In this episode of Planet A, Dan Jørgensen is joined by Mafalda Duarte, the executive director of the world’s largest climate fund – the Green Climate Fund.
Mafalda Duarte sheds light on how the fund is at the forefront of aiding developing countries on their path to development that is both low in emissions and resilient to the climate.
She explains the fund’s projects which span billions of dollars and how to balance this with the needs of developing countries: “We have to put ourselves in the shoes of these people in developing countries.”
What concrete investments lead to sustainable development? How can developed and developing countries better work together to achieve climate goals?
Join us as Mafalda Duarte and Dan Jørgensen tackle these questions and discuss the potential of climate finance in the quest for sustainable development.
In this episode of Planet A, Dan Jørgensen is joined by Mafalda Duarte, the executive director of the world’s largest climate fund – the Green Climate Fund.
Mafalda Duarte sheds light on how the fund is at the forefront of aiding developing countries on their path to development that is both low in emissions and resilient to the climate.
She explains the fund’s projects which span billions of dollars and how to balance this with the needs of developing countries: “We have to put ourselves in the shoes of these people in developing countries.”
What concrete investments lead to sustainable development? How can developed and developing countries better work together to achieve climate goals?
Join us as Mafalda Duarte and Dan Jørgensen tackle these questions and discuss the potential of climate finance in the quest for sustainable development.
SPEAKER B
[00:01 - 00:14] We have been investing in developing countries now for almost a decade. We've just approved another more than $750 million that the Green Climate Fund is currently investing.
[00:15 - 00:27] It's a very important tool. It is supporting critical action in developing countries. This is what's important. We have to put ourselves in the shoes of these people in developing countries.
SPEAKER A
[00:28 - 00:37] The theme of today's conversation is the biggest fund you maybe never have heard about. The Green Climate Fund.
[00:38 - 00:44] A lot of people don't know that this is actually the biggest multilateral climate investment fund in the world.
[00:44 - 01:01] And I speak to Mafalda Duarte, recently appointed executive director, about how to make the money of the fund make real progress and a real difference in the fight against climate change, both with regards to mitigation and adaptation.
[01:02 - 01:13] Welcome to Planet A, a podcast on climate change. My name is Dan Jørgensen. I'm Minister for Development, Cooperation and Global Climate Policy in Denmark.
[01:13 - 01:21] In a series of conversations, I ask some of the world's leading experts, policymakers, authors and activists how to stem climate change.
SPEAKER A
[01:55 - 02:05] Welcome to Planet A. Today I'm honored to have Mafalda Duarte joining us. Mafalda is the executive director of the Green Climate Fund.
[02:06 - 02:17] Mafalda's journey in climate finance began in the academic field. She earned a master's degree in environmental economics and a PhD in climate policy,
[02:17 - 02:28] which equipped her with the knowledge and expertise needed to understand the complexities of the climate crisis. Hello, Mafalda, and welcome to my podcast.
SPEAKER B
[02:29 - 02:33] Minister, thank you very much. It's a pleasure for me to be with you.
SPEAKER A
[02:33 - 02:43] Well, I've been looking forward to talking to you for many reasons, but primarily because I've found that a lot of people don't know the Green Climate Fund,
[02:43 - 02:56] which is a little bit strange since you are a very big fund, a very important fund, the biggest fund of its sort. Now, you're still pretty new in your mandate,
[02:56 - 03:10] but you have some exciting visions and are already doing a great job. So I'm very happy that you are joining me here today. Could you maybe start by explaining to our listeners what is the Green Climate Fund?
SPEAKER B
[03:11 - 03:25] Absolutely. So the Green Climate Fund is actually the largest multilateral climate fund that we have. It's the primary financial tool or mechanism of the United Nations Framework Convention on Climate Change.
[03:25 - 03:38] So what does this all mean for the broader audience? It means that, you know, when different countries agreed that we needed more climate emission and we needed more and we needed support,
[03:39 - 03:52] we needed to support developing countries, both joining the global efforts to mitigate greenhouse gas emissions, but also, you know, recognizing that they are disproportionately affected by the impacts.
[03:52 - 04:05] They also needed support to be able to to adapt and become resilient. They acknowledged that there was a need for a financial tool and that financial tool was agreed by all countries.
