Mobilizing Finance for Climate Outcomes through USAID’s Climate Finance for Development Accelerator

by Komoneed | Jan 26, 2024

Mobilizing Finance for Climate Outcomes through USAID’s Climate Finance for Development Accelerator
jschoshinski
Tue, 01/09/2024 – 20:25

When USAID set a target to mobilize $150 billion in finance for climate at COP26, a lot of people thought it might have been another overly-zealous commitment that had little bearing on reality. Truth be told, it is a stretch for the Agency, which in prior years mobilized an average of $6 billion per annum. Why then would USAID set such an ambitious target when foreign assistance broadly is unlikely to increase? We bet on the fact that with new ways of working and better, more consistent measurement, we can rapidly accelerate our net-zero pathway to assist developing economies to meet climate mitigation and adaptation needs.  
At COP27, USAID took significant strides forward by introducing innovative mechanisms aimed at achieving our ambitious targets. Among these initiatives, the Climate Finance for Development Accelerator (CFDA) stands out. This groundbreaking platform was designed to broaden access to USAID for a diverse spectrum of stakeholders within the climate finance ecosystem. CFDA serves as a vital hub, facilitating collaboration between climate finance providers and seekers, fostering alignment of efforts, maximizing impact, and streamlining operational efficiency in partnerships with private climate finance actors. USAID has utilized CFDA as a dynamic testing ground, piloting diverse mobilization approaches to finance climate adaptation, clean and renewable energy, nature-based solutions, and women-led and women-benefitting climate solutions. Simultaneously, CFDA spearheaded the establishment of a robust Climate Finance and Investment Network, boasting an extensive membership of over 800 engaged stakeholders. 
Remarkably, within just one year CFDA has operated with exceptional speed, achieving multiple milestones, including:
Announcing the selection of six enterprises with promising adaptation solutions to receive grants under the first round of the Adaptation Finance Window. 
The Adaptation Finance Window aims to accelerate the pace of private investment and market development for climate adaptation by providing catalytic capital to de-risk investments, remove barriers to investment, and bring in bilateral donors with shared objectives to streamline funding for applicants. In this first round, CFDA is providing catalytic grant funding to help companies with promising adaptation solutions get from concept or pilot to launch–or to scale products and services to new markets. With CFDA’s support, a top-tier cohort of local and international companies operating in Africa and Asia will scale parametric climate insurance coverage for farmers; enhance market-based water collection, storage, and use efficiency; and support businesses themselves to be resilient to climate hazards.
Launching a second call for proposals under the Adaptation Finance Window seeking adaptation-focused investment funds and vehicles. 
The Adaptation Finance Window works on both the demand side of adaptation finance (companies and enterprises seeking capital) and the supply side (investment funds looking to achieve scale and identify bankable projects). Following on the heels of the Window’s first round, CFDA launched a second round to provide a suite of financing tools–from grants to credit guarantees–to innovative funds or investment vehicles that will deliver significant outcomes for climate adaptation. This is the first joint call for proposals under the newly formed Investment Mobilization Collaboration Agreement (or IMCA, launched at COP28), a partnership between the U.S. and Nordic countries to facilitate concrete pipeline collaboration, knowledge sharing, and the establishment of blended finance vehicles to catalyze private capital into Africa, Asia, and Latin America at scale and speed. 
Naming two awardees under the Blended Finance for the Energy Transition initiative: responsAbility Investments AG and Eversource Capital. 
