By increasing its commitment to The Interact Climate Change Facility (ICCF) by EUR 15 million, OeEB contributes to financing climate-related investments in developing countries.
While the COVID-19 pandemic continues to propose severe challenges, for emerging countries planning an economic recovery it also offers an unprecedented opportunity to encourage investments to fighting climate change. By closing the climate finance gap in emerging markets, European Development Finance Institutions (DFI) are determined to boost these countries’ resilience, generate jobs and accelerate their inclusive and sustainable economic growth.
"Thanks to this replenishment, European DFIs are strengthening European financial cooperation for climate action. Investing in green energy is essential for human and economic development. With ICCF having now EUR 480 million available funding for additional projects, European DFIs are committed to scale up their transformative role to fight climate change in emerging markets," said Peter Thimme, DEG, Chair of the Board of Directors of ICCF.
ICCF was first launched in 2011 to support renewable energy and energy efficiency projects in developing countries. Last year, the European Investment Bank (EIB), Agence Française de Développement Group (AFD) and ten EDFI members, including OeEB, announced the extension of the ICCF mandate until 2022. Today, three EDFI members are replenishing this facility with a total of EUR 50 million (FMO will commit EUR 20 million, OeEB EUR 15 million and Swedfund EUR 15 million).
"The continued efforts under the ICCF climate change facility play an important role in Team Europe's investment in private sector projects that scale up climate change mitigation and energy access. By pooling financing and expertise with EIB and AFD, European DFIs have increased their capacity to support developing countries' transition to the low carbon economy, which is a top priority," said Søren Peter Andreasen, CEO of EDFI.
Since its inception, ICCF has supported 33 projects across 18 countries for EUR 502 million. Half of the projects financed are supporting wind power solutions (e.g. Lake Turkana in Kenya), a quarter are focused on solar power (e.g. MECER in Honduras) and the rest supporting other renewable energies (geothermal, energy efficiency and hydropower).
"Increasing access to clean, reliable and affordable energy which enables economic development and helps fight climate change is one of our core strategic goals. By teaming up and working together towards the same goal we can not only increase efficiency but also the impact of our investments. We are therefore proud to increase our commitment to the ICCF alongside our EDFI partners and build on its successful track record," says Sabine Gaber, Member of OeEB's Executive Board.
"We are proud to be part of this joint action to fight climate change in emerging markets. The fund has proven to be efficient and well-functioning, and an important vehicle for climate financing. As an important bonus it strengthens the cooperation and knowledge sharing among the European DFIs,’" says Linda Broekhuizen, CEO a.i. of FMO.
"Swedfund's focus on renewable energy in developing countries is more important than ever and also in line with the global 'build back better' approach. This cooperation is not only strategic, but also very hands-on. ICCF has been an important facility for collaboration amongst DFIs since its inception with a relevance that has only increased during the pandemic. This investment will support additional generation of renewable energy and efficient use of resources which are key for a transition to a low carbon economy," concluded Maria Håkansson, CEO of Swedfund.
About the Interact Climate Change Facility (ICCF)
ICCF is a co-financing facility providing financing to climate-related investments in countries included in the OECD DAC list from EUR 10 million to EUR 45 million per project. The funding capacity of ICCF is provided by AFD, EIB and 11 EDFI members. ICCF offers co-financing for its funders for senior loans, mezzanine debt and guarantees with a maximum tenor of 18 years. The facility offers a fast-track process to syndicate large amounts in an efficient two-step process while reducing the risk of the operation by sharing it with other DFIs. The operations of ICCF are regulated by the Master Investment Agreement (MIA) and the secretarial support services are provided by the EDFI Management Company.