In the bid to achieve the 2030 agenda, the Zambian government has overwhelmingly, welcomed the 160 million euros worth in funding from the Dutch Government through Dutch Fund for Climate and Development (DFCD) working with the private sector to catalyse over 500 million euros in additional funding for sustainable bankable projects across the world.
The funding comes through the consortium partners World Wide Fund for Nature (WWF) and SNV Netherlands Development Organisation (SNV) with Dutch Development Bank (FMO) and Climate Fund Managers (CFM) which was launched under the theme ‘Addressing Climate Risks to Business and Development’ under the patronage of Ministry of Finance.
The fund, on one side, is looking at landscape level financing such as the Kafue Flats in the Kafue Flats Joint action Group which is already receiving support from WWF and DFCD, while assessing the risks and pressures that exists as well as combining the future scenarios around climate change and water risks. It aims to reinforce the capacity building of the flat. The other part of the funding is said to be channeled to prospective projects which will be granted 1 to 20 million US Dollars worth of ticket size per project with interest rate between 10 to 20 percent.
WWF Netherlands Bankable Projects (Africa Focus) Lead, Keiron Brand says there will be rigorous financial and social-environment criterion assessments ahead of any projects and DFCD will work closely with the projects for the next 10 to 15 years. The DFCD is expected to run till 2037 which will give flexible timelines to the projects. This is to ensure that investment horizons are not too short and taking account of how the assets will become bankable with time.
The Dutch investors are in light of the need for solving the currency risks to ensure everything is within local contexts. DFCD, therefore, hopes to firstly invest through grants and technical assistance as a nonreturnable facility to understand the projects’ business model and financial returns. DFCD also hopes to venture in equity and debt to potentially raise more funds through selecting the right financial instrument and process for the projects in the hope to benefit the Zambian economy and the people while preserving the environment.
Climate change action as a business perspective through the funding is aiming to shift the market both private and public to more sustainable practices with the full knowledge of the livelihoods of the local people and understanding what drives the extractive practices such as deforestation rates, and what type of industries exist to create new markets and opportunities with more sustainable practices. When looking at Charcoal, Mr Brand says there is a need to look at sustainable charcoal and electrification in the longer turn for most areas that are charcoal dependent. He hopes the projects can cause a movement towards an achievable future and is not disruptive but supporting people’s lives which can be through community farming funds, new industries, and technology.
DFCD will not only support both mitigation and adaptation, the Fund will also improve the wellbeing, economic prospects, and livelihoods of vulnerable groups – particularly women and children – across the targeted developing countries and will be an incentive to drive the agenda for climate action.
The fund is available to the private sector, public sector, and civil societies.
Present at the launch of the DFCD yesterday, the Permanent Secretary, Mrs. Joyce Phiri Sundamo Speaking on behalf of the Minister of Finance, Hon. Bwalya Ng’andu emphasized that in view of the real-time effects of climate change on the entire economy, business entities, and communities, the initiative will bring excellent opportunity for the country to embark on an informed science-based process in supporting the developments of bankable solutions to nature and business sustainability for companies and industries affected by nature loss and climate change. The Ministry of Finance will soon be presenting a bill to parliament in line with the Climate Change policy in hope to liberalize the energy sector which ZESCO has seen enjoyed as a monopoly. The ministry gives assurance of exemptions through the treasury to encourage a favorable environment.
The World Economic Forum highlights that fighting climate change could deliver 26 trillion US Dollars to the global economy by 2030 and as such, the funding is one of the ways the Zambia, Kenya and Paraguay with DFCD pilot projects could propel in the Climate-friendly prosperity.