Canada’s Climate Finance Distribution Channels

Canada’s main climate finance distribution channels are the Climate Investment Funds, Global Environment Facility, and Green Climate Fund. Over 50 developing economies benefit from fast-start financing through Canadian bilateral and multilateral channels.

Distribution by Region

With regard to direct financing, about ¼  is channeled to sub-Saharan Africa and over 33 percent flows to the Caribbean and Latin America. Eastern Europe, Central Asia, North Africa, and the Middle East account for 2 percent each. The number of countries benefiting from contributions by Canada is larger under the Least Developed Country Fund and the Global Environment Facility, which are both multilateral trust funds.

Green Climate Fund

A network of more than 200 entities, the Green Climate Fund works closely with developing economies on projects, from design to deployment. The network includes civil society organizations, UN agencies, equity funds, national, regional, and multilateral institutions, and national and international commercial banks. The types of financing instruments available are mainly in the form of crowd-in private investment leverage blended finance, equity instruments, guarantees, concessional debt, and grants.

The network channels half of the resources toward adaptation and half toward climate change mitigation. At least 50 percent of the resources for mitigation glow to Africa states, small islands developing states, and the least developed countries, which are also the most vulnerable. Adaptation areas include ecosystem services and ecosystems, built environment and infrastructure, and water and food security, wellbeing, and health. Programs and projects with a focus on climate change mitigation aim at reforestation, improved utilization of land, use of wind, solar, and other clean sources, and energy-efficient appliances and buildings.

Global Environment Facility

Canada also channels funds through the Global Environment facility, together with 40 donor countries such as Italy, China, the U.S, UK, Sweden, South Africa, and the Russian Federation. GEF’s main focus areas are climate change, biodiversity, land degradation, chemicals and waste, and international waters. The facility works with a number of implementing agencies such as the UN Industrial Development Organization, Food and Agriculture Organization, World Bank, and Conservation International. The main sources of financing are the GEF Trust Fund, multi trust funds, and Least Developed Countries Fund.

Climate Investment Funds

The funds act as a finance mechanism to support projects in the areas of sustainable forests, climate resilience, energy access and clean technology. The fund offers long-term, low-cost financing to middle income and developing countries. The largest share of financing flows to Asia (32 percent), followed by Africa (27 percent), Latin America and the Caribbean (21 percent), Central Asia and Europe (13 percent), and Middle East (4 percent). The total contribution by 14 donor counties stands at $8 billion, with expected co-financing of $53 billion.

The funds support a wide variety of projects with a focus on climate change, including initiatives to support forestry, improve water availability, and develop insurance products for semi-arid and arid zones. The main focus areas are landscape management and agriculture, urban development, water resources management, agroforestry, energy efficiency, and renewable energy. Funds partnering with developing and middle income countries include the Pilot Program for Climate Resilience, Clean Technology Fund, Forest Investment Program, and Scaling Up Renewable Energy Program in Low Income Countries.

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