The Blended Finance for the Energy Transition (BFET) initiative aims to mobilize $1 billion to accelerate emerging markets’ efforts to achieve a just and resilient energy transition and limit global temperature rise to 1.5°C. It is a unique partnership between USAID; the U.S. Department of State, in collaboration with the U.S. Special Presidential Envoy for Climate; and the Danish Ministry of Foreign Affairs and Investment Fund for Developing Countries. BFET selected two private sector partners launching innovative financial vehicles that will mobilize and deploy capital into investments that accelerate the just energy transition in emerging economies with high emissions. These partners will receive catalytic grant funding from BFET to help better align investment opportunities with the needs of institutional investors and other capital providers, unlocking new, deep pockets of capital for the energy transition. BFET will also work with them to ensure local communities benefit from the transition to clean energy, incorporating analysis of job creation and job quality into their fund management approaches.
Welcoming the Ocean Risk and Resilience Action Alliance as the anchor partner under the Coastal Resilience, Carbon, and Conservation Finance initiative. 
CFDA launched the Coastal Resilience, Carbon, and Conservation Finance initiative to encourage the flow of private sector capital into coastal resilience and blue carbon projects that generate biodiversity conservation, climate mitigation, and adaptation outcomes while ensuring that local communities benefit. Through a competitive process, CFDA selected the Ocean Risk and Resilience Action Alliance to leverage its considerable expertise in driving investment into ocean resilience to lead two efforts: identifying a pipeline of bankable biodiversity, coastal resilience, and blue carbon projects in countries where USAID works; and cultivating a community of blue carbon and coastal resilience experts to share knowledge and strengthen global understanding of best practices. These activities will serve as a foundation for future USAID partnerships with local stakeholders that build capacity to develop bankable, climate-positive projects and address information asymmetries between local communities and investors–leading to investments that safeguard local resources and livelihoods. 
Adding a first cohort of women-led organizations selected to receive grants, a new founding member, and an additional $5 million commitment from USAID to the Climate Gender Equity Fund. 
A year after launching the Climate Gender Equity Fund (CGEF)—a public-private partnership focused on catalyzing gender equity in climate finance—USAID and Amazon, along with grants manager 2X Global and CGEF’s other founding members, announced the first cohort of women-led organizations selected to receive grants from CGEF, each of which is focused on advancing gender-equitable climate action in Africa. The three organizations selected are a women-led acceleration hub in Nigeria that is scaling new climate technologies; an accelerator in South Africa that supports female science, technology, engineering, and math business founders; and an incubator in Kenya that focuses on women entrepreneurs working on climate-smart agriculture solutions. Since CGEF launched last November, its founding members, including USAID, Amazon, Reckitt, Visa Foundation, and now The UPS Foundation, have committed a combined $20 million to the fund, with USAID announcing an additional $5 million during COP28. CGEF expects to announce additional grantees in the near future. 
Announcing USAID and Prosper Africa’s support for the Green Guarantee Company, the first-ever privately run guarantee company devoted to catalyzing green bonds and loans in partner countries, focusing on Africa, Asia, and Latin America. 
The Green Guarantee Company (GGC) will assume the financial risk associated with green bonds and loans to systematically de-risk and effectively catalyze scale-level private investments in climate solutions. By taking a blended finance approach–combining donor funding and private capital– GGC is delivering innovative approaches to mobilizing and localizing greater private investments to fund climate projects. Subject to final documentation, the United States, through USAID, the U.S. Department of State, and Prosper Africa, alongside the UK’s Foreign Commonwealth and Development Office, the Green Climate Fund, Norfund, and the Nigerian Sovereign Investment Authority, intend to contribute to GGC’s initial balance sheet of $100 million, enabling GGC to unlock an estimated $1 billion in new mainstream private capital for climate finance by 2024. 
In light of this remarkable progress, USAID looks forward to continuing its work with implementing partners, the private sector, and other governments to make the necessary levels of climate finance a reality in the near future.

