Egypt's Climate Pioneer emphasizes the financial burden on developing countries

CAIRO — 12 April 2023: Dr. Mahmoud Mohie El Din, the Egyptian Presidential Climate Pioneer for the United Nations Framework Convention on Climate Change COP27, has said that this week's Spring Meetings of the International Monetary Fund (IMF) and the World Bank in Washington represent a new opportunity to address the crisis of financing development work in general, and climate work in particular.

Mohie El Din explained that the poorest countries bear the highest human cost of climate change and that they also pay the greatest financial cost to protect themselves against the phenomenon and find solutions.

He further stated during a press interview that achieving carbon removal by 2050 and maintaining a global temperature increase of 1.5 degrees Celsius by 2030 requires an annual investment of around $2 trillion from developing countries, excluding China, while advanced countries have so far failed to provide annual climate financing to developing countries of even $100 billion.

Mohie El Din also pointed out that multilateral development banks such as the World Bank can help finance climate work, but the current arrangements for financing climate from advanced countries to developing countries are ineffective, inadequate and unfair.

He stated that the best way to do this is through a new approach launched at the twenty-seventh Conference of the Parties in November called "1% for 1.5°C."

Mohie El Din explained this approach, saying it depends on multilateral development banks expanding concessional financing terms to include middle-income countries as well as low-income countries so that they can afford to pay for renewable energy and basic infrastructure that can help them deal with the increasing risks of climate change.

These countries will be able to borrow at an interest rate of 1% with a grace period of 10 years during which they will not have to pay anything, followed by a repayment period of 20 years.

UTILIZING CLIMATE FINANCE

In response to claims that there are no viable investment projects to utilize climate finance, Egypt has partnered with UN regional economic committees and the Climate Champions team to launch the Five Regional Forums initiative.

This project has led to the creation of numerous projects that are both fundable and implementable. Additionally, the Race to Zero initiative has identified a set of projects worth $120 billion with high investment potential, including an $800 million project to adapt agricultural crops to climate change in the Nile Valley and Delta region of Egypt, as well as a $11-$17 billion project to restore ecological systems in the Indus Basin in Pakistan.

Speaking on the initiative, Mohieldin emphasized the importance of utilizing climate finance to combat the increasing impacts of climate change.

He noted that with a 1% approach to 1.5°C, the world can take advantage of this moment to launch climate finance in the right way, enabling all developing countries to implement carbon reduction plans and adapt to protect themselves better from the impacts of climate change.