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.


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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