Plans to reduce carbon emissions gather momentum

By Wallace Mawire

The Infrastructure Development Bank of Zimbabwe (IDBZ) is advancing with plans to introduce a green bond meant to help finance Zimbabwe’s Nationally Determined Contribution (NDC) programme aimed at reducing carbon emissions in the country.

The   World Bank Zimbabwe  office in Harare recently held a workshop in the capital focusing on support for the NDC implementation framework in Zimbabwe. The workshop was supported under the Zimbabwe Reconstruction Fund (ZIMREF).

“In structuring the first green bond, we hope to work with the Ministry of Finance, OPC, Climate Change Department and RBZ among other stakeholders,” said Veronica Jakarasi, IDBZ manager climate finance division.

“UNDP Office in Thailand has committed to share their experiences in working with other Asian countries and one of them include making ministries of Finance understand the language so that they are fully on board since adaptation and mitigation may not be common in their day to day functions.

“The bond will seek to support green projects, but we have not discussed details of its capitalisation and beneficiaries,” Jakarasi added.

According to World Bank representatives in Harare, Zimbabwe submitted its Intended Nationally Determined Contribution (INDC) to the UNFCCC in September 2015, setting out its adaptation and mitigation goals.

It is reported that with the entry into force of the Paris Agreement in November 2016, the

INDC formally became the country’s first NDC.

The NDC mitigation target is given as 33% below a projected ‘Business As Usual’ (BAU) baseline for per capita Greenhouse Gas Emissions (GHG) by 2030. It is also conditional on outside support and covers emissions arising from energy use in the electricity generation, transport, industry, commercial/institutional, residential and agriculture sectors.

The government of Zimbabwe also identified the need to develop further analysis on the measures proposed in the NDC to prioritise interventions, as well as to develop an implementation framework of mitigation actions based on updated information and more in-depth assessment of the country’s mitigation potential.

The World Bank workshop sought to discuss with various stakeholders the preliminary findings of the NDC analysis and framework proposal and to gather inputs, comments and perspectives on the work conducted as well as identification of the next steps.  

According to Jakarasi, the former Ministry of Environment Water and Climate, held the first   Green Investment Catalyst roundtable (GIC-RT) from 5 – 6 December 2017 in Victoria Falls, Zimbabwe.

“Experts from Nigeria, Kenya, Zambia, South Africa, UK and France provided welcome insights on prospects and solutions and provided first-hand accounts on how to translate high-level climate policy commitments into financial frameworks that move real money for NDCs implementation,” Jakarasi said.

She added that ideas were exchanged on how Zimbabwe can finance implementation of its Nationally Determined Contribution (NDC) and re-engagement of international capital markets.

Discussions were also held on how to attract additional green finance, further development of project pipelines, promoting policy coherence, and on ways to leverage development finance and risk sharing solutions to deepen renewable energy, energy efficiency, sustainable transport and smart agriculture private sector investment in the country.  

“There was a consensus to rapidly establish a process that will enable and spur sustainable financial products such as green, social and sustainable bonds/notes, and green social and sustainable loans, which will contribute to achieving the NDC, improve risk perception, attract greater inflows of foreign capital and scale up pipelines of bankable projects and domestic investments,” Jakarasi said.

She said the meeting birthed a concept of establishing the Green Investment Framework for Zimbabwe which was envisaged as Zimbabwe’s green finance (loan and bond) framework (guidelines, taxonomies etc.).

This will involve all relevant Zimbabwean institutions and be developed with the help of international stakeholders.

According to Jakarasi, the Infrastructure Development Bank of Zimbabwe responsible for promoting infrastructure projects in the energy, transport, water and sanitation, information communication technology and housing sectors, was tasked to work with the Climate Change Management Department.

The Department is responsible for coordinating a championing group comprising senior peers established to guide the process at permanent secretary, CEO, Senior Director levels, Ministry of Finance and Economic Planning (MoFEP), Ministry of Environment, Water and Climate (MoEWC), Ministry of Energy and Power Development (MoEPD), Reserve Bank of Zimbabwe (RBZ), Office of the President and Cabinet (OPC), just to mention a few. 

Zimbabwe’s NDC aims to achieve an emission reduction target of 33% below the projected Business As Usual (BAU) energy emissions per capita by 2030.

IDBZ’s  thrust is to contribute towards achievement of objectives set in the country’s National Climate Policy, Climate Change Response Strategy, NDC and Low Emissions Development Strategy.  Once completed, within the green finance framework, the Infrastructure Development Bank of Zimbabwe, with assistance of international partners, shall establish a Climate Finance Facility (CFF) and develop Zimbabwe’s first green bond/note issue.

 “Work has not advanced as anticipated on this matter, but institutionally, the IDBZ Board of Directors approved the setting up of a Climate Finance Facility subject to undertaking of a detailed Feasibility Study (FS). The call for Expression of Interest closed on the 24th of September and shortlisting is underway which seeks to assess the feasibility of establishing a CFF which is essentially a ring-fenced and thematic trust fund dedicated to financing green and sustainable projects,” Jakarasi said.

Jakarasi said the Bank seeks to ensure that it does not rely solely on the facility to fund green projects,  but to also develop or enhance domestic funding sources for the financing of green projects and support development of innovative and sustainable funding mechanisms.  

Post Author: MISA Zimbabwe

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