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Investments that are sustainable from an environmental and climate perspective
Climate change is a very real threat which affects everyone, everywhere. For us, it is about investing in order to reduce CO2 emissions, manage climate risks and limit the impacts of climate change. It is about more green investments which help to reduce poverty through green and sustainable economic growth.

Investments that contribute to the mobilisation of private capital
Traditional aid will not be enough to finance Agenda 2030 and the implementation of the Paris Agreement. New partnerships will be needed for this, and mobilising private capital for developing countries will be pivotal both to meet existing needs and to accelerate the work relating to climate change.

Outlook

Climate transition must happen now!

Climate change is continuing unabated and developing countries are undoubtedly the hardest hit. In order to strengthen the resilience of societies, further investments will be needed in adequate and secure energy supply systems based on renewable energy. As the climate has already been affected, greater investment in adaptation measures will also be required in order to strengthen societies and people.

Build resilience to climate change

The turning point for slowing down climate change has already been passed, and measures are now urgently needed in order to adapt to both present and future climate change. Climate-related disasters are occurring more and more regularly and having more far-reaching consequences. There is now a greater risk that the num-ber of climate refugees will increase significantly.

The funding being given to the affected countries to adapt to these changes is not enough and does not pri-oritise the countries that are in greatest need. Even if mea sures and planning for adaptation to climate change are increased, funding and implementation will still lag be-hind. The 15 most vulnerable countries received less than six percent of global funding for climate adaptation in 2019.

At the COP26 global climate summit in Glasgow, the issue received considerable attention, and the need for additional financing in order to achieve the goals of the Paris Agreement was discussed. A positive movement is under way which is being embraced by more and more governments, central banks, investors and companies. For example, the World Bank’s reconstruction package includes a climate dimension. A stronger focus on green investments has resulted in new tools and collaborations between development finance institutions and private investors. During COP26, almost 500 global financial services companies agreed that USD 130 trillion, around 40 percent of the world’s financial assets, should be managed in line with the Paris Agreement and the goal of a maximum warming of 1.5°C.

Investments in renewable energy and access to electricity need to increase

Nearly one billion people around the world, half of whom live in sub-Saharan Africa, have no access to electricity. The lack of reliable electricity is partly due to the fact that too little electricity is produced in the formal energy sector, and partly due to the inadequate development of national distribution grids. This forces individuals and companies to have their own diesel generators as a back-up, which both costs money and is inefficient. The lack of electricity also means that people are lighting their homes using kerosene and cooking over an open fire or on a wood-burning stove, which is harmful to both health and the climate.

Lack of access to electricity is also an obstacle to the health and economic empowerment of girls and women. When women need to walk long distances to collect firewood, they are exposed to physical risks and it also consumes their time – time that could be spent on edu-cation or paid work instead. In addition, they are more affected by the negative health impacts that stem from burning wood indoors.

In order to electrify rural areas, more and more money is being invested in smaller local electricity distribution grids, off-grids, which complement the electricity that is distributed via the national grid. Off-grid networks enable households, villages and communities to access locally generated and reliable energy.

There is great potential to produce renewable energy. Africa has good conditions as regards wind and hydro-power. In Kenya, for example, energy production is mainly derived from renewable energy sources. However, demand considerably outstrips production, and invest-ments will be essential in order to scale up production. The extreme fluctuations in weather conditions have for example meant that wind farms need to be adapted to withstand stronger winds, and that small hydropower plants must be adapted to handle larger volumes of water.

By investing at an early stage with sustainable capital and by taking risk, development finance institutions such as Swedfund have an important role to play. Based on an understanding of what private investors need, as well as extensive experience and expertise in sustainable in-vestments, development finance institutions can identify trends and translate them into new investment areas and structures.

Investments that are sustainable from an environmental and climate perspective
Climate change is a very real threat which affects everyone, everywhere. For us, it is about investing in order to reduce CO2 emissions, manage climate risks and limit the impacts of climate change. It is about more green investments which help to reduce poverty through green and sustainable economic growth.

Investments that contribute to the mobilisation of private capital
Traditional aid will not be enough to finance Agenda 2030 and the implementation of the Paris Agreement. New partnerships will be needed for this, and mobilising private capital for developing countries will be pivotal both to meet existing needs and to accelerate the work relating to climate change.

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