Canada’s international climate finance brings real changes to communities around the world. In June 2021, Canada announced a doubling of its international climate finance to $5.3 billion over the next five years for developing countries. This ambitious commitment builds on our previous $2.65 billion investments over the past five years, highlighting Canada’s dedication to ambitious climate action and reaching the goals of the Paris Agreement. Through our climate finance, Canada is driving real-life on-the-ground results that are changing the lives of millions of people in developing countries.
Increasing support for adaptation
Increasing support for adaptation, in particular for the poorest and most vulnerable countries, is a priority of Canada’s climate finance.
Over the past five years, Canada has worked closely with Least Developed Countries (LDCs) and Small Island Developing States (SIDS) to increase their resilience to the impacts of climate change. For example, Canada provided $37.5 million to the Least Developed Countries Fund (LDCF).
One of the roles of the LDCF is to assist countries in strengthening their national climate information services network. For example, in Malawi, new weather stations are helping to deliver precise information to farmers, helping them build resilience against the impacts of climate change, like increased temperatures, weather variability, and more frequent extreme weather events. Weather forecasting helps these farmers make more informed day-to-day decisions like crop irrigation and fertilizer timing, which benefit more than five million people in the region.
Better access to finance
While international finance for climate action is ramping up, developing countries are facing barriers to access funding available to them. With different types of funds delivered through various partners, robust local technical capacity is required to secure investments.
Since 2018, Canada has been leading work on this issue through its partnership with a leading climate innovator, the Rocky Mountain Institute (RMI).
Canada has been instrumental in supporting RMI’s creation of the Climate Finance Access Network (CFAN) initiative to empower developing countries in securingclimate finance for mitigation and adaptation investments. Through CFAN, developing countries can receive the help of expertadvisors to buildin-country capacity to ensure better access to available climate finance. In 2020, Canada provided $9.5 million to support the deployment of CFAN in some of the most climate-vulnerable countries, notably Pacific Small Island Development States (SIDS). The project will improve efficiency and coordination of the implementation of climate finance initiatives, expand climate adaptation and mitigation projects, and improve theintegration of gender considerations into climate finance project proposals in developing countries, including Pacific SIDS.
Clean energy transition
Canada supports developing countries in reducing their greenhouse gas (GHG) emissions and encourages low carbon and sustainable growth.
Canada invested US $15 million through its $200 million contribution to the Canadian Climate Fund for the Private Sector in Asia (Phase II) at the Asian Development Bank, to support the construction of a 47.5 megawatt peak (MWp) floating solar power facility in Vietnam. This project will be the first private sector, internationally financed, utility scale solar power project in Vietnam, and will be the first floating solar installation in the country. The floating solar power facility will help respond to the rapidly growing demand for electricity in Vietnam through the use of clean and renewable energy. This project avoids 30,302 metric tons of GHG emissionsannually and leverages $36 million in additional investments from other public and private sources.
Mobilizing private sector investment for climate action
Canada remains committed to meet the global $100 billion mobilization goal, agreed to in 2009 and reaffirmed through the Paris Agreement, to support climate action in developing countries. However, more has to be done to secure a sustainable future for all. Public finance alone will not meet the level of investment needed to address climate change. Resources must come from all actors and sources. The private sector needs to play a key role in reaching the investment levels required to address climate change and help build low-carbon and climate-resilient communities. Donor countries can encourage private investment for climate action in developing countries by investing their climate finance in innovative ways.
That is what Canada has been doing. For example, through our $223.50M contribution to the Canadian Climate Fund for the Private Sector in the Americas- Phase II, Canada invested US $12.5M to support Nicaragua’s sugar industry transition to more efficient and sustainable irrigation systems. Representing one of the main industries in Nicaragua with more than 7 per cent of the country's total exports, sugar generates more than 35,000 direct jobs and 135,000 indirect jobs, especially in rural areas. Canada’s contribution to the project helped reduce consumption in water, energy, and fertilizers used in 3,500 hectares of sugarcane fields and ensured the construction of an 800,000 cubic-meter reservoir to store rainwater for the dry months of the year. Canada’s contribution helped to mobilize an additional US $25M in financing for this project.
Support for inclusive climate action
Women’s experience, knowledge and leadership are essential to addressing the impacts of climate change. This is why women’s empowerment in developing countries is key for successful climate action.
In Honduras, Canada is providing over $6 million to safeguard forests under the leadership of women and rural and indigenous youth from 12 municipalities in the Western region of the country, in the districts of Lempira and Santa Bárbara. Over 23,000 hectares of forests are lost to deforestation every year in the country. At the same time, Honduras ranks as one of the countries most affected by climate change, due to deforestation and forest degradation.
This project seeks to strengthen forest governance, with equal participation of women and youth, and increase their access to resources to createsustainable enterprisesthat energize local communities facing deforestation. In addition to benefiting 60 womenand youth organizations, the project will contribute to reduce poverty of 2,000 families by building and enhancing their technical, productive and entrepreneurial capacities.
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