WHITE PAPER – ACCELERATING PRIVATE FINANCE FOR THE ARAB RENEWABLE ENERGY TRANSITION

According to the United Nations Framework Convention on Climate Change (UNFCCC), climate finance refers to local, national or transnational financing – drawn from public, private and alternative sources of financing – that seek to support mitigation and adaptation actions that will address climate change.

To support development countries’ efforts towards effective climate action, it is important for relevant stakeholders to recognize their financial needs as well as to understand how available financial instruments can be mobilized and used towards their climate ambition.

While climate finance includes both mitigation and adaptation, this discussion paper focuses on renewable energy finance in the context of strengthening human security in the Arab region. Renewable energy systems entail numerous benefits for various Sustainable Development Goals (SDGs) and the 2030 Agenda for Sustainable Development. In addition to the more obvious contribution to SDG 7, which focuses on access to affordable, reliable, sustainable and modern energy for all, and to SDG 13 on climate action, renewable energy finance can also make critical contributions to several other SDGs by alleviating poverty, fighting hunger, and increasing access to health services, education and clean water.

This white paper was prepared jointly by the Clean Energy Business Council (CEBC) and the ‘SDG Climate Facility Project: Climate Action for Human Security’

تسريع التمويل المناخي الخاص لعملية الانتقال إلى الطاقة المتجددة في البلدان العربية

وفقاً لاتفاقية الأمم المتحدة الإطارية بشأن التغيّر المناخي (UNFCCC)، يقصد بالتمويل المناخي كل من التمويل المحلي أو الوطني الدولي المستمد من مصادر التمويل العامة والخاصة والبديلة بغاية دعم إجراءات التخفيف والتكيّف الهادفة إلى معالجة تغير المناخ.

لدعم جهود البلدان النامية في المضي بعملها الفعال في مجال المناخ، من المهم لأصحاب المصلحة المعنيين التعرف إلى احتياجاتهم المالية وفهم كيفية حشد الأدوات المالية المتاحة واستخدامها لتحقيق طموحهم المناخي.

يشمل تمويل المناخ كل من عمليات التخفيف والتكيف، إلا ان هذه الورقة تركز على تمويل الطاقة المتجددة في سياق تعزيز الأمن البشري في المنطقة العربية. تتضمن انظمة الطاقة المتجددة فوائد عدة لمختلف اهداف وخطة التنمية المستدامة لعام 2030، إذ فضلا عن مساهماتها الواضحة في الهدف السابع للتنمية المستدامة الذي يركز على وصول الجميع الى طاقة حديثة وموثوقة ومستدامة وبأسعار معقولة، والهدف الثالث عشر المتعلق بالعمل المناخي، ايضا يمكن لتمويل الطاقة المتجددة ان يساهم بشكل حاسم في العديد من أهداف التنمية المستدامة الأخرى، سواء لناحية التخفيف من حدة الفقر ومكافحة الجوع وزيادة فرص الحصول على الخدمات الصحية والتعليم والمياه النظيفة.

أعدت هذه الورقة بتعاون بين مجلس صناعات الطاقة النظيفة و مشروع المرفق المناخي لتحقیــق أهــداف التنمیــة المســتدامة: العمـل المناخــي مــن أجــل الأمن البشري.

Please find below the links to download the English and/or Arabic version of the White Paper “Accelerating Private Finance for the Arab Renewable Energy Transition”:

English: https://www.arabstates.undp.org/content/rbas/en/home/library/CPR/accelerating-private-finance-for-the-arab-renewable-energy-trans.html

Arabic: https://www.arabstates.undp.org/content/rbas/ar/home/library/CPR/accelerating-private-finance-for-the-arab-renewable-energy-trans.html

AN OFFICIAL CALL FOR FINANCIAL ASSISTANCE

The United Nations Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol and the Paris Agreement call for financial assistance from parties with more financial resources to those that are less endowed and more vulnerable. This recognizes that the contribution of countries to climate change and their capacity to prevent it and cope with its consequences vary enormously.

Climate finance refers to:
local, national or transnational financing—drawn from public, private and alternative sources of financing—that seeks to support mitigation and adaptation actions that will address climate change.

HOW THE ARAB REGION FINANCIAL SYSTEM CAN HELP

The Arab region’s financial system is dominated by Gulf Cooperation Council financial institutions and banks in particular. With total assets of  $3 trillion (around 200% of GDP), the region’s banks are somewhat bigger than average for large emerging market economies, although considerably smaller than financial institutions in the US and Japan. State banks are significant providers of financial services for low-income people and microenterprises in a number of countries.

Direct commercial bank involvement in clean energy and other forms of microfinance in the region is limited. Commercial banks prefer to provide wholesale financing through specialized microcredit providers.

State banks run a significant proportion of financial service outlets in several countries, including Syria, Algeria, Tunisia, Egypt and Iraq. In Egypt, the state agricultural bank, The Principal Bank for Development and Agricultural Credit has more than 1200 branches and 23,000 employees throughout the country outside of Cairo, providing deposit services; payments services; foreign currency services and passbooks, machinery and equipment loans and lending for agriculture and other food production enterprises.

In Iraq, around 70% of the total national bank branch network is owned by two large state banks, Rafidain and Rasheed. The scale of state banking networks indicates that they will have an important role to play in financing climate adaptation and a distributed clean energy build-out across the Arab region.

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