BMU makes 2020 climate investments of over 600 million euros in developing countries and emerging economies

28.05.2021 | The Federal Environment Ministry (BMU) investments in international climate projects reach a record high. In 2020, the BMU supported a total of 385 ongoing and new projects in developing countries and emerging economies with 601.2 million euros under the International Climate Initiative (IKI). In 2019, investments totalled 467 million euros and some 410 million in 2018. The necessary recovery after the pandemic will therefore be combined with ambitious climate action and biodiversity conservation.

Since the IKI was founded in 2008, the BMU has supported developing countries and emerging economies in climate change mitigation and adaptation measures, the restoration of forests and other ecosystems and biodiversity conservation. The IKI has approved funding of 4.5 billion euros for over 750 projects since it was launched. Of the 385 ongoing projects in 2020, 109 were newly approved, extended or topped up prior to the end of December 2020. The some 600 million euros were distributed across the four funding areas of the IKI as follows:

  • Projects aimed at reducing greenhouse gas emissions: 393 million euros
  • Projects to adapt to the impacts of climate change: 108 million euros
  • Projects to conserve natural carbon sinks and forests: 53 million euros
  • Projects to conserve biological diversity: 65 million euros. IKI projects seldom focus exclusively

on one funding area. Financial commitments to biodiversity from projects in other funding areas add up to an additional 73 million euros, thus the total funding for biodiversity for 2020 stands at almost 138 million euros (22 percent).

Over the past year, the IKI has focussed its funding on developing climate action and biodiversity conservation into immediate drivers that will set the pace for economic recovery and economic security. Over 400 million euros were tendered for the green recovery with the IKI Corona Response Package, the annual thematic selection procedure 2020 and the Ambition Initiative of the NAMA Facility (Nationally Appropriate Mitigation Action) for especially ambitious mitigation projects. This helps address the social and economic impacts of the pandemic. The funding goes towards supporting indigenous groups, conserving biological diversity, strengthening protected areas and buffer zones, and promoting sustainable urban development and the energy transition. In addition, financing is provided for economic advisors in eight countries.

Examples of important projects and funds in 2020

Scale up Finance Sector – 30 by 30 Zero (20 million euros): Financing ambitious climate action in emerging economies faces a number of hurdles, for instance, a limited understanding of climate finance products in banks and capital markets. The project works at political, market and financial market level and aims to increase the share of climate lending in the participating banks’ total credit portfolio to 30 percent by 2030.

Regeneration Initiative (10 million euros from the Corona Response Package): The initiative supports well-functioning deforestation-free supply chains for sustainably produced coffee and cocoa in Africa's tropical belt, which are at risk due to the impacts of the coronavirus crisis. This will help maintain income sources for forest-dependent communities that have committed to sustainable management.

Biodiversity Finance Initiative (BIOFIN II - topped up with 20 million euros from the IKI Corona Response Package): The initiative supports developing countries and emerging economies in dealing with the impacts of the COVID-19 pandemic on biodiversity through measures in the area of biodiversity financing and resource mobilisation. Reducing expenditure and subsidies that are harmful to biodiversity and integrating biodiversity into the finance sector play an important role here. BIOFIN also supports partner countries in efforts to give greater consideration to biodiversity and the climate in economic stimulus packages in response to the impacts of the pandemic.

Enabling Long Term Decarbonisation Pathways through PtX (20 million euros): The PtX Pathways project supports the development of sustainable hydrogen/PtX markets as a building block for the energy transition in Morocco, South Africa and Argentina. For instance, in Morocco a pilot plant for PtX (e-fuel) with direct air capture will demonstrate the full PtX value chain and pave the way for technology uptake and capacity development.

Clean, Affordable and Secure Energy for Southeast Asia (CASE) (approximately 19.5 million euros from the Corona Response Package): The project's partner countries (Indonesia, the Philippines, Thailand, Vietnam) are currently responsible for 80 percent of energy consumption in the rapidly growing region of Southeast Asia. The project therefore supports an energy transition in these countries and in Laos with ambitious climate goals. To this end, the project is developing a knowledge platform and also participating in the regional specialist dialogue and advising the governments on how green recovery can harmonise both economic recovery and an energy transition away from coal.

Ecosystem-based adaptation and forest restoration in vulnerable rural communities within the Caribbean Biological Corridor (approximately 19.8 million euros): The dream holiday destination the Caribbean and its valuable ecosystems are under severe threat from the impacts of climate change and human overuse. The project uses ecosystem-based adaptation (EbA) measures to increase the resilience and adaptability of the people and ecosystems in the partner countries. At the same time, the project improves the livelihoods of the rural populations and supports afforestation and soil improvement, adapted production techniques and the optimisation of value chains.

Support to indigenous peoples’ and community conserved areas and territories (ICCAs – an additional 15 million euros from the Corona Response Package): The project supports indigenous and local communities in 45 countries in preserving their traditional territories and protecting biodiversity. In addition, the project aims to ensure the resilience of these communities which are particularly vulnerable due to the pandemic.