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KZN Pre-COP17 Summit
Inkosi Albert Luthuli ICC, Durban
26 September 2011
KZN Pre-COP17 Summit – Climate Change Finance
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Financing Climate Change Mitigation and
Adaptation Measures
Alex McNamara
Principal Consultant
Camco South Africa
Climate Change Finance in Context
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Climate Change Finance in Context
• Adequate finance is critical for any low carbon development path
• Funding is also key to supporting community livelihoods and
adaptation efforts
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Climate Change Finance in Context
• To be effective, funding flows need to be:
1. Robust and transparent
2. Support local economic development
3. Ensure ownership by involved parties
4. Encourage additional finance and investment where possible
5. Be matched by an enabling regulatory framework
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Current Types of Funding Available
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Types of Funding Available (Global)
• The term ‘climate finance’ can be defined very broadly, and is a fluid
concept at present
• Globally, typical types of climate finance at present include:
• Carbon credits developed and sold under the CDM
• Carbon credits developed for sale under the voluntary carbon market
• Grants and soft loans provided by donors and multilateral institutions
(e.g. the World Bank)
• ‘Fast Start’ funding pledges that are slowly being implemented, as
agreed under the Cancun Agreements (COP16)
• Limited support to developing country adaptation plans, including
through the Adaptation Fund
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Types of Funding Available (Local)
• In addition, South Africa specific funding sources are in place that are
‘climate finance’ related:
• National Treasury – Incentive for Investing in Energy Efficient Equipment
• National Treasury – Neighbourhood Development Partnership Grant
• SANERI and NRF research grants
• Eskom Standard Offer and Standard Product Offerings
• Eskom Solar Water Heating Programme
• Department of Energy: Renewable Energy Finance and Subsidy Office
(REFSO) – Subsidy for Renewable Energy Technology
Both global and local funding types are available to South Africa
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Typical Funding Areas
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Typical Funding Areas – Mitigation
Mitigation efforts related to:
Biomass
Forestry and REDD+
Biogas / waste to energy
Biofuels
Rural electrification
Distributed & off-grid power
generation
Solar
Energy storage &
conservation
Wind
Energy efficiency
Geothermal
Tidal / ocean
Hydropower
Cleaner transport
Other industrial emission
reductions
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Typical Funding Areas – Adaptation
Adaptation efforts related to:
Water security /
integrated water resource
management
Agricultural development /
food security
Flood and drought protection
Coastal protection /
managing coastal areas
Resilient infrastructure
Early warning systems
Ecosystem based adaptation
Sustainable land
management
Disaster risk management
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Examples of Projects Financed
in South Africa
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CDM Example
• Tugela Mill Fuel Switching Project:
 Fuel switch from coal to biomass (bark) at boiler in
Tugela Paper Mill
 Location: Mandini, KZN
 Project developer: Sappi
 Forecast emission reductions: 51,962 tCO2e/year
Source:
http://cdm.unfccc.int/about/multimedia/stories/i
ndex.html
 Actual emission reduction over initial monitoring period:
22,661 tCO2e/year
• South Africa now has 19 registered CDM projects,
and Africa has 66 in total
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International Donor Example
• University of KZN Biogas Pilot Plant:
 Project type: pilot project
 Biogas pilot plant using chicken litter or similar farm waste to produce
methane gas for heating, cooking and transportation
 Approx. 25 jobs to be created
 Supported under the: ‘Energy and Environment Partnership for Southern
and East Africa’ (http://www.eepafrica.org/)
 Programme funded by the Government of Finland and Austrian
Development Agency
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Potential Future
Funding Sources
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Potential Future Funding Sources
• Existing carbon markets
• Scaled up ‘Fast Start’ finance
• Green Climate Fund
• Nationally Appropriate Mitigation Actions (NAMAs) / Sectoral
Mechanisms / Bilateral Agreements
• Other international partnerships on priority regional projects
• Greater emphasis on the Adaptation Fund:
• SANBI recently accredited by Adaptation Fund Board (AFB), and will be able to put
forward project proposals
• Next AFB meeting to take place in Durban from 12-14 December 2011; civil society
dialogue also planned for 11 December 2011
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Key Challenges
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Key Challenges
• South Africa has taken only very limited advantage of the CDM, and
• The clock is ticking fast on registering conventional CDM projects in
South Africa
• SA has also yet to submit a project concept to the Adaptation Fund
• Much of the new climate finance architecture is still being set up (e.g.
for Fast Start and the Green Climate Fund) and will take time to
implement
• Therefore, considerable uncertainty regarding how much will be
leveraged, by when, and how funds will be disbursed
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Alex McNamara
Camco South Africa
T: +27 (0)11 253 3400
M: +27 (0)79 699 3284
E: [email protected]
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