BAKU, Azerbaijan, November 26. COP29 has
supplied a possibility for MDBs, together with the Asian
Infrastructure Funding Financial institution (AIIB), to have interaction with a variety
of stakeholders concerning the work we’re doing within the local weather
house, stated Seleha Lockwood, Senior Local weather Technique and Coverage
Specialist at AIIB in an unique interview with Development.
“This COP, in addition to earlier COPs, gives a possibility for
MDBs, together with the AIIB, to have interaction with a variety of
stakeholders concerning the work we’re doing within the local weather house.
It is usually a possibility for exchanging information and for
collaboration,” she stated.
Lockwood highlighted the discharge of a joint MDB assertion at
COP29, which outlined their accomplishments over the previous 12 months and
outlined plans for the long run. “This serves as a way of sharing
info and demonstrating our openness to collaboration”.
In 2023, MDBs achieved a milestone in local weather finance,
collectively mobilizing $125 billion. At COP29, they pledged to
increase their annual local weather finance contributions to $170 billion by
2030, together with $120 billion for low- and middle-income nations
and $50 billion for high-income nations.
“For MDBs, strengthening collaboration efforts on the nation
stage is necessary as we assist nations in formulating and
operationalizing long-term local weather methods,” Lockwood famous,
emphasizing the worth of focused help in reaching sustainable
improvement targets.
Lockwood additionally pointed to the significance of showcasing innovation
and advancing new frameworks. “For this COP, MDBs introduced a paper
outlining our imaginative and prescient for supporting country-led platforms,” she
stated. “We additionally labored all year long with different MDBs on a
second paper, which introduces a typical method to outcomes. This
goals to transcend merely reporting local weather finance – a follow we
will proceed – to concentrate on outcomes and influence”.
AIIB’s core priorities in Central
Asia
“The AIIB is targeted on our mandate of ‘infrastructure for
tomorrow,’ which incorporates inexperienced infrastructure as considered one of its key
priorities. Different main elements of our work are regional
connectivity and personal capital mobilization,” stated Lockwood.
“Whereas now we have members within the Asia-Pacific and Central Asia
areas, we even have a world membership, consisting of 110
nations”.
She emphasised AIIB’s position in supporting regional and nationwide
efforts on local weather, notably in Central Asia. “Within the context
of the Asia-Pacific and Central Asia, as with different areas, we
wish to help nation efforts on local weather and regional
initiatives at COPs,” Lockwood acknowledged.
At COP29, the AIIB demonstrated its help for the regional
Particular Programme for the Economies of Central Asia (SPECA), an
initiative aligned with its mandate. “As a part of this initiative,
and consistent with our mandate, we prioritize help for each the
private and non-private sectors”.
The AIIB additionally led a number of discussions on key local weather matters,
together with adaptation, the health-climate-nature nexus,
biodiversity, and carbon markets. “At these occasions, AIIB showcased
motion on local weather and plans forward,” stated Lockwood. She highlighted
the financial institution’s achievement in local weather finance, which reached 60 %
of its annual investments in 2023, surpassing its 50 %
goal. “Though now we have exceeded our goal, we stay dedicated
to scaling our financing for adaptation and mitigation to help
nation plans”.
Increasing its scope past venture financing, AIIB launched a
new local weather policy-based financing device at COP29. “Our work now
goes past venture investments as nicely. We’re increasing into
local weather policy-based financing to create an enabling setting
and incentivize local weather motion and help governments in these
efforts,” she defined. “We shared this new instrument at COP29
with our shoppers throughout all our occasions that we organized and
participated in”.
AIIB’s main photo voltaic funding in
Azerbaijan
Additional, Seleha Lockwood spoke about AIIB’s current main photo voltaic
funding in Azerbaijan, which marked a major step within the
financial institution’s local weather motion technique. “We launched a Local weather Motion plan
final 12 months, which emphasizes working carefully with our shoppers and
constructing significant partnerships. This explicit funding in
Azerbaijan exemplifies that method, as we’re collaborating with
different MDBs and the nation itself to help their power
priorities,” she stated.
