Urgency, innovation, and investment at COP27

By Jake Levine, Chief Climate Officer, U.S. International Development Finance Corporation

At a time when the urgency of the climate crisis has never been greater, and our ability to finance the investments it requires has become increasingly fragile, I traveled with colleagues from across the U.S. Government to COP27, the United Nations Climate Change Conference in Egypt, with a message of resolve and action.?

Addressing the global climate crisis is a top priority for the Biden-Harris Administration. At COP27, we were proud to speak about how the U.S. Government, and specifically the U.S. International Development Finance Corporation (DFC), has responded decisively and collaboratively to the profound impact of the climate crisis. Despite launching less than three years ago, DFC has already catalyzed significant private sector investment to address the climate crisis, including efforts to protect the most vulnerable populations on the front lines of climate change.?

In the year since COP26 in Glasgow, DFC has taken major steps to ramp up and diversify its work in climate finance. DFC’s work paid off in a record-setting Fiscal Year 2022 (FY22). At COP27, DFC announced its FY22 achievements in scaling climate finance, including our commitment of more than $2.3 billion to climate-linked projects . And we paved the way to do more in FY23. We joined the European Bank for Reconstruction and Development (EBRD) to reaffirm our commitment to clean energy investing in Egypt through its Nexus of Water, Food, and Energy (“NWFE,” which in Arabic is translated to “fulfilling promises”) Initiative, which will decommission 5GW of gas-fired generation and replace it with 10GW of wind power. We joined the First Movers Coalition and announced a business development effort to work with its 65 members on hard-to-abate industrial sectors. On behalf of DFC, our Chief Executive Officer, Scott Nathan, signed a retainer letter to explore financing a first-of-its-kind green hydrogen facility in Egypt. This is a solution that can not only reduce greenhouse gas emissions, but also improve food security through an increased supply of green fertilizer.

DFC’s commitment to climate is making an impact. We are supporting clean energy and storage projects that will provide affordable, reliable energy to communities in need, helping the world’s most vulnerable communities adapt to climate change by conserving fragile ecosystems , providing technology and training to smallholder farmers , and developing affordable insurance tools to help protect against loss. We are more confident than ever that the business case for climate resilience, across a diversity of sectors, is compelling.

DFC’s ability to finance more climate resilience projects demonstrates our private sector partners’ ingenuity and innovation in the face of extremely challenging climate disruptions to supply chains, energy security, and basic water supplies. In Cambodia, DFC is supporting a business that is building water stations in rural areas to ensure homes have potable water despite extreme weather. In Mozambique, we are investing in a fish farm that is helping local fishers increase production and meet the country’s nutrition needs, despite ongoing drought conditions. In Mexico, Peru, and Colombia, DFC is providing a loan portfolio guaranty for Conservation International Foundation to conserve, restore, and sustainably manage critical ecosystems.

Still, funding gaps for adaptation and resilience continue to widen, as does the need for increased investment in these areas. That is why President Biden launched PREPARE , the President’s Emergency Plan for Adaptation and Resilience, last year at COP26 in Glasgow. PREPARE is a whole-of-government initiative to help developing countries manage the impacts of climate change. I am proud to report that we exceeded our own expectations in DFC’s early response to the President’s call to action: in FY22, we made more than $390 million in commitments that will advance the initiative’s goals and an additional $200 million in commitments for transactions that provide adaptation co-benefits.

Our efforts to address the climate crisis will continue to grow in Fiscal Year 2023, including through a major push to accelerate climate adaptation investment that requires private sector participation for success. We are interested in business proposals from small businesses that provide tools and solutions for developing countries to adapt to climate change. More information is available here .

My colleagues and I returned to D.C. clear-eyed about the work that must be done but energized by the tremendous consensus for commitment on display at COP27, and within the private sector, to tackling this crisis.?