[04:06 - 04:18] That primarily financial tool is the Green Climate Fund. So we have been investing in developing countries now for almost a decade. We have with the recently approved projects.
[04:18 - 04:28] So I mean, I'm coming out of the board meetings of the Green Climate Fund this week here in Georgia, Tbilisi, from where I'm having this podcast with you, Minister.
[04:28 - 04:34] So we've just approved another more than 750 million dollars for 15 projects.
[04:34 - 04:44] And that takes us to more than 14 billion dollars that the Green Climate Fund is currently investing in developing countries.
[04:44 - 04:51] More than it's around 130 countries that are benefiting from Green Climate Fund resources.
[04:51 - 05:04] And with that, of course, we are bringing other financial institutions to invest alongside us. The multilateral development banks, the private sector, the governments and others.
[05:05 - 05:12] So it's a very important tool. It is supporting critical action in developing countries.
SPEAKER A
[05:12 - 05:25] Yes. So it's a substantial fund. It helps primarily the countries that are in dire need both for climate transformation in the sense that
[05:25 - 05:38] they need help to invest in a transition to fight climate change, the sources of climate change, but also to climate adaptation. Right? Correct. So where does the money come from?
SPEAKER B
[05:38 - 05:49] Well, the money comes from countries like yours. Yes. It's a bit of a leading question, I guess you could say. And I thank you very much, Minister, and your government for the leadership.
[05:50 - 06:01] We had a recent conference where the contributors came together in Bonn in Germany. So the fund has what it's called the replenishment cycle.
[06:01 - 06:10] So every four years, developed countries pledge to make financial contributions for the fund for a period of time.
[06:11 - 06:24] And so we are in the third round of it's our third round of raising capital and resources from developed countries. Thank you to you and your government, because you've doubled your contribution from last time.
[06:25 - 06:40] We had quite a number of countries that increased their contributions as well. Seventy five percent of the 25 countries that have contributed increased their contributions.
[06:40 - 06:54] We are at the moment at nine point three billion. There are still important countries that have not yet managed to confirm, go through their internal processes,
[06:54 - 07:05] clearing processes to to be able to announce their pledges. But we are hopeful and confident that they will be able to do so before COP28.
[07:06 - 07:10] Well, I wasn't actually fishing for a compliment, but I'll take it now that you now that you give it.
SPEAKER A
[07:10 - 07:19] It's important to tell our listeners, of course, that it is national governments that decide to pledge to to the fund.
[07:19 - 07:33] And that that's what makes it possible to have this very, very big amount of money and what makes the fund the biggest multilateral climate fund in the world. So in many ways, it's a huge success story.
[07:33 - 07:42] I would also say, though, and you're probably too polite to say it, Mafalda, but I would also say that I would hope that more countries would step up because even though the fund is big,
[07:42 - 07:56] it's it's far from as big as we could have hoped, because the need is there for more investments. Which brings me to ask you some questions about the state of the world, so to speak.
[07:56 - 08:02] How do you see right now the need for investment investments, both in mitigation and adaptation efforts?
SPEAKER B
[08:03 - 08:18] Yes, you are right. We are far behind where we need to be. And we just need to look at the latest reports from the scientists, from the financial institutions.
[08:19 - 08:25] We have massive gaps in terms of investments, both on mitigation and adaptation.
[08:31 - 08:46] And one of the things that to me is very important is for, and this is also why I think this having these podcasts and, you know, engaging with citizens as much as possible in this debate is actually quite critical,
[08:46 - 09:00] because we need the citizens of the countries to understand that their governments need to make these investments. They need to be supported. In fact, the citizens need to ask their governments to do exactly this.
[09:01 - 09:08] And I come from Europe as well. So, you know, I am from one of the European countries, you know,
[09:08 - 09:16] have lived many years in different countries, developing countries, have come just out of living nine years in the United States.
[09:16 - 09:25] And I see this need of us citizens understanding that investing in developing countries is actually investing domestically,
[09:25 - 09:40] is investing in Europe, is investing in the U.S., because in developing countries is where we will see two thirds of the trillions of dollars that are necessary in sustainable infrastructure in the coming years.
