Baku: At the recent COP29 summit, a significant decision was made to increase climate finance for developing countries to at least $300 billion annually by 2035, with efforts to scale up financing from all sources to $1.3 trillion. In an exclusive interview, the CEO of the World Climate Foundation discussed mechanisms that could translate these financial targets into real investments and concrete climate action.
According to Azeri-Press News Agency, the CEO emphasized that while the $300 billion target is a big step up from the $100 billion discussed since COP15 in 2009, it is still not sufficient. He highlighted the importance of leveraging ‘catalytic capital’, a mechanism where public finance or philanthropic capital is used to stimulate additional investments. This approach has been successful in increasing financing by up to six times in some cases. The CEO stressed the significance of blended finance, which combines different sources of capital to make projects more attractive to private investors, noting that a large share of global investment opportunities is concentrated in the private sector.
The CEO also pointed out the opportunities created by the climate finance decision adopted at COP29 to accelerate the transition and how the private sector can play a more active role. He cited the implementation of a platform called IMCA, where $500 million has been allocated by the Nordic countries’ governments and philanthropic organizations. This public finance is used to create risk-reduction mechanisms, which are then tendered out to private investors, allowing them to bid on these projects. This approach has proven successful in engaging private sector participation.
While discussing specific projects related to Azerbaijan, the CEO mentioned that no specific joint projects have been established yet. However, there is notable international interest in Azerbaijan, particularly in the Trans-Caspian Green Energy Corridor, which stretches across Central Asia. This issue is expected to receive considerable attention at the next COP scheduled to be held in Trkiye.