Climate measures require blended funding

05.12.23 | News
Benjamin Diokno and Karin Isaksson at COP28

Benjamin Diokno and Karin Isaksson

Andreas Omvik,
In addition to further emission reductions, adaptation and climate funding are also on the agenda at COP28. During the first day of the conference, an agreement was reached on the fund for damages and losses, with a further aim of agreeing on global adaptation goals. It’s clear that private funding will play a crucial role in funding adaptations to climate change going forwards.

Co-operation between public and private stakeholders is important

During Monday’s event in the Nordic pavilion, discussions were held on how the private sector can help to fund climate measures. The Nordic Development Fund’s (NDF) event was opened by Finland’s Minister for Foreign Trade and Development, Ville Tavio, who stressed the importance of co-operation between public and private stakeholders and of connecting trade and development in order to bring about lasting changes.

“Just as in other Nordic countries, in Finland we believe that both public and private investments are crucial for the transition both domestically and in developing countries,” said the minister.

Climate funding has reached record levels

Although climate funding has reached record levels, it’s still not enough to meet needs, especially in low-income countries and the most vulnerable nations. Consequently, in Dubai, there’s a call for more private funding linked to climate adaptation.
The Nordic countries support private-sector investments in developing countries by way of blended funding, public-private partnerships, and investment grants.

“The role of the private sector is primarily to offer services and products to address the challenges of climate change. The Nordic countries can highlight blended funding in the international forum for climate funding and advocate for innovative blended climate structures,” says Karin Isaksson, Managing Director of the Nordic Development Fund (NDF).

Increasing trade with emerging economies is a win-win situation.

Ville Tavio, Finland’s Minister for Foreign Trade and Development

Increasing focus on blended finance

The Nordic Development Fund, funded by the Nordic governments, works on climate adaptation and development in low-income countries in areas such as Sub-Saharan Africa, Asia, and Latin America. NDF has increasingly focused on so-called blended funding and serves as a bridge between the private and public sectors. Flexible funding is aimed at both climate adaptation and climate mitigation.

“As a global community, we have a responsibility to invest in climate measures in the countries that need it the most,” says Isaksson.

According to minister Ville Tavio, investments in developing countries are associated with risks that can impede private-sector investments in these regions. The availability of so-called soft funding with favourable terms can attract Finnish and Nordic companies to invest in markets where financial risks are considered high, he says.

“Increasing trade with emerging economies is a win-win situation.”

Tavio points out that the goal should be for Nordic financial instruments to complement each other.

“The Nordic countries have some of the best clean tech companies in Europe. By sharing our technical solutions, we can help to meet climate goals and boost our own exports.”