First CAF Participation in UN Climate Change Convention Pre-COP

The event was held October 8–10 at San Jose’s Costa Rica Convention Center, and was attended by government officials, as well as representatives of companies, civil society organizations and multilateral agencies.  The key topics of this year’s Pre-COP25 were sustainable mobility in cities, nature-based solutions and the blue economy. According to the organizers, the event had to include cross-cutting issues, including human rights, gender and funding.

CAF was represented by members of the Sustainability, Inclusion and Climate Change department—part of the bank’s Sustainable Development Vice President’s office—Nara Vargas, María Moreno and Cecilia Guerra. The delegates participated in the forum “The Role of the Financial Sector in the Climate Agenda, which was organized by the Entrepreneurial Partnership for Development (AED) and other associates, and featured a keynote presentation by Lawrence Pratt of INCAE and a high-level panel featuring Javier Manzanares of the Green Climate Fund, Valery Hickey of the World Bank and Mauricio Chacón of the Central American Economic Integration Bank, moderated by Silvia Charpentier.  The forum was opened by Costa Rica’s Minister of Environment Carlos Manuel Rodríguez and was attended by Minister of Economy Victoria Hernández, as well as managers of several local banking associations and insurance companies.  The forum’s main goals included raising awareness among senior managers of financial institutions and insurance companies about the role of the sector in climate finance, as well as presenting international climate risk management initiatives and opportunities—including access to funds—and submitting a declaration of commitment by financial institutions to strengthening affirmative actions with a climate change approach.

“Financial institutions must implement their Environmental and Social Risk Analysis (ESRA) Systems and start from the inside out to implement them,” Vargas said.  “ESRAs will allow them to analyze climate, physical and systemic risks, which should be key in deciding whether or not to finance a project.”  Vargas also said that CAF is currently devising a project—to be presented to the GCF—in the amount of USD 95 billion in financing and USD 5 million in technical cooperation for local financial institutions across six Latin American countries, and urged Costa Rica to join this type of initiatives soon.

CAF also held a side event with the Costa Rican National Stock Exchange (BNVdeCR), in which participants discussed the challenges of climate finance in Latin America, and capacity building in supply and demand.  The event was attended by José Rafael Brenes (BNVdeCR), Jessica Jacob (GCF), Carlos Ruiz-Garvia (RCC–UNFCCC) and Cecilia Guerra (CAF), who participated as panelists, with Nara Vargas moderating and a keynote speech by CAF’s María Moreno.

The BNVdeCR representative stressed the importance of bringing concrete green financing solutions to customers and other parties outside the scope of funding and multilateral institutions.  Meanwhile, Jacob emphasized GCF’s various financing instruments, such as the Project Preparation Facilities, as well as other resources, including Readiness funds, to support countries in meeting their particular national commitments. 

Ruiz-Garvia explained the role of the Secretariat of the Convention and particularly the Regional Collaboration Centers in providing guidance and implementation tools, as well as access to international funding opportunities.  He also delved into tools such as the Needs Based Finance Project (NBF), through which the Secretariat seeks to facilitate climate finance to support the needs identified by developing countries in terms of implementing priority actions in climate change mitigation and adaptation. 

CAF's Cecilia Guerra introduced the issue of green bonds and other themed bonds, and how the bank facilitates access to the most important environment and climate change funds, being an accredited agency of the Adaptation Fund, the GEF and the GCF.  The panelists answered questions from the moderator and interacted with each other in a lively discussion about the challenges of obtaining funding in the best and most expeditious way.

The experts concluded that concessional financing is dwindling and that countries would benefit from partnering with NGOs and other institutions and agencies, such as CAF, in order to strengthen their ability to access climate credits in the best conditions and terms.