[09:40 - 09:50] Two thirds of 90 trillion that, according to OECD, is necessary, is expected to take place in developing countries.
[09:51 - 10:02] So as you and I know, Minister, if these investments, and these are investments in energy, in transport, so in many sectors, infrastructure sectors,
[10:02 - 10:12] if these investments lock us into a carbon intensive world, there is no way we are going to meet the Paris goal.
SPEAKER A
[10:13 - 10:24] I totally agree. And maybe you can share with the listeners also some concrete examples of projects that you support.
[10:24 - 10:30] I think maybe that's useful too. I mean, this is not just giving money to a government and then they can do whatever they want.
[10:30 - 10:43] I mean, this is a concrete strategy that you as the executive director of a fund is trying to implement with very clear goals, right?
SPEAKER B
[10:44 - 10:50] Correct. And this is another important thing for people out there to understand.
[10:51 - 11:06] Let's not lose hope or become a little bit desperate with some of the narrative out there that because, you know, sometimes the scientific narrative is gloomy.
[11:07 - 11:15] And, you know, and I get worried when I see young people in particular say that they are very afraid for their future.
[11:15 - 11:26] And so I think we need more of a narrative out there that really informs people that there are many investments happening and there are solutions.
[11:27 - 11:41] You know, of course, we need more investments in new technologies and new solutions. But even as the International Energy Agency says that investment in research and development of new technologies that will help us in a couple of decades, not now.
[11:41 - 11:49] To act now is with the technologies we have now and we have ample technologies to really make important investments.
[11:50 - 12:01] So I have seen because I have been engaged in this type of work for many years, we have been contributing funds like the Green Climate Fund and other financiers.
[12:02 - 12:09] We have been contributing to this big shift that we are seeing in the energy sector. We are far from where we need to be.
[12:10 - 12:29] But when we look at 2008, 2009, where we were 10, so in just slightly more than a decade, we have seen globally investments in renewable energy in countries where there hadn't been any.
[12:29 - 12:41] And now we see investments in solar. And of course, you know, of course, it's not just solar. That's the other thing that people need to understand.
[12:41 - 12:54] It's the several technologies within renewable energy. So geothermal, it's wind, it's solar. It's a whole set of different technologies and investments.
[12:55 - 13:06] And the funds like the Green Climate Fund and the financial resources we have, because they are public resources from developed countries.
[13:06 - 13:24] We have a degree of flexibility that really enables us to help take care of risks that others are not well placed or to share risks with others and risks that they are really not well placed to take on, in particular the private sector.
[13:25 - 13:35] So I have seen, I have seen investments globally. I have seen solar investments in Morocco, solar and wind investments in Morocco, for example.
[13:35 - 13:49] I have seen geothermal investments in the Rift Valley in Africa, in Indonesia. I have seen solar parks in India. I have seen geothermal investments in Chile. These are all, these are all investments.
[13:49 - 14:01] And these were first, first round, second round, third round investments that we supported in these countries that have never seen a renewable energy investment.
SPEAKER A
[14:02 - 14:16] I'm sometimes confronted with the argument that maybe we shouldn't focus so much on supporting renewable energy in developing countries since they're not really the biggest part of the problem.
[14:17 - 14:30] I mean, they're not the biggest emitters, which is true, especially the least developed countries don't contribute much with greenhouse gas emissions. I always answer to that question. First of all, many countries are growing, which we want them to, which is great.
[14:30 - 14:43] But that also then means, which is a paradox, that they, they risk becoming a part of the problem that's now also threatening to undermine the development because climate change is a threat to development in most countries on the planet.
[14:43 - 14:57] And the ones that then manage to actually have economic growth, grow their energy sector and so forth, if they then also succeed in making this a green growth, they risk becoming a part of the same problem. So that's one point.
[14:57 - 15:10] Second point is, this is also about other things than, than fighting climate change. This is also about creating development in countries where there's, for instance, a lack of access to electricity.
[15:10 - 15:22] So that's also an SDG goal, which is fantastic if we can also help remedy that situation in many countries whilst fighting climate change.
SPEAKER B
[15:23 - 15:36] Yeah. So again, you know, Minister, I think that's a misperception because actually where we expect the highest demand in, the highest growth in energy demand is developing countries.
