Climate Finance News - January 2
Climate impact on insurance & reinsurance; BNP Paribas' sustainability linked financing; EBRD funds wastewater treatment in Jordan, district heating in Serbia;
Howden's 2024 Reinsurance Market Review: Climate Change Impacts
(January 01)
The report highlights the impact of climate change on the insurance market, noting that every year since 2020 has seen annual insured costs exceed $100 billion*.
2024 was another ‘top ten’ natural catastrophe loss year for the insurance market, featuring severe convective storms, major international flooding events and an impactful hurricane season that brought five US hurricane landfalls. Similarly to 2023, the bulk of the losses were retained by insurers, although reinsurers absorbed a portion of the burden for events that had sizeable impacts (e.g. Europe, Middle East, Canada, Caribbean, Florida).
Since 2020, total losses from non-peak (severe convective storms, floods, wildfires, winter (freeze) storms, others) events have been exceeding those from peak (tropical cyclones, earthquakes, European windstorms) events. Severe convective storms, which accounted for a significant portion of the increase in insured natural catastrophe losses from 2014-18 to 2019-23.
Also interesting
Claims from [Hurricane] Milton were triggered across a variety of classes of business, property most extensively (even if the storm’s late shift south reduced commercial losses due to less exposure around the landfall area) but also aviation, marine, energy and motor.
Whilst a sizeable portion of losses from Milton was ceded to the reinsurance market, claims elsewhere in the United States were mostly retained by primary carriers. Large natural catastrophe losses in Canada, Europe, Brazil, the Middle East, Caribbean and Asia also had a meaningful impact on local markets.
* also see Gallagher Re’s Natural Catastrophe and Climate Report 2023
BNP Paribas' ISLF+ Contracts for Just Transition
(January 02)
Over a year ago, BNP Paribas launched Inclusive Sustainability-Linked Financing (ISLF+) contracts, a sustainable and inclusive financing mechanism, to support the just transition and empower vulnerable people. Two new contracts in 2024 include a €20 million loan to al Amana Microfinance in Morocco to expand sustainable development of microenterprises and an ISLF+ contract with Mûre in France to refinance farms and encourage sustainable practices. Three initial contracts were signed in 2023 with microfinance institutions in France, Italy, and Brazil.
India boosts farmer support with subsidies and insurance funding
(January 01)
The Indian government approved additional subsidies on Diammonium Phosphate (DAP) to ensure affordable rates for farmers, despite rising international prices. It also approved ₹69,515.71 crore for the continuation of the ‘PM Fasal Bima Yojana’ and ₹824.77 crore for the Fund for Innovation and Technology (FIAT). These actions aim to support the farming community and protect farmers from crop losses.
Brazil's BRICS Presidency Prioritizes Climate Finance
(January 01)
Brazil, during its 2025 presidency of the BRICS group, prioritized enhancing financing structures to combat climate change, aligning with the COP 30 agenda. This involves facilitating trade and investment among member countries and promoting inclusive AI governance for development. Over 100 meetings are planned for 2025 to discuss these priorities.
India Extends Crop Insurance Schemes, Funds Agri-Tech
(January 01)
India's Union Cabinet approved the continuation of Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather Based Crop Insurance Scheme (RWBCIS) until 2025-26, with a total outlay of Rs. 69,515.71 Crore. Additionally, a Fund for Innovation and Technology (FIAT) with Rs. 824.77 Crore was approved to support technological initiatives like YES-TECH (using remote sensing for yield estimation) and WINDS (establishing weather stations and rain gauges).
IREDA's 2025 Vision: Expanding Renewable Energy Financing in India
(January 01)
India's IREDA, under the Ministry of New and Renewable Energy, reported significant growth in renewable energy financing, reaching ₹31,087 crore in Q3 2024. IREDA is expanding into green hydrogen, renewable equipment manufacturing, and retail renewable energy sectors through subsidiaries. The agency also achieved Navratna status and a BBB-(Stable) rating from S&P Global.
