The European Bank for Reconstruction and Development (EBRD) and the Green Climate Fund (GCF) have announced that they are scaling up their green financing and strengthening their cooperation by launching a $ 1bn “High impact programme for the corporate sector”.

The programme has been designed to facilitate a transformational shift within the energy-intensive industries, agribusinesses and mining sectors of Armenia, Jordan, Kazakhstan, Morocco, Serbia, Tunisia and Uzbekistan. It will promote the uptake of low-carbon technologies in the industrial sector and it is the GCF’s first at-scale engagement in the sector.

EBRD president Odile Renaud-Basso and GCF executive director Yannick Glemarec signed the agreement for the programme on June 2.

The programme combines $252.5mn of concessional finance from the GCF with $757.5mn from the EBRD and other co-financiers, and an additional $5.53mn from the GCF and $1.36mn from the EBRD for technical assistance and policy dialogue.

Critical financial barriers to the uptake of climate technologies across the industrial, agribusiness and mining sectors contribute to the higher costs that early adopters of technologies face due to a lack of access to suitable financial products with adequate pricing, the EBRD said.

The programme will support the corporates in formulating a low-carbon pathway, along with a concrete action plan of realistic investment and a strategic review of their business model as part of their corporate climate governance undertakings. 

Overall, the programme is expected to reduce emissions by 17.2mn tCO2 over a 20-year asset lifetime, which is equivalent to avoiding one year’s worth of energy-related CO2 emissions by a country like Croatia.

The EBRD’s Renaud-Basso said: “We are very happy to strengthen the cooperation with our longstanding partner, the GCF, to achieve sustainable development across our regions. It is a great example of how organisations can work together to address environmental challenges. Companies face a range of challenges related to identifying, prioritising and implementing low-carbon projects, and support from the EBRD and the GCF will be crucial.”

GCF executive director Yannick Glemarec said: “This USD 1 billion initiative demonstrates how GCF’s partnership with EBRD is driving innovation and investment in climate action at scale in developing countries. This programme covers seven countries and serves as a model in paring back emissions in hard-to-abate industries. It will facilitate technology transfer and place climate change at the centre of corporate strategy.”

Recognising the scale of investment necessary to limit global temperature rise to below 2 degrees Celsius, the GCF was created to support developing countries in mitigating and adapting to the challenges posed by climate change.

The EBRD and the GCF have been working together since 2017.