021 reach around US$632 billion: just a sixth of what is required. We cannot fill this gap without the private sector.”
In his remarks, the Minister of Education, Sustainable Development, Innovation, Science, Technology and Vocational Training of Saint Lucia, Hon. Shawn Edward, highlighted the devastating climate disasters that small island states recurrently face – and the vast amounts of debt that governments must accrue to finance recovery efforts. He said:
“To deal with the impacts of climate change, small island developing states (SIDS) like Saint Lucia have to go out and search of resources on a continuous basis. Hundreds of millions of dollars in climate finance have been pledged and promised by developed countries. Those monies are not forthcoming. Consequently, we SIDS have to borrow to deal with our climate change issues, creating a situation where we are saddled with debt that is not sustainable.”
The Minister of Green Economy and Environment of Zambia, Hon. Collins Nzovu MP, emphasised that while vulnerable countries are responsible for just 4 percent of global greenhouse gas emissions, they are the most affected by climate change. Many are also charged above-average interest rates on loans, due to their “high risk” classification, leading to further debt-distress. Hon. Nzovu added:
“At the same time, many of these countries are endowed with abundant natural resources, which represent huge investment opportunities. So we are not only interested in concessional funding and soft loans; we are also looking at the private sector. How can international firms come to our countries to work with us in public-private partnerships, where we can work with you to de-risk those investments?”
The event featured presentations by the Director of the Eswatini Meteorological Services at the Ministry of Tourism and Environmental Affairs, Duduzile Nhlengethwa-Masina on the work undertaken by the Commonwealth Climate Finance Access Hub in the Government of Eswatini to develop a private sector engagement strategy for climate action, as well as the Executive Director of the Ocean Risk and Resilience Action Alliance, Karen Sack.
This was followed by a panel discussion that highlighted the role of multinational companies in raising climate finance, the opportunities and challenges for green investments in developing countries, as well as innovative financing solutions, such as debt-for-nature swaps.
Speakers such as Veronica Jakarasi of the Africa Enterprise Challenge Fund underlined the importance of trusting businesses in Africa and investing in them to enable growth. Young entrepreneur and co-ordinator of the Commonwealth Sustainable Energy Transition (CSET) Youth Action Group, Christopher Chukwunta, called for more engagement of young people – who make up 60 percent of the combined population of the Commonwealth – in the mobilisation, allocation and deployment of climate finance.
Other panel members included: CEO of Caribbean Climate Smart Accelerator, Racquel Moses; CEO of the Environmental Investment Fund of Namibia, Benedict Libanda; Manager of the Climate and Environment Finance Division of the African Development Bank, Gareth Philips; Manager of the Coral Reefs & the Blue Economy and the Building Back Blue Programme at UNDP, Vineil Narayan; Head of the Independent Evaluation Unit at the Green Climate Fund, Andreas Reumann; and Head of Oceans and Natural Resources at the Commonwealth Secretariat, Dr Nicholas Hardman-Mountford.
The session ended with a statement by Head of Climate Change at the Commonwealth Secretariat, Unnikrishnan Nair, who shared a five-point agenda on engaging the private sector in the work of the Commonwealth Finance Access Hub (CCFAH). The CCFAH supports small and other vulnerable states to raise funding for climate projects. Working directly with line ministries in member governments, the CCFAH has helped to secure around US$53 million in climate finance for at least 12 countries, and trained more than 2000 government officials in developing robust funding proposals
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