Towards COP27: Arab Regional Forum on Climate Finance

During the High-Level discussion, panelists conversed the increasing inflationary and debt pressures faced by developing countries. Arab countries are amongst the lowest contributors to climate change, yet their financing needs are substantial. Climate finance in the region is mainly available through loans which further limits the fiscal space and drives up developing countries’ government debt burdens, hence there is a need to increase the share of grants for climate finance. It was also mentioned that there is a crucial need for capacity building for the localization of financing through setting up legal and regulatory frameworks, conducting feasibly studies and implementing certification for green businesses. It was also stated that accessing climate finance represents a unique opportunity to reach economic stability and to ensure that no one is left behind.

During the first roundtable discussion, countries presented their adaptation projects for climate financing. Egypt is aspiring to serve as a green hub for the Arab region and has established the NWFE نُوَفِّي platform for Investable Projects supporting efforts towards COP27. Lebanon national priority areas focused on Forest protection from fire and resource degradation. Projects by Algeria emphasized natural ecosystem preservation and restoration. Iraq priorities revolve around improving irrigation efficiency for improved resilience in the agricultural sector. Jordan’s priority projects focused on efficient food production through hydroponics and energy efficient water conveyance and treatment systems. Oman’s priority projects seek to enhance flood protection through dam construction. Tunisia’s projects considered the interlinkages between the water, food and energy sectors.

Commentators from the Islamic Development Bank, The World Bank, HSBC and the NDC Partnership shared their insights regarding the projects presented and reiterated the need to align proposals with country’s National Determined Contributions (NDCs), national development plans, and the Paris Agreement. While the climate value in presented projects is obvious, further emphasis needs to highlight the development value and environmental impacts of the projects.  

During this second Roundtable discussion, mitigation projects were presented with Egypt focusing on energy efficient cooling in buildings and bus rapid transit. Algeria’s priority was flared gas recovery while Jordan focused on blue economy for livelihoods through renewable energy and energy efficiency and Tunisia on smart transport. Experts from the European Bank for Reconstruction and Development (EBRD), Standard Chartered Bank, Islamic Development Bank and Deutsche Bank provided their comments and highlighted the importance of transitioning towards green cities with a focus on eMobility. It was also suggested to adjust the financing structure and regulation of these projects to make them more bankable.

During the first part of the session, national initiatives on climate adaptation from Egypt, Oman, and Tunisia were presented. The points highlighted during the discussions included the need to include vulnerable groups in adaptation initiatives to create greener job opportunities for youth and the need to ensure that adaptation initiatives have a positive impact on livelihoods. The second part of the session consisted of a national consultation on the “Climate-Proof Watershed Management Design and Resilience Package” developed for El Kalb and Al Kabir watersheds in Lebanon through a collaboration between FAO and ESCWA on “Increasing Watershed Resilience to Climate Change in Lebanon” under the NENA-WEPS FAO SIDA funded project. Proposed interventions under these packages were presented and the important role of these adaptation measures to increase resilience of the watersheds to climate change and the need for collaboration and coordination across sectors when implementing such interventions to ensure synergy were also discussed.

The fourth Roundtable featured four regional climate Initiatives that are being advanced by Arab States and regional partnerships. The Climate/SDGs Debt Swap-Donor Nexus Initiative supports access to finance for countries facing high debt burdens. The Regional Initiative to Promote Small-Scale Renewable Energy Applications in Rural Areas of the Arab Region (REGEND) showcased opportunities for scaling up successfully deployed small scale energy solutions targeting women in the region. The Mashreq Waters Knowledge Initiative demonstrated opportunities for fostering dialogue on common water and climate challenges based on a shared knowledge base, which is being strengthened by the World Bank and ESCWA.  The UNFCCC and LAS provided insights on the Arab States Climate Finance Access and Mobilization Strategy (2022-2030) that will strengthen regional and national capacity for mobilizing climate finance on priority issues subsequent to its approval by the Arab Council of Arab Minsters Responsible for the Environment (CAMRE).  Commentators provided insights on how the Arab Fund for Economic and Social Development along with Arab multilateral development banks are actively engaged in supporting climate finance projects in the region.  The experience of the United Nations Capital Development Fund for financing climate projects at the local level was also shared and demonstrated that the UN System is also engaged in delivering on climate finance to advance climate action.