Over in Sharm el-Sheikh in Egypt, the world has gathered to decide the climate future of the planet, and it’s the focus of Devex’s coverage this week. We take a look at the latest overseas development aid going to climate to find out who are the biggest funders and largest receivers of this money.
Thanks, Japan
This is a preview of Devex Money Matters
Sign up to this weekly newsletter and get the latest in development funding in your inbox every Monday.
The 27th United Nations Climate Change Conference, or COP 27, kicked off on Sunday. Climate finance will be at the top of the agenda. We broke down the numbers on climate-related official development assistance, or ODA, to see where funding is going. In 2020, climate-related aid jumped by nearly a third to $44 billion, the latest available data shows, with Japan almost doubling its commitment.
Overall, more than a third of the funding went directly to climate projects, while $28.9 billion, or 55%, went to activities that help achieve climate goals.
India was top of the list of recipient countries, with $5.1 billion.
Meanwhile, last week, Lou Del Bello, writing for Devex, dug into the details and found major problems with existing funding promises. Much of the cash is in loans, little is additional to ODA, and most of the increase in spending over the years is eaten up by inflation.
Climate spending: What does the data say about climate development funding? (Pro)
ICYMI: Is there as much climate finance as you've been told? (Pro)
+ Try out Devex Pro Funding today with a free five-day trial, and explore funding opportunities from over 850 sources in addition to our analysis and news content.
Keeping promises
Britain said that it will deliver on its pledge of providing £11.6 billion ($13.1 billion) in five years to international climate finance, an official tells my colleague William Worley.
There were concerns that International Development Minister Andrew Mitchell had a “blind spot on climate” and may not have protected the commitment from spending cuts.
Meanwhile, Prime Minister Rishi Sunak is now traveling to Egypt to attend COP 27, reversing his earlier decision to skip the gathering.
Read: UK claims it is still delivering £11.6B climate finance pledge
Backgrounder: Is the world keeping its COP 26 climate promises?
+ Catch up on all the latest news in the U.K. aid sector.
Funding activity
CABEI. $100M to improve road infrastructure in El Salvador.
EBRD. $15.1M (€15.5M) to support youth entrepreneurship in the western Balkans.
IDB. $150M to expand water and sanitation services for rural populations in Peru.
KOICA. $6M to boost agriculture and food security among refugees in Tanzania.
Swedish government. $2.3M to advance smallholder farming in Sudan.
Africa’s voice
UN Women is calling for African women to get a much larger share — as well as a bigger voice in discussions at COP 27.
With women receiving a small share of climate finance dollars, COP 27 must include discussions about how to get more funds into the hands of womens’ and girls’ rights organizations, according to Jemimah Njuki, chief of the economic empowerment section at UN Women.
“We have to make sure that financing goes to women,” she says.
Read: UN Women wants to give African women farmers a voice at COP 27
Context: African nations finalizing demands ahead of COP 27 (Pro)
Bureaucratic gridlock
Featured opportunity: Better connection
The Asian Development Bank lent $350 million to India and the funds will be used to better connect key economic areas in the western state of Maharashtra.
The funding will help link low-resource rural communities with off-farm opportunities and markets, improve access to health and social services, and improve agricultural value chains by reducing transport costs for small- and medium-sized enterprises.
The Horn of Africa nation of Somalia is in desperate need of substantial climate financing to better prepare its people to withstand weather extremes. But it's also one of the most ill-prepared to receive funds because of the mountains of bureaucracy built into climate financing mechanisms, my colleague Sara Jerving reports.
“To access any type of funding from the Bretton Woods Institutions, Global Environment Facility, Green Climate Fund and others is not for the fledgeling or the fainthearted,” Somali minister Adam Aw Hirsi tells Sara.
It’s a challenge facing many fragile countries — countries characterized by having low capacity to provide citizens with basic functions of the state.
Read: Climate finance is a catch-22 in fragile states (Pro)
Background reading: $100B climate finance commitment won't be met until 2023
+ Check out our Road to COP 27 series for more climate finance news.
Falling short
Philanthropic grants to mitigate the effects of climate change remain a tiny slice of what funders spend, new data shows.
Nonprofit ClimateWorks published a report recently that said philanthropic foundation funding for climate change mitigation more than tripled between 2015 and 2021, growing from $900 million to $3 billion, my colleague Stephanie Beasley reports.
Despite the gains, the overall needle didn’t budge as climate change mitigation funding remained less than 2% of global giving, which stood at $810 billion in 2021.
Climate philanthropy: Small gains, big hopes, but reality still bleak
Context: Poor nations lack funds to finance climate adaptation projects, says IMF
+ Track how business, philanthropy, and development finance leaders are tackling global challenges by signing up for Devex Invested — our free, must-read Tuesday newsletter.
Where you at?
Britain and Italy, historically two of the largest funders of the Global Fund to Fight AIDS, Tuberculosis and Malaria, have made no pledging announcements as of Oct. 31, my colleague Jenny Lei Ravelo reports.
In two weeks, the fund’s board will meet to decide how much total grants are to be made available to countries over the next three years, but unless some radical changes happen, they will do so without any cash from two of the biggest players.
Global Fund pledge: ‘It’s not too late to take action,’ NGOs urge UK
Background reading: Global Fund falls short of $18B target as UK, Italy delay pledges
Sign up to Money Matters for an inside look at the biggest stories in development funding.
About the author
Omar Mohammed
Omar Mohammed is a Foreign Aid Business Reporter based in New York. Prior to joining Devex, he was a Knight-Bagehot fellow in business and economics reporting at Columbia University Graduate School of Journalism. He has nearly a decade of experience as a journalist and he previously covered companies and the economies of East Africa for Reuters, Bloomberg, and Quartz.