[15:36 - 15:49] And this is exactly coming back to my earlier point on the investment, the gap, the infrastructure gap in terms of investments in the energy sector is in developing countries.
[15:49 - 15:55] So we are going to see massive investments in the energy sector in developing countries.
[15:55 - 16:13] And if we don't support them to make the choice and to support the private sector to invest and choose to invest in clean energy, then we have basically, we have, we are putting ourselves in a very dangerous path.
[16:14 - 16:34] And so, so we have to think countries, developing countries, so when we talk about developing countries, countries like South Africa, India, Indonesia, and others, I'll tackle first the middle income countries, and then I'll go to the, to the low income countries.
[16:34 - 16:46] But the middle income countries, we know that we need to support these countries transition away from coal. Coal is the single largest source of emissions we have globally.
[16:47 - 16:58] If we don't transition away from coal, help the countries move away from coal and actually rely on clean energy, again, we are not going to meet our goals.
[17:00 - 17:08] So I think this is one important thing, and it's important for the listeners to understand that these countries are highly endowed with coal.
[17:10 - 17:19] So they are not importing coal, they are actually, they have, you know, they have coal as endowments, their own natural resources.
SPEAKER A
[17:20 - 17:28] Some of them are even exporting it and also dependent on the income from the export, so it's not only their own energy sector that's based on coal, it's their whole economy, basically.
SPEAKER B
[17:28 - 17:38] So, so again, but again, these countries are, you know, they can really benefit from investments in renewable energy.
[17:38 - 17:51] Solar in India, Prime Minister Modi has made large commitments and they are investing progressively. Indonesia has largest, one of the largest, the countries with the largest endowments of geothermal resources.
[17:51 - 18:01] South Africa is one of the countries that has the best, one of the best solar radiations in the world. They have also a lot of wind potential.
[18:02 - 18:14] So, and they have a huge demand, energy demand to meet. So that's one part of the story. The other part, when we come to low income countries, I think it's also important for people to understand.
[18:15 - 18:26] We have more than 700 million people without access to electricity globally. Most of, most of the people are in Africa and in Asia.
[18:28 - 18:45] Many of these people will not be able to necessarily get access to energy services through extending the grid, the national grid, because they are in very remote areas.
[18:45 - 18:55] I mean, I'm here in Georgia just to tell you, and as I was speaking to the government officials and asking them, what is the coverage of electricity?
[18:56 - 19:09] And they were saying they are quite high, you know, reaching around 90%. The remaining is remote areas in mountain areas where they cannot really take the grid.
[19:10 - 19:19] And so to a lot of the people, we will need renewable energy solutions that are off grid solutions.
[19:19 - 19:34] So as you said, Minister, this is not just a matter of, this is a matter of development and of resilience. I mean, some of us that have lived, were born and lived all of our lives with energy and easy access to energy.
[19:34 - 19:39] We can't even imagine what it is not to live with energy.
SPEAKER A
[19:39 - 19:46] That's a very good point. Can I just give you, give the listeners one example of that, which is cooking.
[19:46 - 19:59] In many developing countries across the planet, but especially in Africa, a main source of energy for cooking is a different source of biomass, primarily wood.
[19:59 - 20:12] So often in a small village in an African country, the mother of the family and maybe some of the children, often the girls, will spend many hours a day gathering the wood for that.
[20:12 - 20:29] So that's one thing. Even worse effect of this is that it's very, very bad for the health of the people living in the small, very often, very small types of housing because of the particles from burning the wood.
[20:29 - 20:39] So they get respiratory diseases and sometimes even die from this. Plus, of course, it's not very practical.
[20:39 - 20:52] So for them, having electricity as an alternative would obviously impose a huge increase in their well-being and their lives.
[20:53 - 21:07] Now, as you said, it's not very easy to do this though, because in many countries, having a national wide electric grid that covers everybody, it might happen in the distant future, but we are far from being there now.
[21:07 - 21:21] So what are then the sources if we want to provide these people with energy? Of course, some places, they choose generators and that's fossil, that's diesel often, but possibly other fossil.
[21:23 - 21:32] Hopefully, we can avoid too many countries going down that route. Instead, very often, renewables can be made locally.
[21:32 - 21:40] So you can have a local grid in some instances, or if it's a solar panel, it could be directly to one village or even one house.
