Climate finance doubled four years ahead of deadline

‘I am very pleased that climate-related aid provided by Norway has helped to unlock substantial investments from other sources. If we are to have a chance of achieving the target of limiting global warming to 1.5 degrees, we need to mobilise investments from the private sector. These figures show that our aid is helping to do just that. The Climate Investment Fund is a key tool for Norway in this context,’ said Minister of International Development Anne Beathe Tvinnereim.

At the UN Climate Change Conference (COP26) in Glasgow in 2021, Norway pledged to double its annual climate finance from NOK 7 billion in 2020 to NOK 14 billion by the end of 2026. This target is part of the broader commitment made by wealthy countries to mobilise USD 100 billion in climate finance annually from 2020.

- Our climate financing is crucial for developing countries to be able to adapt to the negative consequences of climate change and achieve sustainable economic development with low emissions. The figures from 2022 emphasize the importance of cooperation between the private and public sectors so that developing countries can join the innovation and progress that is now taking place in the energy sector, and not be left with an outdated and expensive fossil energy sector, says Climate and Environment Minister Espen Barth Eide.

Mobilisation of private capital by Norfund accounted for a large share of the increase in Norwegian climate finance in 2022. The Climate Investment Fund alone mobilised more than NOK 5.6 billion in private capital. The purpose of the Climate Investment Fund is to help reduce or avoid greenhouse gas emissions by investing in renewable energy in developing countries.

‘According to the IEA, there needs to be a sevenfold increase in annual investments in renewable energy in developing countries, and we are seeing that we can make an effective contribution to this by bringing other investors on board and mobilising private capital. Already in its first year of operation, the Climate Investment Fund invested in projects in India and South Africa that will avoid emissions equivalent to 13 % of Norway’s annual emissions,’ said CEO of Norfund Tellef Thorleifsson.

It is the poorest and most vulnerable communities that are most severely affected by the climate crisis. Strengthening climate change adaptation and disaster risk reduction is vital to enable countries to build resilience, for example against increasingly frequent extreme weather events.

‘The people I have met on the ground have made it quite clear that they cannot respond to the climate crisis without increased support from countries like Norway. Our target is to at least triple our funding for climate change adaptation. This support is essential to better equip developing countries to withstand the adverse impacts of climate change,’ said Ms Tvinnereim.

The amount of private capital mobilised will vary from year to year. Next year's figures may therefore be below the target of NOK 14 billion.