The Federal Ministry for Economic Affairs and Climate Action is providing an additional amount of €126 million for decarbonisation in emerging and developing countries via the International Climate Initiative (ICI). The intention is to help the countries phase out fossil energy and reduce their dependence on energy imports at a time when world market prices are rising. At the same time, the funding will make an important contribution towards attaining the 1.5C target of the Paris climate agreement and also underscores the Federal Government’s aspiration to use its current G7 presidency to progress global decarbonisation. To this end, 14 selected ongoing ICI projects and initiatives are receiving additional funding so that they can be effective as quickly as possible.
Federal Minister for Economic Affairs and Climate Action Robert Habeck said: “The high world market prices for fossil fuel due to Russia’s war of aggression are affecting not only Germany and Europe, but also emerging and developing countries, where people have much lower incomes. It is therefore more important than ever to press ahead even harder with the global energy transition. Germany has committed to do this in the context of the Paris climate agreement. A crucial role is played by increased investment in wind and solar power, technologies which have become much cheaper. To get this moving, we are now boosting the funding we are providing to the International Climate Initiative.”
The Economic Affairs and Climate Ministry wants the extra money to help the partner countries in the International Climate Initiative to take the right decisions for a successful energy transition. The ICI’s investment package is based on two pillars of global climate action: firstly, an accelerated global energy transition leading to a supply based on renewable energy and more energy conservation, and secondly more and quicker investment in sustainable and climate-friendly infrastructure. Both of these will bolster the work already being done to cut carbon emissions in key emerging market countries and the efforts being made there to decarbonise by the middle of the century.
Global energy transition for carbon emission reductions and security of supply
Additional funding of €51 million for the fields of renewable energy, energy efficiency, cooling and green hydrogen will go towards measures which contribute to this. The increased funding for the energy sector will be distributed across key developing and, particularly, emerging market countries in Asia, in the MENA region, and in Africa and Latin America.
Leveraging of funding in sustainable infrastructure
The second part of the increased funding will help to leverage private and public-sector funding and investments in renewable energy systems and the sectors of transport, industry and buildings. In recent years, the ICI has greatly expanded its portfolio in the financial sector, with new projects and funds. The additional amount of €75 million will serve to leverage more large-scale investment.
For further information on the investment package, please click here.
The International Climate Initiative (ICI)
The International Climate Initiative (ICI) is part of the Federal Government’s international commitments to fund climate action. Since 2022, the ICI has formed part of the portfolio of the Federal Ministry for Economic Affairs and Climate Action. The funding programme works closely together with the Federal Environment Ministry and the Federal Foreign Office, both of which conduct their own ICI projects. The three ministries use the ICI to jointly fund innovative solutions to mitigate climate change and to maintain ecodiversity in developing and emerging market countries, particularly in order to implement and ambitiously develop the Nationally Determined Contributions anchored in the Paris agreement.
Background to the projects:
a) Extra funding for the field of energy
Subject area 1 - renewable energy:
- MENA link: Ambitious expansion of renewable energy and efficient sector coupling in the MENA region; in EGY, JOR, MAR, TUR, TUN (still in preparation, not linked to landing page); implementing agency Guidehouse; funding: €19.75 million; additional funding of €10 million
- Thai-German cooperation on energy, transport and climate action; implemented in THA (still in preparation, not linked to landing page); implementing agency GIZ; funding: €20 million, additional funding of €6 million
- Clean, Affordable and Secure Energy for Southeast Asia (CASE): in IDN, PHL, THA and VNM; implementing agency GIZ; funding: €19.95 million; additional funding of €10 million
- 100% renewables: cities and regions: in ARG, IDN, KEN; implementing agency ICLEI; funding: €3.98 million; additional funding of €3 million
- Strategic Exploration of Economic Mitigation Potentials through Renewables (ExploRE): implemented in IDN; implementing agency GIZ; funding: €3.85 million; additional funding of €1.5 million
Subject area 2 - energy efficiency:
- Programme for Energy Efficiency in Buildings (PEEB): in MEX, MAR,
SEN, TUN and VNM; implementing agencies GIZ and Agence Française de Développement (AFD); funding: €5.5 million; additional funding of €5 million
- Energy-efficient cooling in India: implemented in IND; implementing agency GIZ; funding €3 million; additional funding of €2 million
· Cooling programme for Southern Africa: in BOT, NAM, ZAF, Eswatini; implementing agency GIZ; funding €1 million; additional funding of €6 million
Subject area 3 - market ramp-up of green hydrogen:
- Long-term decarbonisation pathways based on power-to-X:
in ARG, MAR, ZAF; implementing agency GIZ; funding
€20 million; additional funding of €5 million
- PtX dialogue: implemented in KEN; implementing agency GIZ;
funding: €7.5 million; additional funding of €2.5 million
b.) Increased funding for funds focused on leveraging of investment
1. Emerging Markets Climate Action Fund (EMCAF): implemented by KfW Entwicklungsbank and European Investment Bank (EIB), structured waterfall fund to leverage private investment, particularly in renewable energy; funding: €25 million (ICI funding), plus €15 million from Nordic Development Fund, €15 million from the Government of Luxembourg; additional funding of €30 million
2. Global Climate Partnership Fund (GCPF): implemented by KfW Development Bank, structured waterfall fund to leverage private-sector investment in energy efficiency measures and renewable energy in emerging and developing countries. Also, the activities aim at the long-term improvement of possibilities for investment in the partner countries; funding: €66.5 million; additional funding of €15 million
3. 30 by 30 Zero Scale Up Climate Finance: implemented in ZAF, PHI, MEX and EGY; implementing agency International Finance Cooperation (IFC) of the World Bank Group; project aims to raise the green/climate share in the total climate portfolio of loans from private banks in the partner countries by 30% by 2030; funding: €20 million; additional funding of €15 million
Partnership for Market Implementation Facility: central platform to support national reduction efforts via the use of market-based instruments; implementing agency World Bank Group; funding: €20 million; additional funding of €15 million