The Climate Investment Funds (CIF) announces it will invest up to $1 billion to accelerate decarbonization in high-emitting industrial sectors in developing countries, such as steel, cement, iron, and chemicals.
During the Ministerial Day of the 15th Clean Energy Ministerial (CEM15), CIF, one of the largest multilateral climate funds globally, announced the allocation of up to $1 billion to support its Industry Decarbonization investment program.
CIF also launched a call for expressions of interest, inviting developing nations to join the program. A unique aspect of this program is its focus on private sector engagement, encouraging collaboration between businesses, governments, and multilateral development banks.
CIF states, the Industry Decarbonization program includes a dedicated private sector set-aside: up to 100 percent of total financing can be assigned to projects led by the private sector or that crowd in significant private sector co-investments, with a minimum allocation of 50 percent.
The group, which works with the World Bank and other leading international lenders, is an important cog in development finance as it is able to take on more risk and offer money at cheaper rates, which in turn helps other investors to join in.
These industries are responsible for about a quarter of global greenhouse gas emissions, with demand expected to grow significantly due to the low-carbon economy transition.
According to CIF, the industrial sector currently represents one-quarter of global greenhouse gas emissions, and this number is climbing fast. Developing countries rely on industrial output to grow their economies. For example, global demand for aluminum is expected to rise by 80% by 2050. Cement and steel are also increasingly needed, notably to support the renewable energy transition.
The future depends on decarbonizing heavy emitting sectors. To meet our climate goals, we need industry’s emissions to decline by 20% by 2030 and 93% by 2050
Tariye Gbadegesin, CIF Chief Executive
CIF’s program will invest to help accelerate the development of technologies to cut climate-damaging industrial sector emissions in developing countries. And, for the first time, will accept joint proposals from public and private sector entities.
CIF’s Industry Decarbonization investment program is part of the $8.6 billion Clean Technology Fund. The expressions of interest received will be evaluated by an independent expert panel who will submit recommendations to the Clean Technology Fund’s Trust Fund Committee. Selected countries will be invited to develop investment plans, setting out strategically linked investments unified by a transformative vision.
Funded through CIF’s $8.6 billion Clean Technology Fund, the initiative aims to help reduce industrial emissions by 20% by 2030 and 93% by 2050, supporting global climate goals.
The announcement comes ahead of the Clean Energy Ministerial in Brazil, with countries able to apply for funding by January 17, 2024. With the upcoming COP29 climate talks in Azerbaijan, the program represents a key initiative as finance becomes a central issue, with pressure on wealthier nations to increase climate commitments to $1 trillion or more.
Speeding up the decarbonisation of steel, iron and cement in emerging markets around the world is how we will reduce global emissions and accelerate the clean energy transition
Kerry McCarthy, Britain’s Minister for Climate, Department for Energy Security and Net Zero
Source: CIF, October 03, 2024
