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Unleashing climate finance flows at COP29 – the role of the NCQG and NDCs

Published

6 hours ago

October 24, 2024

unleashing-climate-finance-flows-at-cop29-–-the-role-of-the-ncqg-and-ndcs

The latest publication from the Energy Transitions Commission (ETC): “NDCs, NCQG, and Financing the Transition”

LONDON, Oct. 24, 2024 /PRNewswire/ — “Climate finance” will be a key subject at COP29, with debate in particular on the proposed “New Collective Quantified Goal” (NCQG) for financial flows from high-income to low-income countries. But the term “climate finance” is often used vaguely and broadly, covering several different challenges and priorities.

The Energy Transitions Commission’s (ETC) latest publication “NDCs, NCQG, and Financing the Transition” therefore clarifies the nature and scale of different types of finance required, and proposes four principles to ensure a useful conclusion of the NCQG debate. It also explains the vital role that updated National Determined Contributions (NDCs) can and must play in unleashing financial flows.

The NCQG and NDCs

The Paris climate pact included a commitment to agree on the extent to which higher-income countries will financially assist low-income countries with mitigation and adaptation. This NCQG will replace the current $100 billion per annum target for climate finance flows from developed to developing countries which was agreed in 2009 but consistently undelivered until 2022.

The NDCs are the crucial mechanism, established by the Paris Conference, through which countries commit to voluntary national actions to reduce emissions, in line with the global objective of limiting global warming to well below 2°C. Countries are required to submit ratcheted NDCs every five years.

Current NDCs (submitted in 2020) put the world on track to overshoot 2°C warming by 2050 even if implemented. Increasing ambition in the next round of NDC is therefore crucial but achievable because dramatic cost reductions in key technologies (in particular solar PV, wind power and batteries) mean that countries can now rapidly reduce emissions while continuing to meet growing demands for affordable energy access and use.

“COP29 debates on the NCQG need to start with a clear definition of the very different categories of “climate finance” and recognition of the different appropriate funding sources. And however the NCQG debates conclude, countries should use updated and more ambitious NDCs to help unleash the private finance which will play the primary role in funding capital investment for mitigation. But it is also essential for development banks to play an increased and more effective role in supporting financial flows to middle and low-income countries.” – Adair Turner, Chair, Energy Transitions Commission.

“Through frameworks like the NCQG and NDCs, countries can set ambitious goals backed by policies that attract large-scale investments from the private sector and can meet the majority of finance needs for climate mitigation and adaptation. Multilateral Development Banks are crucial to providing affordable finance for decarbonising energy systems and building climate resilience in developing nations while ensuring that economic growth aligns with the clean energy transition.” – Nicholas Stern, Chair, Grantham Research Institute on Climate Change.

“Climate finance” – the need for clarity on categories, quantities, and potential sources

The term “climate finance” is often used without distinguishing the types of finance required which are financed in quite different ways. The ETC’s brief draws a clear distinction between:

The capital investments needed to establish zero carbon energy systems globally and mitigate climate change. These investments average around $3 trillion annually until 2050.¹ Most of this investment will be financed by private institutions delivering an attractive rate of return to investors if appropriate real economy policies are in place. Multilateral development banks (MDBs) and other public financial institutions must also play a significant role to support financial flows to middle and low-income countries.
Concessional or grant payments may be required to mitigate emissions in specific areas – in particular, to close coal plants early, end deforestation, and finance carbon removals – which may not generate a return on investment. These payments could come from carbon offset markets, philanthropic funds, or inter-governmental contributions. The ETC estimated $300 billion of this type of payment is required annually, but actual flows are unlikely to reach this magnitude, necessitating other measures, such as strong policy, to achieve emission reductions.
Investments in adaptation – for instance in flood management or coastal protection – to deal with the already inevitable consequences of global warming. The Songwe-Stern 2022 report suggested these might reach $250 billion per annum in middle and low-income countries. A significant part will be financed from domestic resources (especially in middle-income countries) but there is a major essential role for loans provided by MDBs and for concessional payments or grants from high-income countries.
Payments to help lower-income countries cope with the loss and damage already produced by climate change. The Songwe-Stern report estimated that these costs in middle and low-income countries might reach $200–$400 billion per annum by 2030. At COP27 in 2022, the principle was agreed that higher-income countries should contribute towards meeting these costs.

