Canada’s climate finance is fostering real changes in communities around the world. Its $2.65 billion investment over 2015-2021 highlights Canada’s dedication to ambitious climate action and reaching the goals of the Paris Agreement. Through its climate finance, Canada is driving real-life on-the-ground results that are changing the lives of millions of people in developing countries.
Increasing the resilience of the most vulnerable
Increasing support for adaptation, in particular for the poorest and most vulnerable countries, is a priority of Canada’s climate finance. Over 2015-2021, Canada has worked closely with least developed countries and small islands developing states to increase their resilience to the negative effects of climate change.
With the help of Canada’s $37.5 million contribution, the Least Developed Countries Fund is strengthening the national climate information services network in targeted countries. In Malawi, new weather stations are delivering more precise information to farmers, helping them better prepare their crops for increased temperatures, weather variability, and more frequent extreme weather events. Weather forecasting helps these farmers make more informed day-to-day decisions related to crop irrigation and fertilizer timing, which benefits more than 5 million people in the region.
Clean Energy Transition
Canada supports developing countries in reducing 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 installation of floating solar panels over the expansive reservoirs of Viet Nam’s Da Mi hydropower plant.
In addition to supplying clean electricity to the national grid, the floating solar plant will help reduce pressure on the hydropower plant during the dry season by ensuring continuity of supply. The 47.5MWp floating solar plant is now the first large-scale floating solar project in Southeast Asia, and is expected to avoid 34,320 tons of carbon dioxide equivalent emission annually, which is equivalent to taking 7,464 passenger cars off roads for one year. Canadian funds contributed to leveraging an additional US$47 million in co-financing from various actors, including private sector entities.
Support for Gender Equality and Inclusive Climate Action
In Honduras, through the Empowerment of Women for Climate Action, Canada is providing over $5.3 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 create sustainable businesses that energize local communities facing deforestation. In addition to benefiting 60 women and youth organizations, the project will contribute to lifting 2,000 families out of poverty by building and enhancing their technical, productive and entrepreneurial capacities.
Better Access to Climate Finance
While international finance for climate action is ramping up, developing countries continue to face barriers to access the funding for climate action. Least developed countries and small islands developing states and other vulnerable countries have repeatedly singled out this issue at international forums, including the UNFCCC.
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 securing climate finance for mitigation and adaptation investments.
Through CFAN, developing countries can receive the help of expert advisors to build in-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 SIDS in the Pacific region.
The project will improve efficiency and coordination of the implementation of climate finance initiatives, expand climate adaptation and mitigation projects, and improve the integration of gender considerations into climate finance project proposals in developing countries, including Pacific SIDS.
Mobilizing private sector investment for climate action
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.
From Canada’s $223.5 million contribution to the Canadian Climate Fund for the Private Sector in the Americas- Phase II, US $12.5 million supports Nicaragua’s sugar industry transition to more efficient and sustainable irrigation systems. Representing one of the main industries in Nicaragua with more than 7% 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 $25 million in financing for this project.
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