European Development Finance Institutions Announce Joint Ambitions for Climate Action
EDFI group outlines shared commitments to phase out fossil fuels and mobilise private sector climate finance, aligning with Paris Agreement and high disclosure standards.
The Association of European Development Finance Institutions (EDFI), which has a combined $50 billion under management in emerging and frontier markets, has announced that its 15 publicly-owned member institutions will align all new financing decisions with the objectives of the Paris Agreement by 2022 and will ensure that their portfolios achieve net zero emissions by 2050 at the latest.
EDFI member institutions will immediately cease new coal or fuel oil financing and will limit other fossil fuels, such as selective investments in gas-fired power generation, to financing consistent with the objectives of the Paris Agreement until generally excluding them by 2030 at the latest. The new commitment includes direct investments, indirect investments made through investment funds and dedicated lending via financial institutions.
As taxpayer funded organisations, we are committed to promoting green growth, climate adaptation and resilience, nature-based solutions, access to green energy and a just transition to a low-carbon economy.
Søren Peter Andreasen, CEO of EDFI
EDFI member institutions are determined to build on their strong track-record in climate finance and mobilise private sector climate finance by holding themselves to ambitious individual targets and reporting on their progress, while also delivering on their core development missions.
In its statement today, EDFI said: “A significant and progressive alignment of private capital flows to developing countries will be required to reach the UN Sustainable Development Goals by 2030 and to implement the Paris Agreement. Over the past five years, the European DFIs have committed €8 billion to climate finance in low and middle-income countries. Now, in the lead-up to COP 26, and as countries around the world strive to achieve a sustainable recovery from the Covid-19 pandemic, it is more important than ever that European DFIs set a collective example for investors in developing markets.”
Søren Peter Andreasen, CEO of EDFI, said: “As taxpayer funded organisations, we are committed to promoting green growth, climate adaptation and resilience, nature-based solutions, access to green energy and a just transition to a low-carbon economy. Today’s announcement underlines that commitment. DFIs are diverse institutions that will follow different paths and use their best efforts to implement these commitments, with some institutions going even further in certain areas and others needing more time for implementation. By working together on these joint ambitions, European DFIs will take full account of their effects on the planet without compromising on their development impact.”
EDFI members will also make climate-related financial disclosures in
line with the recommendations of the Task Force on Climate-related
Financial Disclosures (“TCFD”).
EDFI is the Association of 15 bilateral European development finance institutions that invest in the private sector in emerging and frontier markets to create jobs, boost growth, and fight poverty and climate change. Since EDFI was set up in 1992, its member institutions have financed app. 15,000 projects, and they now manage a combined investment portfolio of EUR 46 billion across financial services, clean energy, industry and many other sectors in more than 100 countries. EDFI’s member institutions include BIO (Belgium), BMI-SBI (Belgium). CDC Group (UK). COFIDES (Spain), KfW-DEG (Germany), Finnfund (Finland), FMO (Netherlands), IFU (Denmark), Norfund (Norway), OeEB (Austria), Proparco (France), SIFEM (Switzerland), Simest (Italy), SOFID (Portugal), and Swedfund (Sweden).
CDC Group, Norfund, Finnfund, FinDev Canada and BIO jointly commit $82 million to Phatisa’s second food fund, a Sub-Saharan African fund aiming to create over 2,000 jobs in food and agriculture and to increase agricultural output by 3m tonnes.
An interview with Luuk Zonneveld, An-Heleen De Greef & Eric Van
Den Bossche on the SDG Frontier Fund, published in Eventail on the 10th of December, written by Cédric Boitte. This article was published in French.
In July it was announced that Feronia was facing bankruptcy and was to undergo a financial restructuring in order to secure the long-term future of PHC, its palm oil business located in the Democratic Republic of the Congo. On November 23rd, 2020, the formal restructuring agreement between the company and its lenders was signed.