COP26: CDC Group to invest £3bn in climate action in emerging markets
The UK’s development finance institution is to invest over £3bn in emerging markets to help them meet their Paris Agreement goals and to adapt and build resilience to the effects of climate change.
CDC Group will invest in sectors including renewable power, infrastructure and agriculture over the next five years – making the 70-year-old organisation one of the world’s largest climate finance investors in Africa and some south Asian markets, according to a statement yesterday.
The announcement is part of the UK’s ‘Clean Green Initiative’, announced at this week’s COP26 climate summit, which aims to help developing countries take advantage of green technology and grow their economies sustainably, and which also includes guarantees to the World Bank and the African Development Bank to back climate-related projects in India.
COP is about making specific commitments to act, and this is demonstrated by a doubling of our financial support
The £3bn includes £200m for a new Climate Innovation Facility to scale up technologies that help people in developing countries to deal with the impacts of climate change. This is double the amount of climate finance CDC invested in 2017-2021.
The venture capital fund’s first investee is Kenya-based agritech business Pula, which will pilot a new insurance product.
Billions needed
The United Nations estimates annual costs in developing countries of adapting to climate change at US$70bn, expected to rise to up to $140-300bn in 2030. Developed countries confirmed last week that they had failed to meet a 2009 pledge to provide $100bn per year in climate finance to developing countries by 2020; the pledge would now be met in 2023.
Nick O’Donohoe, CEO of CDC, said the new commitments would make CDC a “global leader in climate finance” in Africa and south Asia.
He added: “COP is about making specific commitments to act, and this is demonstrated by a doubling of our financial support to those countries most vulnerable to the ravages of the climate emergency”.
CDC has investments in over 1,200 businesses in emerging economies and a total portfolio value of $6.2bn.
In addition to this week’s commitments, it announced several new climate-related investments for the current financial year, including $70m investment in the Green Growth Equity Fund, India’s first dedicated climate finance fund, and $37m investment in Africa Renewable Energy Fund II, which invests in small hydro, wind, geothermal and solar projects across sub-Saharan Africa.
Header image: a women's cooperative in southern Mauritania uses solar energy to operate a borehole supplying water to the market garden, as part of a project piloted by UNICEF with local authorities (credit: Raphael Pouget / Climate Visuals Countdown)
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