Teaser Text
Remarkably, within just one year CFDA has operated with exceptional speed, achieving multiple milestones.

Publish Date
Thu, 01/11/2024 – 12:00

Author(s)

Sashi Jayatileke

Hero Image
DSC03094_edited.jpg

Blog Type
Blog Post

Strategic Objective

Adaptation
Integration
Mitigation

Region

Global

Topic

Adaptation
Biodiversity Conservation
Climate Finance
Climate/Environmental Justice
Climate Strategy
Coastal
Clean or Renewable Energy
Gender and Social Inclusion
Nature-based Solutions
Private Sector Engagement

Sectors

Climate Finance and Economic Growth

Projects

USAID Climate Finance for Development Accelerator (CFDA)

Gigantic solar farms might impact how much solar power is generated on the other side of the world

by Komoneed | Jan 26, 2024

Solar farms can become large enough to affect the weather around them and ultimately the climate as a whole.
The post Gigantic solar farms might impact how much solar power is generated on the other side of the world appeared first on Sustainability Times.

Material Guide: What Is Cupro Fabric and Is It Sustainable?

by Komoneed | Jan 26, 2024

Cupro is a silky man-made cellulosic fibre often touted as a more sustainable alternative to rayon fabrics. Here’s the low-down on cupro. Is the silky alternative to rayon as sustainable as they say? When producing clothes, the fashion industry uses a wide variety of materials. They can typically be separated into basic categories including plant-based […]
The post Material Guide: What Is Cupro Fabric and Is It Sustainable? appeared first on Good On You.

Keeping the Australian Open clean and sustainable

by Komoneed | Jan 26, 2024

Quayclean’s Australian Open workforce of 1200 cleaners will work 24/7 throughout the 15-day tennis tournament, with 900,000 fans expected to attend the event across the Melbourne & Olympic Park (M&OP) precinct.

Quayclean is working with Tennis Australia and M&OP to make the tournament a memorable and sustainable event. Over 750 of its team members will be rostered every day of the tournament, covering three separate shifts over a 24-hour period.

Last year, Quayclean managed and removed more than 38 tonnes of mixed recycling, 24 tonnes of kitchen organics, 37 tonnes of cardboard and over 33 tonnes of crushed glass. Similar waste volumes are anticipated this year.

The company’s team of 25 Trash Talkers, who assist fans to separate waste into the appropriate designated bins, are back in force to help and educate spectators.

The Green My Plate service, where reusable plates and bowls are collected and hygienically washed and cleaned, is also available again.

Quayclean has established a team that will operate back of house to sort waste from five recycling hubs into six separate waste areas — food waste, co-mingle waste, reuasable waste, soft plastics, polystyrene and landfill.

The team will also separate bottles and cans from the co-mingle waste, with the Victorian Government introducing the Container Deposit Scheme last November.

Mark Piwkowski, Quayclean CEO, said, “There have been months of planning with Tennis Australia and M&OP and other site stakeholders to ensure this year’s Open sets new environmental and sustainability benchmarks.

“Our goal is to supercharge the Open’s waste management and sustainability systems and divert the high majority of waste away from landfill, which will represent financial and social benefits for the tournament organisers.”

Towards a circular packaging industry

by Komoneed | Jan 12, 2024

While the legislative process got underway in 2023, it is uncertain whether the subsequent trilogue process, in which the European Council, Parliament and Commission must find a final compromise, will be completed before the next European elections in June 2024. In pursuing this legislative update, the European Commission aims to achieve three main goals.

The first is to prevent packaging waste from being created in the first place by placing restrictions on unnecessary packaging and favouring reusable and refillable solutions. The second is for a closed recycling loop to ensure that all packaging on the EU market is reusable or recyclable in a commercially viable manner by 2030. Thirdly, the Commission wants to reduce the demand for primary raw materials by creating a functioning market for secondary raw materials — to this end, it will set compulsory targets to increase the amount of recycled plastics in packaging materials.

Industry takes action

While the ambitiousness of the PPWR might have caused debate within the packaging industry, there are many associations and businesses in the field that are pursuing their own innovative developments to further the creation of a circular economy. This was apparent at the 2023 interpack expo, whose theme of a circular economy drew a large number of exhibitors focused on solutions for effective recycling and the use of recycled materials in packaging production.

Recently, the association of European plastics producers, Plastics Europe, released an action plan for plastics production without fossil resources. While it may not be possible to eliminate the use of these materials entirely, the so-called Plastics Transition Roadmap shows how 65% of fossil resources in plastics production can be replaced by circular feedstocks from biomass, recycled materials and carbon capture by 2050.

“The Plastics Transition Roadmap, which we developed together with Deloitte, shows how we can reduce CO2 emissions in the plastics value chain by 28% by 2030 and transform the industry into an ecofriendly circular economy by 2050,” said Ingemar Bühler, Managing Director of Plastics Europe Germany.