The funding, totaling $160 million, will fund the event
of two photo voltaic PV energy vegetation: the 315 MWAC Neftchala Photo voltaic PV Energy
Plant and the 445 MWAC Bilasuvar Photo voltaic PV Energy Plant. The venture
is being developed in partnership with Abu Dhabi Future Vitality
Firm PJSC (Masdar), and can considerably contribute to
Azerbaijan’s renewable power capability.
“This venture is a transformative funding that may
considerably change the power combine in Azerbaijan,” Lockwood famous.
“We’re excited to be a part of this initiative, which holds
substantial strategic significance for the nation’s future power
panorama”.
The venture is co-financed by the Asian Improvement Financial institution (ADB)
and the European Financial institution for Reconstruction and Improvement (EBRD),
with SOCAR Inexperienced becoming a member of Masdar as an area accomplice. Lockwood
emphasised that this collaboration displays AIIB’s dedication to
fostering regional cooperation and supporting nations of their
local weather targets. “The partnership with a number of MDBs and native
gamers underscores the significance of collaboration in tackling
international challenges like local weather change,” she stated.
The photo voltaic funding is aligned with AIIB’s broader technique to
prioritize inexperienced infrastructure, consistent with its dedication to the
Paris Settlement. “Our technique prioritizes inexperienced infrastructure and
aligns with the targets of the Paris Settlement,” Lockwood acknowledged.
“Since July 1, 2023, all of our venture investments have been
aligned with Paris targets, and this funding is not any exception”.
AIIB’s dedication to the venture is already evident, as its
funding operations workforce has been actively engaged on the bottom
in Azerbaijan because the first week of the initiative. “We’re
already on the bottom, partaking with counterparts in Azerbaijan,
guaranteeing that the venture progresses easily,” Lockwood added.
AIIB spotlights infrastructure finance innovation at
COP29
Additional, Seleha Lockwood spoke aboutthe aspect occasion “Respiratory
Life into Infrastructure Finance”, hosted by AIIB on the sidelines
of COP29.
“This occasion was organized with a accomplice, Our Widespread Air, as an
official UNFCCC aspect occasion. The UNFCCC encourages such
collaborations. The occasion, titled Respiratory Life into
Infrastructure Finance: Integrating Well being, Air High quality, Local weather,
and Nature, was designed alongside different companions and aligned with
our economics division’s focus this 12 months.
On this occasion we constructed on the findings of the economics
division at AIIB on the interlinkages between well being, nature and
local weather in infrastructure funding. We’re additionally constructing on the
idea of nature as infrastructure that AIIB centered on in our
2023 Asian Infrastructure Finance report. For instance, as a substitute of
financing conventional gray infrastructure for flood management,
nature-based options, equivalent to mangroves, may provide higher
alternate options. This occasion highlighted the vital significance of the
well being perspective to motion on nature and local weather in
infrastructure funding,” she stated.
The principle takeaways emphasised the significance of contemplating
well being impacts when planning infrastructure investments and
exploring alternatives inside the healthcare sector to contribute
to mitigation and resilience. The method extends past
healthcare programs to think about well being holistically, contemplating
nature options as nicely.
Our Widespread Air, centered on air high quality and air air pollution and
that clear air must be thought of an asset class, Lockwood
added. “At AIIB, our evaluation addresses air high quality’s relevance,
however we transcend that to look at water high quality and different
environmental elements”.
“The criticality of cross-sectoral and cross-government motion
on built-in local weather, well being and nature motion was additionally mentioned
with the instance of the Brazil Local weather and Ecological
Transformation Funding Platform. Addressing gender inequalities
within the well being, air high quality, local weather and nature house have been
emphasised. Notice right here that AIIB launched its first Gender Motion
Plan this 12 months. New financing merchandise and approaches for financing
the well being, local weather and nature nexus have been raised equivalent to debt for
nature swaps.
