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Technical Assessment ValidationCentral Asia and South Caucasus
Pre-validation workshop: Needs-based Climate Finance Project
George Anjaparidze - 25 May 2021
Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Contents
Part 1: Technical assessment of climate finance
Part 2: Country feedback on technical assessment
2
Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Part 1:
Technical assessment of climate finance
3
Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
• Regional context – special circumstances and highly vulnerable
• Climate finance flows – mostly for mitigation, $9.1 bn total between 2013-
2018, of which 1.7 bn per year in 2018
• Climate finance needs – balanced adaptation/mitigation, capacity building,
finance and technology are priorities, $3.3 bn climate finance gap per year.
• Climate finance sources – 78% MDBs, 20% bilaterals
• Financial instruments – 89% debt, 10% grants, 1% equity
• Regional cooperation is an untapped opportunity
Key points – technical assessment
4
Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Mandate, objective and approach
Desk-based study
• Review needs identified in BRU, NDC,
NC, TAP, TNA
• Compile climate finance data
• Review other sources
Consultation with focal points
• Facilitate discussion among focal points
• Survey focal points
• Engage other stakeholders based on
focal point guidance
NDC = Nationally Determined Contribution, TNA = Technology Needs Assessment, NAP = National
Adaptation Plan, BRU = Biennial Report, NC = National Communication
Climate Finance Mobilization and Access Strategy
Objective: Help develop Climate Finance Mobilisation and Access Strategy
Mandate: Assist developing countries in assessing their climate finance needs
and priorities 6/CP.23, para 10
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Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Regional context: diverse, in transition to market economy
Oil & Gas Exporters
87%
Oil & Gas Importers
13%
Central Asia and South Caucasus share of 2019 GDP
AZE14%
KAZ55%
TKM14%
UZB17%
Oil and Gas Exporters share of 2019 GDP
ARM28%
GEO37%
KGZ18%
TJK17%
Oil and Gas Importers share of 2019 GDP
Source: International Monetary Fund, World Economic Outlook, October 2020. Note: Abbreviations based on International Organization for Standardization codes.
Oil & Gas Exporters
87%
Oil & Gas Importers
13%
Central Asia and South Caucasus share of 2019 GDP
AZE14%
KAZ55%
TKM14%
UZB17%
Oil and Gas Exporters share of 2019 GDP
ARM28%
GEO37%
KGZ18%
TJK17%
Oil and Gas Importers share of 2019 GDP
Source: International Monetary Fund, World Economic Outlook, October 2020. Note: Abbreviations based on International Organization for Standardization codes.
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Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Climate mitigation context: very special circumstances
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Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Highly vulnerable to climate change – temperature
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Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Highly vulnerable to climate change – streamflow
Source: Intergovernmental Panel on Climate Change
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Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Climate finance flows: sectors
Energy sector is the largest recipient of climate finance
$9.1 billion
10
Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Climate finance flows: themes
Finance mostly supports mitigation, but adaptation rising
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2013 2014 2015 2016 2017 2018
Mitigation Adaptation Crosscutting
Note: Only climate components and principle climate activities aggregated under climate finance.Source: George Anjaparidze using data provided by UNFCCC secretariat compiled based on OECD reporting.
$ million
2013 – 2018: 76% mitigation, 19% adaptation and 5% crosscutting
11
Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Climate finance: channel (2013-2018)
MDBs are the largest providers of climate finance
0 1000 2000 3000 4000
Armenia
Azerbaijan
Central Asia, regional
Georgia
Kazakhstan
Kyrgyzstan
Tajikistan
Turkmenistan
Uzbekistan
Bilateral Multilateral development banks Other multilaterals
$ millions
Source: George Anjaparidze using data provided by UNFCCC secretariat compiled based on OECD reporting.
Bilateral20%
Multilateral development
banks78%
Other multilaterals
2%
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Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Needs are balanced between adaptation and mitigation
Adaptation Mitigation Cross-cutting
Needs communicated by Central Asia and South Caucasus through UNFCCC
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Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Countries need capacity building and finance most
Capacity building
Finance and investment
Crosscutting or unspecified
Technology transfer
Policy development and
regulation MRV
Needs communicated by Central Asia and South Caucasus through UNFCCC
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Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Climate finance and broader financing needs are not being met
15
Baseline, 33
Climate adjusted, 5
Current expenditure, 22
Gap baseline, 11
Climate finance, 1.7Gap climate finance, 3.3
0
5
10
15
20
25
30
35
40
Needs 2018
$ billions per year
Notes: Current expenditure is estimated based on CACS sample countries based on a gap in baseline needs of 2.3% of GDP. Source: George Anjaparidze using data from 2017 ADB report Meeting Asia’s Infrastructure Needs to estimate needs and current expenditures. Climate finance flows in 2018 are estimated using data provided by UNFCCC secretariat compiled based on OECD reporting.
Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Climate finance flows: instruments
Debt instruments are most common
$ million
16
Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Climate finance: instruments by source (2013-2018)
MDBs largest providers, but mostly debt
0 2000 4000 6000 8000 10000
Debt instruments
Equity
Grants
Bilateral Multilateral development banks Other multilaterals
Source: George Anjaparidze using data provided by UNFCCC secretariat compiled based on OECD reporting.
$ millions
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Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Climate finance: instrument and sources for regional (2013-2018)
Supported bilaterally, are climate funds an untapped opportunity?
0 20 40 60 80 100 120 140 160
Debt instruments
Equity
Grants
DAC members Multilateral development banks
Source: George Anjaparidze using data provided by UNFCCC secretariat compiled based on OECD reporting.
$ millions
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Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Adaptation challenges that are regional and prevalent
Irrigation Agriculture Energy
Pests Health Disaster
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Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Mitigation opportunities with regional elements
Transport Energy Forests
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Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
• Regional context – special circumstances and highly vulnerable
• Climate finance flows – mostly for mitigation, $9.1 bn total between 2013-
2018, of which 1.7 bn per year in 2018
• Climate finance needs – balanced adaptation/mitigation, capacity building,
finance and technology are priorities, $3.3 bn climate finance gap per year
• Climate finance sources – 78% MDBs, 20% bilaterals
• Financial instruments – 89% debt, 10% grants, 1% equity
• Regional cooperation is an untapped opportunity
Key points – technical assessment
21
Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Thank You
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Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
Part 2:
Country feedback on technical assessment
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Regional Climate Finance Strategy for Central Asia and South Caucasus
Pre-validation workshop, 25 May 2021
• Is the regional context reflected?
• Are climate finance flows captured?
• Are the needs and priorities reflected?
• What are the challenges to mobilizing and accessing climate finance?
Other points for discussion
24
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