Climate Finance News - December 6
Australia’s new framework for energy investment; First SAF facility in Pakistan; Madagascar's first sustainability bond; Financing water security
In this newsletter
Australia’s new framework for energy investment
First sustainable aviation fuel facility in Pakistan
Madagascar’s first sustainability bond
Financing water security
News from Governments
Advocating for Fusion energy
More reading & reports
Australia’s new framework for energy investment
Australia has published the First Nations Clean Energy Strategy, a 5 year framework to ‘guide invesment and influence policy’ for the clean energy transition. It has 3 goals
remove barriers to clean energy access for First Nations communities and understand how they use clean energy
ensure communication and coordination between industry/governments and communities
help First Nations people secure clean energy jobs and enable their ownership in clean energy projects
The welfare and participation of communities is also a crucial requirement for carbon projects to be included in the centralised UN carbon market under Article 6.4, the rules for which were finalised at COP29.
Australia - First Nations Clean Energy Strategy, December 2024 (PDF)
First Sustainable Aviation Fuel facility in Pakistan
Pakistan’s first commercial-scale Sustainable Aviation Fuel facility will receive upto $86.2 million from Asian Development Bank (ADB) and upto $35 million from the International Finance Corporation (IFC) in equity and debt financing. SAFCO Ventures is building the 200,000 tons-per-annum facility in Sheikhupura, Punjab which will convert 250,000 tons of oils annually into SAF. It has already secured an offtake agreement for 145,000 tons of SAF annually from Shell.
(In other e-fuel news, Swedish e-fuel developer LiquidWind will collaborate with Samsung E&A to develop synthetic fuel facilities in Asia, Africa and the Middle East.)
Madagascar’s Sustainability Bond
Société Générale Madagascar (SGM) has issued the country's first Sustainability Bond equivalent to USD 38 million with support from the Dutch Fund for Climate and Development (DFCD). The three-year maturity bond, backed by anchor investors including IFC, FMO, and Proparco, will finance renewable energy projects, SMEs, and Microfinance initiatives. DFCD will provide a grant of EUR 167,000 to strengthen and derisk the deal. WWF NL
Financing Water Security
Major Multilateral Development Banks have announced a joint commitment to significantly increase water sector financing and technical assistance for 2025-2030. The banks (including African Development Bank, Asian Development Bank, AIIB, EBRD, EIB, IDB, IsDB, NDB, and World Bank) have already provided $50 billion in water sector lending over the past five years. The new commitment focuses on climate-resilient water systems, particularly in water-stressed regions, and aims to accelerate universal access to safe drinking water and sanitation.
News from Governments
The European Commission and European Investment Bank (EIB) have announced a new partnership to support EU's battery manufacturing sector. The initiative includes a €200 million top-up from the EU Innovation Fund to InvestEU programme, €1 billion in grants for EV battery cell manufacturing, and an additional €1.8 billion EIB investment in the battery value chain. The total public support amounts to €3 billion for the European battery industry.
The UK government has outlined its commitment to nuclear power as a key component of its clean energy strategy. The government has
confirmed £2.7 billion funding to continue Sizewell C development,
and announced contract negotiations for Small Modular Reactor (SMR) competition with four shortlisted companies
EDF recently announced the extension of four nuclear power stations in the UK (Heysham 1, Hartlepool, Heysham 2, and Torness) to operate until 2027-2030.
UK’s Chancellor of the Exchequer has published a letter to Bank of England Governor Andrew Bailey outlining the Financial Policy Committee's remit for 2024/25. The recommendations include addressing climate risks as a key priority for maintaining financial stability.
The Committee should consider how these [climate] risks could impact financial stability over the near and longer-term, including, where appropriate, through its stress testing frameworks, ensuring that risks stemming from possible and severe global climate scenarios are reflected in its analysis on climate risks and that sufficient time horizons are considered.
Over the next year, the Committee should continue to consider the materiality of nature-related financial risks for its primary objective.
Here’s Bank of England’s latest Financial Stability Report - climate risk discussed starting page 29.
The UK has closed a £60 million finance deal through UK Export Finance (UKEF) and Standard Chartered to support Cameroon's agricultural development. British exporter Incatuk Limited will improve 15,000 hectares of grassland, establish agricultural facilities, and enhance soil quality. The deal was announced during the West and Central Africa Trade and Investment Forum in London.
The UK government has announced £80 million in funding for 100 research projects across 39 institutes, including initiatives in clean energy and energy storage. The University of Bristol will research polyelectrolyte gels for various applications including water purification and energy storage.
The Australian government has announced an AUD 50 million commitment to help households install solar & battery storage systems, and upgrade to energy efficient appliances. The Household Energy Upgrades fund is managed by the Clean Energy Finance Corporation, and works with banks & lenders to provide discounted green finance to homes.
New Zealand government has announced up to $3 million funding from the Regional Infrastructure Fund for the Tukituki Water Security Project in Hawke's Bay. The project aims to investigate technical, environmental, and commercial viability of water storage and distribution network on Makaroro River to address climate change-induced water security challenges. Additionally, a $18 million Foodeast-Haumako innovation hub has been opened to support the region's food and beverage industry.
More News
The Global Environment Facility (GEF) has selected seven projects as winners of its first Innovation Window, providing $12.3 million in grants to test and pilot new environmental solutions. The winning projects include initiatives focusing on food systems transformation, protecting jaguar habitats, nature-positive finance frameworks, and collaborative approaches to environmental challenges.
Advocating for Fusion Energy
Clean Air Task Force (CATF) has launched a comprehensive fusion energy initiative to advance the commercialization of fusion technology globally. The organization is undertaking market studies, technology readiness assessments, and regulatory analysis while working to establish a global fusion industry with proper regulations. The initiative aims to support increases in technology readiness levels (TRLs), advance commercial demonstrations, and develop appropriate fusion energy policy frameworks.
Reports & Further Reading
(December 2) The UN has published Economics of Drought report making a business case for nature-based solutions to droughts.
Global conservation organization WWF has released its paper Network Position on Carbon Finance, outlining five key approaches to maximize carbon finance impact. The position paper emphasizes market transformation, investments beyond value chains, higher integrity market solutions, nature-based solutions, and deployment of diverse financial mechanisms to address the climate crisis.
The WWF approach aligns with organizations like Oxford net zero, Carbon Market Watch, ClimatePartner Impact, Climate Impact Partners, and Gold Standard on how companies should approach climate responsibility.
Loss and Damage Fund - Concept Note and Daily Policy Updates for the 4th Meeting (Google Doc)
