Seven middle-income countries including Brazil, Egypt, Mexico, Namibia, South Africa, Turkey and Uzbekistan have been chosen by multilateral lender the Climate Investment Funds, supported by the International Finance Corporation, African Development Bank, Asian Development Bank and others, to receive a $1 billion global climate fund to cut emissions from their industrial sectors, reported Reuters.
The selected countries, chosen from 26 applicants, will work with investors to create specific plans for how to decarbonise the sector. They will get low-cost loans. For every $1 from this fund, about $12 more is expected to come from private sector and development banks.
The industry programme enables up to 100% of financing to be directed to private sector-led projects. This is part of CIF's larger $9 billion Clean Technology Fund, which allows funding for private sector-led projects or those attracting significant private co-investments, with a minimum allocation of 50%.
"Decarbonising Industry is about more than emissions - it's about securing long term prosperity and the jobs of tomorrow," said CIF Chief Executive Tariye Gbadegesin in a statement.
"It's about producing the low-carbon industrial inputs that are urgently needed to expand renewable energy capacity and power the global economy," she added.
Founded in 2008 and with $12.5 billion in pledged support from countries, CIF provides early stage grants and highly concessional loans that can help attract funding from other investors with a lower risk tolerance.
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Brazil’s deputy secretary for sustainable development finance, Ivan Oliveira, told Financial Times that the programme offered an “opportunity to accelerate investment in clean technologies that are essential to Brazil’s economic future”.
Meanwhile, Brazil is targeting sectors such as cement, steel, chemicals, fertilisers, aluminium, pulp and paper, and glass.
The programme, as Oliveira believes, would “help demonstrate that climate action and industrial competitiveness can go hand in hand”.