[21:41 - 21:48] So these are also very good reasons why investing in renewable energies in developing countries is a good idea.
[21:48 - 21:56] And in many cases, you can even argue that investing in renewables is both adaptation and mitigation.
[21:56 - 22:09] Mitigation, obviously, because we'll have less emissions than if we use fossil alternatives, but also adaptation because it helps them create more resilient societies in a time where they are hit by climate change already.
SPEAKER B
[22:10 - 22:23] Yes, it's difficult to see really, I mean, it's difficult to see how we can say that any household or community can be resilient to climate if it doesn't have access to energy.
SPEAKER A
[22:23 - 22:23] Exactly.
SPEAKER B
[22:24 - 22:35] So it's very difficult to see. And as you said, the good news is that there are solutions, there are mini grid systems that combine different renewable energy sources.
[22:36 - 22:39] There are solutions that are just purely solar.
[22:40 - 22:54] And to be honest, you know, I think and you will hear, you would hear many specialists out there said that because those solutions are available and they actually become more economical than diesel generators.
[22:54 - 22:57] Because this is the other thing for people to understand.
[22:57 - 23:16] And, you know, me having worked many, you know, many, many years in Africa and traveling extensively in the continent, I heard several people, you know, saying very clearly they are paying very high bills when they use the generators, diesel generators.
[23:16 - 23:24] It's actually more expensive to them than an alternative, a solar, you know, a solar system would be for them.
SPEAKER A
[23:24 - 23:28] Even though sometimes it's actually subsidized. See, this is a paradox, right?
[23:29 - 23:45] So governments, governments that are in need of resources spend some of their valuable resources subsidizing something that's polluting and that for the end consumer, even though it's subsidized, is still more expensive than had they chosen renewable energy.
SPEAKER B
[23:45 - 24:00] And it's and what you were saying is also really, really important. And I think we it's important to help people relate to this. If we have our children, our daughters, as you said, it tends to be girls.
[24:01 - 24:09] I mean, can we just imagine you and I? I have three daughters. I don't know if you have daughters or sons or but I have three daughters.
[24:09 - 24:27] And, you know, the thought of having them spend hours a day going and collecting wood for being able to for me to be able to cook for the family instead of having my three daughters in school.
[24:29 - 24:41] And I think this is what's important. We have to put ourselves in the shoes of these people in developing countries. We would not want this for any of our kids.
SPEAKER A
[24:41 - 24:49] I 100% agree. And also, I mean, this is this is just one problem related to cooking.
[24:49 - 24:58] I mean, there's so many other problems related to the issues that we're talking about here where we need to do more to help.
[24:58 - 25:08] So we all agree that we need to help provide better education for the young generation in Africa, for instance. Right. But I'm sure you've seen this also.
[25:08 - 25:23] I've definitely visited many villages myself where we've actually managed to get funding for facilities like a public school that's free for kids with good facilities.
[25:23 - 25:36] But what happens often is that when, for instance, a drought hits, like I've seen in Ethiopia, I've met people there where the school is there.
[25:36 - 25:49] But what happens is because of the poverty that the drought has led to, the family cannot afford the luxury it is to send their kids to school. So they stay home instead.
[25:50 - 25:59] And that's a vicious circle, right? Because if they don't get the education, then how do you create a resilient society that can actually fight climate change and adapt to climate change?
[25:59 - 26:13] So it's important for people to understand that fighting climate change and adapting to climate change needs to be at the core of all development policies in most countries and especially the ones that are hit the hardest right now.
[26:13 - 26:21] Which leads me to ask you the question about adaptation, because we've spoken mostly on mitigation now.
[26:21 - 26:38] And even though some projects are both mitigation and adaptation related, can you share with us your strategy on how the fund helps countries adapt to some of the catastrophic effects of climate change?
[26:38 - 26:52] Because we see already now, it's important to say that this is not something that might happen in the future. It will be worse in the future, most likely, unfortunately. But it's already here now. Hurricanes, droughts. We see this.
SPEAKER B
[26:52 - 27:06] Yes. So I've had the privilege, even though I started in the Green Climate Fund only August 1st this year, I've already had the privilege of visiting projects in three countries.