Optimal results from the NCQG debate at COP29

There are widely divergent views on what the NCQG should cover. Some countries believe that “loss and damage” payments should be included, but others argue that the focus should be on mitigation and adaptation finance. India and some Arab countries have called for a headline figure of over $1 trillion per annum but high-income countries have not yet committed to any figure above $100 billion per annum. Many of those high-income countries believe moreover, that the definition of contributing countries should be expanded to include high per capita emissions countries such as Saudi Arabia, UAE and China.

Given this divergence of opinions going into COP29, there is a risk that no consensus will be reached or that the resulting agreement will use vague language that can be interpreted in many different ways.

The ETC’s focus and expertise relate to the challenge of mitigation and we believe that the NCQG will have the best impact on global mitigation efforts if it includes:

Clarity on the different types of investment/payment needed, sources that can meet this need (e.g., private finance, MDB loans, or concessional/grant finance), and what is covered by the NCQG headline figure.
Strong focus on the very large-scale financial flows required to support mitigation in middle and low-income countries (e.g., about $900 billion a year) and the significant role that MDBs must play, including in catalysing private financial flows. Multiple reports have already described what must be done to enable MDBs to play a greater and more effective role.² Analysis should now be replaced by action.
Expansion of the definition of contributing countries to include at least China and high-income oil and gas producers such as Saudi Arabia, UAE, and Qatar because of these countries’ high per capita emissions and low cost of capital.
Strong support for new sources of funds such as:

Global carbon taxes on aviation and shipping as proposed by the Nairobi Declaration.
The allocation of revenues from border carbon adjustment mechanisms (CBAMs) to support climate finance flows to low-income countries.

Key priorities for the NDCs

Most capital investment to drive mitigation will be financed by private institutions (or state-owned companies acting in a market-competitive fashion). But governments have a responsibility to incentivise that investment through well-designed policies. Clearer and more ambitious NDCs could also help by providing certainty about future objectives and supporting policy. The ETC recommends that the next round of NDCs should:

Set more ambitious emission reduction targets to reflect technological progress and cost reductions already made, and align NDC objectives with existing policy commitments.
Define strong links between targets and supporting policy, acting as comprehensive roadmaps for implementation.
Contain absolute or equivalent emissions targets for specific sectors and cover all greenhouse gases.
Identify the investments required to deliver emissions reductions and the broad balance of financing sources envisaged.

Download the briefing note: https://www.energy-transitions.org/publications/ndcs-and-financing-the-transition/

Notes to Editors

¹ In our 2023 report Financing the Transition, the ETC estimated that $3.5 trillion per annum is required for climate mitigation investment between now and 2050. This will be offset by an average annual reduction of $0.5 trillion in fossil fuel investment, to give a net figure of $3 trillion per annum.

² For example, Independent Expert Group (2019), Transforming the Financial System for People and Planet; Blended Finance Taskforce (2021), Better Finance, Better World; European Investment Bank (2022), Joint Report on Multilateral Development Banks’ Climate Finance; OECD (2022), Multilateral Development Finance 2022; International Finance Corporation (2023), Mobilisation of Private Finance by Multilateral Development Banks and Development Finance Institutions.

NDCs, NCQG, and Financing the Transition: Unlocking Flows for a Net-Zero Future builds on previous ETC work including, Financing the Transition and Credible Contributions. It is based on analysis developed in extensive consultation with ETC Members from across industry, financial institutions, and environmental advocacy and constitutes a collective view of the Energy Transitions Commission. However, it should not be taken as members agreeing with every finding or recommendation.

