The Sharm El Sheikh Guidebook for Just Financing presents solutions that promote Innovation, to push forward the Climate Agenda 

November 11, 2022

The Guidebook set forth key recommendations that address the broad array of climate change challenges faced, such as: 

● Mainstream Just Financing principles across climate finance activities that align global climate agenda targets with national development objectives.

● Generate pipelines of high impact investable projects that are Paris-aligned and contribute towards national priorities with different risk/return profiles.

● Foster enabling environments and enhance policy and regulatory frameworks that incentivize private sector investment.

● Ensure that capital providers’ engagement modalities in MICs and LICs consider country capacity and market readiness when designing instruments and allocating capital.

● Implement sectoral prioritization to address climate action most efficiently by targeting high-impact sectors, the coordination of which can be carried out by an external entity.

● Increase the capital base of MDBs and reconsider their approaches to risk appetite through partnerships with the private sector supported by governance and management oversight.

● Promote collective action through country platforms to unlock necessary resources to achieve impactful, climate-resilient and sustainable development.

● Adopting the Climate Investment Mobilization Framework introduced by the Guidebook, which lays the grounds for an international multi-stakeholder platform that would be aligned with the needs and priorities of both developed and developing countries.

● Adopting sound indicators to measure the results of climate action is crucial as it facilitates coherence of efforts across partners.

● Invest in research and development (R&D) and infrastructure that will inform climate finance, accelerate efforts to achieving NDCs targets as well as deliver on national development agendas and maximizing social returns.

● Promote continual innovation and scaling of financial instruments that are fit-for-purpose for climate projects particularly in underserved geographies. 

● Ensure that technology-based solutions to climate change mitigation, adaptation and resilient development are nationally-driven by governments who have a clearer understanding of their circumstances and priorities in their revised NDCs.

● Utilize public policy, and potentially public funding, to catalyze novel technologies and increase its investability for private investors.

● Improve access to new technology options that can reduce reliance on unabated fossil fuels to drive industrialization.

● Capitalize on the acceleration of digital connectivity across the continent and the new technologies that may allow Africa and other regions to ‘leapfrog’ stages of technological development in ways that are both climate-smart and equitable.

● Leverage the continent’s increasing global appetite for investments in green technology sectors and support innovation and entrepreneurship to develop smart solutions that address Africa’s emerging challenges. 

Case Studies:

● The guidebook presents 48 successful case studies spanning across varied sector that target mitigation and adaptation purposes. Amongst is the Greater Cairo Metro Line 4 Phase I Project, developed by Japan International Cooperation Agency (JICA) with the National Authority for Tunnels under the Egyptian Ministry of Transport, showcasing an example of a sustainable transport project that aims to connect Cairo to 6th of October City with an 18-kilometer-long mass transit railway line. The project deploys a non-blended finance approach, relying mainly on Official Development Assistance ODA and concessional loans.

● This project will facilitate eco-friendly, low-carbon transport that aligns with Egypt’s commitment to reduce emissions from transportation by 7 percent (9 MtCO2 eq) by 2030. Additionally, it contributes to SDG8 “Decent Work and Economic Growth,” SDG9 “Industry, Innovation, and Infrastructure,” SDG11 “Sustainable Cities and Communities,” and SDG13 “Climate Action.”

● The entire Line 4 is expected to have daily ridership of 1.9 million passengers by 2030 and 2.5 million passengers by 2050, contributing to regional economic development and improving access to job opportunities. It will also boost tourism and reduce car and bus congestion, thereby reducing GHG emissions from cars, by improving connectivity.

● Several factors have made this project successful which revolves around the close coordination and collaboration between JICA and the Government of Egypt since mid 2000, on developing feasibility studies, route planning, resettlement plans, environmental impact assessments; in addition to JICA assisting Egypt in producing transportation master plans to Greater Cairo. 

● Furthermore, the guidebook showcases a successful example of a green building project, the Mezz Tower Guarantees project, developed by Multilateral Investment Guarantee Agency (MIGA), deploying a blended finance approach to promote the sustainable infrastructure sector. 

● The project aimed to facilitate the financing and development of high-standing office facilities and integrated business services for a 17-story office tower in downtown Djibouti City, which includes an energy-efficient design. This project contributed to SDG11 “Sustainable Cities and Communities” as well as SDG13 “Climate Action.”

● The MIGA guarantee provided coverage for the project against a variety of risks, including expropriation, transfer restriction and war and civil disturbance. With this blended financing approach, the financing for the project was more efficient and its implementation successful.

● Prior to the development of this project, downtown Djibouti City did not have any economic activity or formal use. This project allows for increased and much needed office space in Djibouti City and likely increases the commercial real estate value of the surrounding area, consequently boosts commercial investment.

● As a result, the project is expected to generate rental income of USD 1.5 million, and to save approximately 270 tons of carbon dioxide emissions per year.