[27:07 - 27:20] I visited projects in Kenya, Rwanda, early September, and yesterday we visited a project here in Georgia. All of them adaptation, all of them resilience projects.
[27:21 - 27:34] So the ones in Kenya, this was all about, you know, helping not the one here in Georgia, but the ones in Africa was all about supporting the farmers.
[27:35 - 27:48] Small farmers, the vulnerable communities. So in Kenya, I visited different types of projects and different types of support being provided to farmers.
[27:48 - 27:56] And I want to say something important, which is our support is being given to companies in these countries.
[27:56 - 28:11] So private sector companies in developing countries that are reaching out to these farmers with solutions such as solar powered systems, irrigation systems,
[28:15 - 28:21] biodigesters, other regenerative agriculture practices, drip irrigation.
[28:21 - 28:34] So all of these solutions that are actually being provided by private sector companies in Kenya and they also provide this, they invest in some other countries in Africa.
[28:34 - 28:46] So they are helping the farmers and I spoke with the farmers. I was there, spoke with the farmers and the increase in yields and income is extraordinary.
[28:47 - 29:00] But it requires, it requires the resources, it requires resources, which we provide in technical assistance to be able to provide assistance, technical assistance to the companies as well.
[29:00 - 29:06] On how best they can serve these farmers, these small hold farmers.
[29:06 - 29:16] And then subsidized, subsidized finance, of course, because we are talking about the poor communities, the vulnerable communities.
[29:17 - 29:28] Here, and so then in Rwanda, it was again investments in small hold, very vulnerable communities, very vulnerable communities. I was there, I saw it myself.
[29:28 - 29:42] They would get their, all of their plantations wiped out with the rains and the landslides, completely wiping out their plantations, their agricultural lands.
[29:42 - 29:49] And so they would be left without the source of income and they would have to offer themselves to work for others.
[29:50 - 30:05] And so helping them actually with new plantations on the slopes of the mountains, which actually helps both them having their source of livelihood, but preventing the future landslides in the mountains.
[30:06 - 30:17] And a range of other services. So providing, you know, the farmers with an understanding of which best techniques to use in terms of their agriculture practices.
[30:17 - 30:32] And I spoke to several of the farmers and ladies that are heads of households and really saw the difference that these investments have made in their lives and their children.
[30:33 - 30:46] Here in Georgia, we saw a different type of investment, which is also very important, early warning systems. I mean, believe it or not, some people might think, well, Georgia is in Europe, is in Eastern Europe.
[30:48 - 31:02] But the interesting thing is that the country hadn't yet invested in proper mapping of hazards or early warning systems, as an example.
[31:02 - 31:11] And they really did not have a robust hydrometeorological system in place of stations.
[31:11 - 31:18] A really significant gap, which everybody knows exists, for example, in Africa, because it's widely spoken about.
[31:19 - 31:29] We rely in developed countries in Europe, in the U.S. and others, on historical data that we have collected for decades.
[31:29 - 31:44] Weather data, which is really important and helping us be able to forecast and have warning systems in place. Well, in Africa, there's a massive gap.
[31:44 - 31:58] But, you know, here I was just visiting. And again, these investments hadn't happened here. So we are helping Georgia with these investments. They have massive floods happening.
[31:58 - 32:08] They have very large river banks because when the snow melts in the spring, it's a very mountainous country.
[32:08 - 32:20] When the snow melts in the spring, they have massive water flows coming down, which impacts significantly the farms and the livestock as well.
[32:20 - 32:35] So actually making investments, what it's called, gabions, so that when these massive water flows come down the mountains in spring, they actually don't destroy the farms.
[32:35 - 32:48] And unfortunately, this year, which was a shock to the population here of Georgia, they actually had unexpectedly landslides that killed people.
[32:49 - 32:58] And this was a little bit of a wake up call to the population here and brought a lot more understanding on the need for these type of investments.
[32:58 - 33:11] So just as an example, because, you know, sometimes we might think, well, Europe, it's Eastern Europe, you know, they are more advanced than other parts of the world.
[33:11 - 33:23] These type of investments, for example, in early warning systems, early warning information systems, there's gap in many parts of the world. And these are one of the type of investments that are much necessary.