The ETC is a global coalition of leaders from across the energy landscape committed to achieving net-zero emissions by mid-century. For further information on the ETC please visit: https://www.energy-transitions.org

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Fintech PR

Saudi Arabia’s Ministry of Industry and Mineral Resources Invites Mining Companies to Join Its 7th Licensing Round

Published

38 mins ago

October 24, 2024

CISION (PR Newswire)

RIYADH, Saudi Arabia, Oct. 24, 2024 /PRNewswire/ — The Ministry of Industry and Mineral Resources (MIM) is inviting exploration and mining companies to participate in its 7th round of exploration licensing. The licensing round, consisting of 7 sites with a total area of more than 1070 sq. km, will be open for bidding from mid Of October, with Successful bidders set to be announced in December.

The sites up for auction include;

Wadi al Lith: covers an area of 243.87 km2 and is located within the Mecca Region, 200 km from Jeddah. Commodities on the site include Cu, Au, and Zn.
Jabal Baudan: covers an area of 244.92 km2 and is approximately 200km south of Jeddah. The site contains commodities like Cu, Au, and Zn.
Jabal Sabha: covers an area of 171.5 km² in the central part of Saudi Arabia, approximately 650km from the Jeddah port. Commodities include Ag/Pb/Zn (Nb, Au, Co).
Jabal al Ad Dimah: covering an area of 210.90 km2, is located approximately 200km south of Jeddah. It contains deposits of Cu, Au, and Zn.
Jabal al Klah North: is part of the Ad Dawadimi Terrane located in the eastern part of the Arabian Shield, 750 km northeast of Jeddah and 320 km from Riyadh. It covers an area of 98,15 km2 and contains large deposits of Ag, Pb, and Zn.
Jabal al Klah South: covers an area of 19,21 km2. The site is part of Ad Dawadimi Terrane, located in the eastern part of the Arabian Shield, 750 km northeast of Jeddah and 320 km from Riyadh. Commodities include Ag, Pb, and Zn.
Umm Hijlan (Mamilah): covers an area of 78.4 km².The site is located in Mecca region, approximately 270km from the Jeddah port. Commodities include Au,Pb and Cu

Interested investors are invited to view the Information Memorandum by visiting Ta’adeen website at https://taadeen.sa/en/mining-bids to access the data room for the sites.

Saudi Arabia offers several competitive incentives to support investors across various sectors and industries. These include 75% co-funding for capital expenditure (CAPEX), a five-year exemption on royalty fees, discounts of up to 30% for local downstream processing (with potential savings of up to 90%), a competitive 20% corporate tax rate, and the advantage of 100% foreign direct ownership.

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Kindred Group applies for delisting

Published

2 hours ago

October 24, 2024

CISION (PR Newswire)

SLIEMA, Malta, Oct. 24, 2024 /PRNewswire/ — La Française des Jeux SA’s (“FDJ”) recommended public offer to the holders of Swedish Depository Receipts (the “SDRs”) in Kindred Group plc (“Kindred” or the “Company”) to tender all their SDRs in the Company at a price of SEK 130 in cash per SDR (the “Offer”) was declared unconditional on 3 October 2024. After the end of the extended acceptance period, FDJ controls in total approximately 98.60 percent of the outstanding SDRs in the Company. Against this background, the board of directors of Kindred has today applied for delisting of the SDRs in Kindred from Nasdaq Stockholm.

On 22 January 2024, FDJ announced a recommended public cash offer to the holders of SDRs in Kindred to tender all their SDRs in the Company at a price of SEK 130 in cash per SDR. On 3 October 2024, FDJ announced that the Offer had been accepted to such an extent, as at the end of the initial acceptance period on 2 October 2024, that FDJ would become the owner of 90.66 percent of all the outstanding SDRs in Kindred and declared the Offer unconditional. Since the time of announcement of the Offer, FDJ had also acquired an additional 2,400,000 SDRs, corresponding to approximately 1.11 percent of the outstanding SDRs in Kindred, from Veralda at a price not exceeding the price in the Offer. As a result, FDJ controlled in total 198,059,291 SDRs, corresponding to approximately 91.77 percent of the outstanding SDRs in the Company.^[1]

In order to provide the remaining holders of SDRs in the Company with the opportunity to accept the Offer, FDJ extended the acceptance period of the Offer until and including 18 October 2024. During the extended acceptance period, the Offer has been accepted by SDR holders with a total of 14,734,917 SDRs, corresponding to approximately 6.83 percent of the outstanding SDRs in the Company. After the end of the extended acceptance period, FDJ thus controls in total 212,794,208 SDRs, corresponding to approximately 98.60 percent of the outstanding SDRs in the Company. FDJ has on 23 October 2024 initiated squeeze-out proceedings of the SDRs in Kindred not held by FDJ, and requested that the board of directors of Kindred applies for delisting of the SDRs in the Company from Nasdaq Stockholm.

