With 335% increase in investment, compared to the same period last year, listed Canadian cleantech and renewable energy companies are enjoying their strongest fundraising performance ever in the first half of 2021, showing an incredible momentum. However, experts warned that market volatility in the energy transition is something that has to be watched.

At its latest board meeting in March 2021, the Green Climate Fund (GCF) approved $1.2 billion in funding for 15 climate change projects in developing countries. However, funding for only two of these projects, or 1.5% of the total amount, went directly to developing country institutions.

Most of the climate finance provided by the GCF flows through international institutions such as the UN Development Programme (UNDP) or the World Bank. The GCF has accredited 62 developing country institutions as eligible for direct access so far, but 42 of them have yet to receive actual project funding.

Why is it crucial to give developing countries greater direct access to finance?

The U.S. Treasury Department issued new energy financing guidance to multilateral development banks on Monday, saying the United States would oppose their involvement in fossil fuel projects except for some downstream natural gas facilities in poor countries.

The new guidance from the Treasury, the largest shareholder in major development banks including the World Bank Group and the African Development Bank, prioritizes financing for renewable energy options and "to only consider fossil fuels if less carbon-intensive options (are) unfeasible."

FAST-Infra: a public-private initiative bringing more than 50 organizations together to push for collective action to mobilize private finance and de-risk investments in sustainable infrastructure in developing countries.

Singapore's National Environment Agency (NEA) has launched a S$3 billion multicurrency medium-term note programme and a green bond framework to finance the development of sustainable waste management infrastructure.

Photo by Yeo Khee on Unsplash

Despite the ambitious Sustainable Finance Disclosure Regulation in the EU - making it more advanced than the US and Asia in ESG regulatory framework - banks and asset managers are concerned about the uncertainties and 'blind spots' in interpretation, leaving some room for greenwashing. They believe that regulations should provide a clear basis for all market players and should be well prepared.

Multilateral development banks (MDBs) play an important role in financing developing countries’ efforts to reduce emissions and protect against the effects of climate change, and 2020 was a critical waypoint for MDB climate finance. For one, it marked the due date for the climate finance targets many MDBs set in 2015. 2020 was also the year by which developed countries committed to mobilize $100 billion per year in climate finance for developing countries, with many developed countries channeling a significant share through MDBs.

Find out more about MDBs' progress during 2020.