UK Space Agency Funds Climate-Focused Space Technologies
(December 30)
The UK Space Agency's National Space Innovation Programme (NSIP) has funded two projects that use space technology to address climate change. SatVu, a UK SME, received £5.9 million to develop a satellite-based system for detecting heat loss, which will help the UK reach its Net Zero ambitions. Northumbria University received £4.98 million to develop a laser-based communication system for small satellites, improving data transmission capacity and security for future mega-constellations.
Awqaf Capital: Sustainable finance initiative in Abu Dhabi
(December 28)
Awqaf Abu Dhabi, established in 2023 under the leadership of UAE President His Highness Sheikh Mohamed bin Zayed Al Nahyan, launched Awqaf Capital, a strategic initiative to manage endowments and institutional investments. This initiative aims to strengthen Abu Dhabi's position as a global investment hub and will deploy capital across diverse asset classes, focusing on sustainable impact and aligning with the emirate's vision for economic prosperity and environmental sustainability. The initiative was announced by His Excellency Fahad Abdul Qader Al Qassim at the Abu Dhabi Finance Week.
Brazil launches R$6.5B fund for climate resilience infrastructure
(December 27)
Brazil has created a R$6.5 billion fund to support the requalification and recovery of infrastructure damaged by extreme climate events. The fund will be used for projects in several municipalities of Rio Grande do Sul, focusing on flood protection systems, dike interventions, and other water management projects. The plan's execution is scheduled until December 15, 2031, with the possibility of extension.
EBRD invests in Jordan's wastewater infrastructure
(December 27)
The European Bank for Reconstruction and Development (EBRD) provided US$ 30 million in sovereign financing to the Water Authority of Jordan (WAJ) to improve wastewater services for about 200,000 inhabitants of West Irbid, Jordan. This investment will complete the construction of a wastewater network, delivering first-time wastewater services and contributing to the national target of 80 percent network coverage by 2030. The new network will mitigate environmental and health risks and reduce greenhouse gas emissions by replacing current disposal practices.
EBRD funds Serbia's Novi Sad solar-thermal plant for decarbonization
(December 27)
Serbia has received a €105 million loan from the European Bank for Reconstruction and Development (EBRD) to decarbonize district heating in Novi Sad. The project, co-financed by a €21 million EU grant and €3 million in project implementation assistance, involves constructing a large-scale solar-thermal plant with 38,600 m² of solar collectors, an 850,000 m³ heat storage system, a 17 MW heat pump, and a 60 MW electric boiler. This will reduce natural gas consumption by 29 percent and deliver clean renewable heat energy.
EBRD backs Türkiye’s Polat Enerji’s renewable energy push
(December 27)
The European Bank for Reconstruction and Development (EBRD) provided a US$65 million loan to Türkiye’s Polat Enerji to finance a 77 megawatt (MW) hybrid solar and wind power facility. A US$5 million concessional loan from the Clean Technology Fund brings the total to US$70 million, funding a 10.0 MWh battery storage project. This is Türkiye’s first battery storage initiative combining wind, solar, and battery storage in one location.
EBRD backs Africa’s largest onshore wind project
(December 23)
The European Bank for Reconstruction and Development (EBRD) arranged a US$ 275 million syndicated loan for the construction and operation of the largest wind farm in Africa, located in Egypt. The 1.1 GW wind farm is expected to reduce annual CO2 emissions by more than 2.2 million tonnes and is co-financed by several institutions including the AfDB, BII, DEG, OPEC Fund, and APICORP. The project is part of Egypt’s Nexus of Water, Food & Energy (NWFE) programme and contributes to the country’s renewable energy targets.
US Army Funds Bio-Based Insulation Development
(December 05)
US-based Sativa Building Systems has secured a $1.9 million contract from the U.S. Army to develop bio-based insulation. This two-year project will create lighter, more versatile insulation products using hemp, aligning with the Department of Defense’s sustainability goals. The project aims to deliver functional prototypes and complete a demonstration project by September 2026.
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