In light of the above, the board of directors of Kindred has today, in accordance with FDJ’s request, applied for delisting of the SDRs in the Company from Nasdaq Stockholm. Kindred will announce the last day of trading as soon as Nasdaq Stockholm has confirmed the date to the Company.

For more information:
Patrick Kortman, Interim CFO
[email protected]

The information was submitted for publication, through the agency of the contact person set out above, at 17:55 (CET) on October 24, 2024.

About Kindred Group

Kindred Group is one of the world’s leading online gambling operators with business across Europe and Australia, offering over 30 million customers across 9 brands a great form of entertainment in a safe, fair and sustainable environment. The company, which employs approximately 2,500 people, is listed on Nasdaq Stockholm Large Cap and is a member of the European Gaming and Betting Association (EGBA) and founding member of IBIA (International Betting Integrity Association). Kindred Group is audited and certified by eCOGRA for compliance with the 2014 EU Recommendation on Consumer Protection and Responsible Gambling (2014/478/EU). As of 11 October 2024, La Francaise des Jeux is the majority shareholder in Kindred Group plc. Read more on www.kindredgroup.com.

Nasdaq Stockholm, KIND-SDB

^[1] Based on 215,823,068 outstanding SDRs in Kindred, which excludes 14,303,068 treasury SDRs held by Kindred. Each SDR carries one vote.

This information was brought to you by Cision http://news.cision.com

https://news.cision.com/kindred-group/r/kindred-group-applies-for-delisting,c4055941

The following files are available for download:

https://mb.cision.com/Main/824/4055941/3074289.pdf

Project Odin – Application for delisting Final

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DFC Expands Global Impact With Record-Breaking Investments in Fiscal Year 2024

Published

3 hours ago

October 24, 2024

CISION (PR Newswire)

Total annual commitments more than doubled since agency’s launch five years ago
Driving global development with more than 180 strategic transactions

WASHINGTON, Oct. 24, 2024 /PRNewswire/ — The U.S. International Development Finance Corporation today announced that it committed a record $12 billion in investments in Fiscal Year 2024 to projects that are improving lives and promoting economic growth across the developing world by expanding access to food, energy, healthcare, critical infrastructure, and financial services.

In Fiscal Year 2024, DFC tackled some of the world’s greatest challenges by supporting transactions in 44 countries, with a total portfolio spanning over 110 countries across Africa, the Middle East, Latin America, Europe, and the Indo-Pacific. DFC’s new commitments are expected to finance 450,000 smallholder farmers, generate 4,600GWh of renewable energy, improve healthcare for more than 11 million patients, and fuel growth for 380,000 micro, small, and medium-sized businesses.

“Fiscal Year 2024 was a remarkable year for DFC, both in terms of volume of investment and our impact on some of the world’s most pressing challenges. In just five years since its creation, DFC’s private-sector-led approach has established DFC as a pivotal instrument in U.S. foreign policy and a key player in the development finance space,” said DFC CEO Scott Nathan. “The new investments made this year will provide badly needed financing to entrepreneurs and businesses, driving economic growth and stability in the countries where we work. I’m proud of the hard work and accomplishments of the DFC team to support development and bolster U.S. national security.”

In Fiscal Year 2024, DFC committed to over 180 transactions. Activity included:

Invested where American values and interests intersect. DFC’s dual focus on global development and American national security helps ensure its investments benefit both the United States and the host countries.