[33:23 - 33:37] But as we said, it's this, it's helping the farmers. It's what we said, it's addressing energy poverty. It's addressing massive gaps in water supply to the populations as well.
[33:37 - 33:42] So it's a whole range of investments that are necessary to bring about resilience.
SPEAKER A
[33:43 - 33:48] Can I just add to that? All of the things that you mentioned are extremely important.
[33:48 - 34:10] I would say that the question about early warning systems is one that I would say is probably even more important than many of the others, because this is something that we could do something about quite quickly if we wanted to as an international community, because these systems exist.
[34:10 - 34:14] They are not terribly expensive and we have best practices.
[34:14 - 34:34] So this is definitely also one of the things that I will bring to the table at the upcoming COP meeting, where we will also be discussing how to implement the decision made in Glasgow at COP26 to double the global financing in adaptation measures paid for by different sources.
[34:34 - 34:46] I think it would be fantastic if we could agree that one of the main purposes, one of the things that we need to do right now is having these early warning systems in place everywhere on the planet.
SPEAKER B
[34:46 - 35:08] Exactly. And we fully agree with that and actually have joined the call of the UN Secretary General and others, yourself and others, to make sure that the Green Climate Fund is investing significantly in this area in the next four years.
[35:09 - 35:11] So this is a commitment of ours.
SPEAKER A
[35:11 - 35:33] I would be remiss if I did not also mention that sometimes the Climate Fund has gotten some criticism. I have to say that quite often when I visit developing countries and I speak to finance ministers and others in governments, they say, well, we like the Green Climate Fund because they help us.
[35:33 - 35:55] But we have to say, it's too bureaucratic. It's too difficult for us to get to the money and get to the investments. And very often I see where they're coming from because one of the reasons why they need funding and need help is because they maybe are not in a situation where they have the capacity themselves.
[35:56 - 36:20] I'm sure you've heard this many times. I think probably some of the criticism is fair, some is not, because you also need to make sure that the money spent are well spent and there are rules, countries like my own, that provide the funding. We obviously also expect of you to have certain criteria that you fulfill so that we're sure that the money actually goes to the right projects and people and all of that.
[36:20 - 36:31] But bottom line, we need the money to work faster and better for the people that they are meant for. What would you say to that?
[37:06 - 37:10] It doesn't make it better, though. It just makes the problem worse.
SPEAKER B
[37:10 - 37:25] No, but I'm not shying away from saying that there's a lot to be done in GCF based on my own assessment, which I also just shared with the board these days.
[37:25 - 37:51] But the first point that I'm trying to make is that as the shareholders or the owners and the people that are in the board of these institutions, it is important to have that broader conversation about what is it that is preventing resources from being accessed in a more simplified and tailored manner than is the case.
[37:51 - 38:17] And this is the reason why I think that we see this movement from developing countries, you know, being Bridgetown Initiative being one of them, but others of a really big call on let's talk about the international financial system and how do we equip the international financial system to be responsive to the needs of developing countries.
[38:17 - 38:32] So that, for example, when a small island state is hit by a major hurricane or another hazard, that we can respond quickly and in a tailored manner to what has just happened.
[38:32 - 38:52] So I just wanted to make that broader point. So what I see in the Green Climate Fund, and I have shared and I've shared my vision also at the UN Climate Ambition Summit early September, I want to first start with the really big positives.
[38:52 - 39:18] I see the fund as a quite unique tool that we have and one that I don't necessarily see in the architect in this broader landscape of financial instruments. Why? Because as we said, it's the scale. We have a significant scale of resources and scale of resources that are actually more flexible than what I have seen.
[39:18 - 39:33] And the private sector is the one telling us. I was also early September in our Global Private Investor Conference in Kenya and spoke to several CEOs of small companies, larger companies that we are supporting.
[39:33 - 39:53] And they themselves are saying that even though we are very bureaucratic and they would wish that we would be a little bit more responsive and simple, they themselves are saying there's nothing like that out there that actually responds to what we need, both in terms of grant resources for advisory or technical assistance.
[39:53 - 40:13] But then the capital itself, being able to take certain types of risk. I mean, we come in as junior equity, we come in as junior debt, we come in, provide guarantees. So the power of this, and we have very large resources as well for project preparation facilities.