The follow-up occasion, held on the Joint MDB Pavilion, centered on
Infrastructure for Planetary Well being. It constructed upon the preliminary
occasion and delved into the interconnections between well being, local weather,
and nature, in infrastructure funding. The primary session on
November 14 had a high-level strategic focus, whereas the Joint MDB
Pavilion occasion supplied a extra technical dialogue with particular
examples of integrating local weather, well being, and nature,” she
added.
AIIB drives local weather motion with revolutionary
financing
“At AIIB, we make the most of varied financing devices to deal with
gaps in funding for built-in actions associated to local weather,
nature, and well being,” Lockwood acknowledged. Highlighting a rising
curiosity in revolutionary options, she famous, “As talked about within the
joint MDB nature and biodiversity session I just lately participated
in on November 21 inside COP29, there’s a rising curiosity in
devices like debt-for-nature swaps. AIIB is exploring such
revolutionary financing approaches to deal with gaps and shopper
wants”.
One of many financial institution’s key methods is co-financing and blended
finance. This includes collaboration with philanthropic
organizations and funds, alongside different monetary entities, to
scale back capital prices and amplify influence. “Lots of our occasions
embody philanthropic organizations and funds providing grants or
different devices, which we mix with our financing to maximise
influence,” Lockwood defined.
AIIB can be leveraging capital markets to drive personal sector
participation. Lockwood cited the issuance of a 500 million
Australian greenback adaptation bond as a chief instance. “The initiatives
underpinning this bond are aligned with local weather finance monitoring
taxonomies for adaptation,” she emphasised, noting the profitable
attraction of personal sector curiosity.
The financial institution’s dedication extends to fostering regional
partnerships. “We make investments by native banks, as now we have achieved, for
occasion, with TSKB in Türkiye,” Lockwood famous. In 2022, AIIB
signed a $200 million mortgage settlement with TSKB for local weather change
mitigation and adaptation initiatives, following the same $200
million Sustainable Vitality and Infrastructure mortgage in 2018.
“By means of this fund, and consistent with the Paris Local weather Settlement,
TSKB will finance Türkiye’s investments in renewable power, power
effectivity, and supporting industries,” she added.
One other cornerstone of AIIB’s method is its local weather
policy-based financing instrument, which facilitates direct
collaboration with governments. “This includes figuring out regional
infrastructure financing gaps and figuring out acceptable instruments –
equivalent to market incentives, carbon markets, or different mechanisms for
local weather motion,” Lockwood stated. She emphasised that this technique
helps tailor-made options by upstream discussions with
governments, guaranteeing that investments align with inexperienced
infrastructure commitments.
“Our focus right here is to work with private and non-private sector
shoppers to determine the perfect choices for financing infrastructure.
This contains discussing holistic and multisectoral approaches to
maximize adaptation, mitigation, and nature options, in initiatives
and in local weather policy-based financing, together with country-led
funding platforms,” she stated.
A core factor of AIIB’s technique includes innovation in
monetary devices. “We’re dedicated to exploring revolutionary
monetary approaches, diversifying our financing provide,” she stated.
Highlighting local weather policy-based financing as a vital new device,
Lockwood added, “We goal to accomplice with others to discover
devices equivalent to debt-for-nature swaps, construct on the success of
our adaptation bond, and use capital markets extra creatively to
channel financing into this vital space”.
International collaboration stays on the coronary heart of AIIB’s operations.
“Partnering with different strategic entities, equivalent to different MDBs –
whether or not these skilled in debt-for-nature swaps or these engaged
with nations on local weather plans – is a core precept of AIIB’s
worldwide operations,” Lockwood famous. Regardless of its regional
focus, AIIB’s international membership permits it to increase its efforts
worldwide. “For instance, we’ve had significant engagements in
Brazil, reflecting how our worldwide attain aligns with our
aims,” she defined.
Lockwood additional underscored AIIB’s dedication to shaping the
local weather agenda by cooperative efforts. “Our priorities and
collaborations established at this COP are well-aligned with our
Asian and international mandate and can proceed to form our efforts as
we transfer ahead from this COP to the following,” she concluded.