In Angola, DFC’s board approved a loan of up to $553 million to the Lobito Atlantic Railway to support the upgrade and rehabilitation of more than 800 miles of rail and a mineral port to help ensure the reliable transport of minerals that are critical to the clean energy transition. In a related transaction, DFC also committed a $3.4 million technical assistance grant to Pensana to conduct feasibility studies to advance development of a rare earth mine and refining facility in the Lobito Corridor.
In Indonesia, an up to $126 million DFC loan to PT Medco Cahaya Geothermal will finance the development of approximately 31.4MW of geothermal power generation capacity in East Java.
In South Africa, a $50 million equity investment in TechMet will support the development of the Phalaborwa Rare Earths project, a rare earth element processing facility that will develop a more diverse, resilient, and sustainable critical mineral supply chain, drive the clean energy transition, and create economic opportunity for local communities.

Provided critical support to the people and businesses impacted by the war in Ukraine. DFC continued its support for Ukraine, committing more than $580 million to a wide range of sectors crucial to the country’s recovery and stability amid the conflict. This included one of its signature tools to address the most urgent Ukrainian economic needs and lay a foundation for long-term resilience: political risk insurance.

$10 million in political risk insurance will support the rebuilding of a water treatment and water filtration equipment manufacturing facility destroyed during Russia’s invasion.
$50 million in political risk insurance will support a reinsurance facility brokered by Aon and distributed by ARX to build a portfolio of war risk insurance policies for companies operating in Ukraine and to support ARX in expanding its war risk insurance offering in the country.
$150 million in political risk insurance will help maintain the country’s agriculture operations and alleviate food insecurity.

Strengthened global supply chains. DFC invested in infrastructure to bolster access to essential goods and services including food, energy, healthcare, technology, and critical minerals.

In South Africa, a €110 million DFC loan will help Aspen Pharmacare expand its capacity to deliver medicines, diabetes insulin, and pediatric vaccines, increasing local access to life-saving medicines and vaccines across Africa.
In Zambia, a $10 million loan to Seba Foods Zambia Ltd. will support the expansion of the company’s storage and production capacity and provide affordable, soy-based consumer food products, strengthening the food value chain in Zambia.
In Türkiye, a $350 million loan to Enerjisa Enerji Üretim A.Ş. will finance the development, construction, and operation of nine onshore wind power plants in Western Türkiye that are expected to generate approximately 2.51 terawatt-hours per year.

Advanced high-standard, transparent investing to achieve sustained impact. DFC adheres to the highest standards on worker rights and the environment and works to ensure its investments deliver a sustained positive impact.

In India, DFC committed a $10 million loan to Nepra Resource Management for construction of material recovery facilities for the recycling and sustainable disposal of material waste that will reduce waste in landfills.
Across Africa, a $250 million tier 2 capital loan to Africa Finance Corporation will strengthen the capital position of a key pan-African multilateral development finance institution to support its operating activities, including investment activities consisting of infrastructure projects critical to economic growth and development.
In the Western Hemisphere, a $50 million equity investment in PI Fund V (Ontario), L.P. will increase investments in Latin American infrastructure and address financing gaps to develop critical projects, with a primary focus on Brazil, Colombia, Peru, and Mexico.

Supported the world’s low-income countries and underserved communities. DFC focuses a majority of its transactions in low- and lower-middle-income countries and prioritizes investments that benefit women and other underserved populations.

In India, a $50 million loan to InCred Financial Services Ltd. will support lending to women and women-owned businesses using a technology-enabled lending approach designed to expand access to underserved entrepreneurs and individuals.
In the Dominican Republic, where nearly one quarter of the population lives below the poverty line, DFC committed $200 million in financing to Banco Popular Dominicano, S.A. to support lending to small businesses, with a focus on women entrepreneurs.
In the Philippines, DFC committed a $20 million loan to Lhoopa Singapore Pte. Ltd. that will support a digital platform focused on the development of affordable housing for low-income families throughout the country.

Learn more about DFC’s record-breaking year.

The U.S. International Development Finance Corporation (DFC) partners with the private sector to finance solutions to the most critical challenges facing the developing world today. We invest across sectors including energy, healthcare, infrastructure, agriculture, and small business and financial services. DFC investments adhere to high standards and respect the environment, human rights, and worker rights.

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