[40:13 - 40:33] So when we hear out there people saying, well, there is no bankable pipeline of projects. So the fact that we have this incredible project preparation facility, very well resourced that can actually tackle that constraint is a big plus for the fund.
[40:33 - 40:47] I see a big plus the fact that we can actually work with a network of organizations, among which also the private sector, as I said, the ones that I've just visited in Kenya, that no other financial institution is actually supporting.
SPEAKER A
[40:47 - 40:49] And you also work with NGOs, right?
SPEAKER B
[40:49 - 40:50] Correct.
SPEAKER A
[40:50 - 40:58] Like Save the Children and others that are able to also help implement some of your projects and get money from you.
SPEAKER B
[40:58 - 41:11] So all of that network of organizations that we are partnering with, that is a network of organizations that have actually not benefited from resources before, from climate finance resources.
[41:11 - 41:19] So all of that I see as extraordinary pluses and speak to the unique potential and role of the Green Climate Fund.
[41:19 - 41:37] But it is true that the processes, we need to look at the processes and we cannot have a one size fits all approach because the capacity of countries, again, just for the broader listeners to understand.
[41:37 - 41:52] So I hear a lot from the small island developing states like the Pacific and the Caribbean. We are talking about islands whose population is 10,000, 20,000, 50,000.
[41:52 - 42:03] You know, I come from a very small town in Portugal. It was 20,000 people when I left.
[42:05 - 42:10] And so I think we need to put things in perspective.
[42:10 - 42:26] I mean, we need to think these people and they talk about capacity, the fact that they don't have the capacity that other countries have to be able to meet all of the requirements and more requirements and more requirements.
[42:26 - 42:32] So we really need to be responsive, understand that it's not a one size fits all.
[42:33 - 42:49] Which, again, is a little bit the issue that exists in the broader financial institutions is if we really looked carefully at our policies and procedures and processes and make them a little bit more tailor made.
[42:49 - 42:59] That, you know, if we are talking about smaller investments and when we talk about environmental and social safeguards, they are on the lower end of the scale in terms of risks.
[42:59 - 43:04] Do we really have processes that are adequately simplified and responsive?
[43:05 - 43:16] And also, but then I also want to say that, and this I also discussed with the board, and we need to look at our internal processes in the institutions.
[43:16 - 43:30] You know, are we making things a lot more complicated in terms of of templates and reports and requirements and and committees that we might not necessarily need to?
[43:30 - 43:38] And therefore, you know, we can we can save costs and speed up access to the resources.
[43:39 - 43:53] That's my commitment at the Green Climate Fund is is to really look carefully at what's the right balance, as you said, because it's not that, you know, we have to be judicious in terms of how we use the resources as well.
[43:53 - 43:57] But I think we are too much tilted towards one side at the moment.
SPEAKER A
[43:57 - 44:20] I totally agree. And I really appreciate your commitment in this. I think the Green Climate Fund with the reforms that you are putting in place now can also be a front runner and be an institution that others look to for for inspiration, because, as you said, this is a general problem in the international investment community.
[44:21 - 44:37] So the reform process of the MDBs, the World Bank being probably the most important one, is hopefully also going in this direction. Definitely, I personally serve as Denmark's governor to the World Bank.
[44:37 - 45:01] And it's been my main argument in the process that the previous months that we need, first of all, to to be able to generate more investments. So that's not just more money in the bank. It's also making the bank able to generate private investments.
[45:01 - 45:21] We need to make the bank able to be the risk taker, as you mentioned, the Green Climate Fund also is, meaning that what the bank actually does is it makes it possible to make investments where the market cannot do it, because there's risks and there will be risks in these types of investments.
[45:21 - 45:48] And thirdly, we need it to be possible for the ones that need the money the most to actually access the money. And it goes without saying that a small state, island state like you mentioned, that's not a ministry of climate and energy with 50 lawyers that can full time work on applications for international organizations. It's just not there. So we need this to work in a different way.
[45:48 - 45:59] Mathilde, thank you so much for this excellent conversation and keep up the good work. Denmark definitely supports you and will continue to.
SPEAKER B
[45:59 - 46:02] Thank you very much, Minister. Thank you. I appreciate it.
SPEAKER A
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