“With the support of the German Government and the European Commission, European plastics manufacturers could increase the share of circular feedstocks in plastics production to 25% by 2030 and 65% by 2050.”

Reducing plastic usage wherever possible

interpack exhibitor Greiner Packaging is working to cut down on plastics through its K3 packaging solutions (cardboard-plastic combinations). With its latest development, the K3 r100 cup, the cup’s cardboard wrap separates itself from the unprinted plastic cup on its own during the waste collection process, making it possible to recycle both materials. Additionally, the company’s thermoformed cups are already labelled in the mould using the in-mould labelling (IML) process and weigh about 25% less than an injection-moulded equivalent.

Plastics manufacturers such as Joma from Austria are also increasingly developing recyclable solutions, such as a spice grinder showcased at interpack from Joma’s re:cycle range, which is made of 100% recycled PET. rPET is currently the only plastic with a certified circular economy that is approved for direct contact with food.

Cardboard packaging with barrier properties and without aluminium

The trend towards circular solutions applies to other packaging materials too. Drinks cartons are one example: Swiss manufacturer SIG has developed a full-barrier packaging material for aseptic carton packaging solutions that does not require an aluminium layer.

The new material, called SIG Terra Alu-free + Full Barrier, can also be used for oxygen-sensitive products such as juices thanks to the full-barrier protection. It has netted the company a design for circularity award from 4evergreen, an association of over 100 manufacturers, designers, brand owners, researchers and recyclers.

Driven by the belief that packaging recyclability begins with good design, 4evergreen published the second edition of its Circularity by Design Guidelines in the European summer of 2023. These featured new guidance for sustainable beverage packaging design.

Categorising materials through state-of-the-art tech

Where did the raw materials used in packaging come from? When and where were they processed, and what exactly were they processed into? Shampoo bottles, cereal liners and other packaging solutions often have a complex structure consisting of different materials.

In order to recycle effectively, businesses need transparency about the type, origin and processing of the raw materials used, but at present there is no standardised recording or structured supply of information about recycling in plastics production processes. To make this easier going forward, GS1 Germany has joined forces with stakeholders from the plastics industry to develop the Circular Plastics Traceability guidelines for standardised collection and structured sharing of data relevant to recycling. A common data framework now enables all partners involved to share consistent data with each other and to trace back the journey of each plastic through the loop system.

“At R-Cycle, as a development partner and user of the new GS1 Germany guidelines, we offer a standardised IT infrastructure for data sharing and transparency throughout the life cycle of plastics. The data is saved automatically in line with the Circular Plastics Traceability guidelines and can be shared with all parties along the value chain,” said Benedikt Brenken, Director of R-Cycle.

Additionally, German company Polysecure has developed Sort4Circle, a new sorting technology that separates different types of packaging containing polyethylene (food, cosmetic, detergent, monolayer, multilayer, etc) in line with relevant specifications.

Making film from seaweed

A host of research projects are exploring possible applications for renewable raw materials. This includes German company Brabender, which together with Dresden University of Technology is using marine algae to produce biodegradable film that simply dissolves after use.

“At [the 2023] interpack, we exhibited the conversion process from seaweed to finished packaging. Seaweed can be used, for example, to create film for packaging laundry capsules or dishwasher tablets,” said Ludwig Schmidtchen, head of the seaweed polymer project at Brabender.

As well as being water-soluble and suitable for injection moulding, the material can also be shaped as desired and is suitable for the production of sealable films. Brabender’s ‘Carraphane’ is an example of the circular economy in action. According to the company, it is produced from seaweed without waste and with minimal resource usage before being put through an extrusion process.

The film produced in this manner contains all the nutrients that are also present in the initial plant. The films biodegrade after a short time, with all the constituent components returning to nature. The seaweed material also has a significantly smaller environmental footprint than conventional plastics and bioplastics made from other renewable feedstocks.

Image credit: iStock.com/Nikita Burdenkov