The World Investment Report issued by the United Nations Conference on Trade and Development (UNCTAD) included the Sharm El- Sheikh Guidebook for Just Financing, which was issued by the Arab Republic of Egypt during “Finance Day” at COP27, as one of the most prominent policies and documents issued to guide and strengthen investment policies in 2022 and to promote climate action by establishing principles to reduce the risks of climate investments.
The report stated that the Sharm El- Sheikh Guidebook for Just Financing was issued by the Government of Egypt in coordination with a wide range of development partners and relevant parties, including the UNCTAD, to promote climate finance and facilitate investments that achieve climate action goals, referring to the High Level Forum on Global Investment and Trade for Climate Transformation (co-organized by UNCTAD and the World Trade Organization) which discussed how the international investment and trade regimes can align with the Paris Agreement and how they facilitate the achievement of climate goals.
Over the course of almost a year and a half, the Ministry of International Cooperation, in coordination with more than 100 development partners and relevant entities, worked on preparing the Sharm El-Sheikh Guidebook for Just Financing, with the aim of stimulating climate-related financing, strengthening multilateral cooperation efforts and international partnerships, and developing an international framework for innovative financing. This in light of the challenges facing developing countries and emerging economies, especially Africa, in obtaining financing to achieve their climate ambitions in the backdrop of the exacerbation of the climate financing gap, especially in post-pandemic.
Many relevant parties contributed to the preparation of the guidebook including multilateral and bilateral development partners, international financial institutions, the UN agencies, the private sector, think tanks and research centers. This includes: the World Bank Group, the African Development Bank (AfDB), the UN, UNCTAD, Organization for Economic Co-operation and Development (OECD), USAID, Convergence, Climate Investment Funds (CIF), Citibank, Glasgow Financial Alliance for Net Zero (GFANZ), Bill and Melinda Gates Foundation, UNICEF, European Bank for Reconstruction and Development (EBRD), International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), Islamic Development Bank (IsDB), European Investment Bank (EIB), International Fund for Agricultural Development (IFAD), and the Japan International Cooperation Agency (JICA) and many others.
H.E. Dr. Rania A. Al-Mashat, Minister of International Cooperation, said that the main objective of the Sharm El- Sheikh Guidebook for Just Financing is to highlight that climate and development cannot be separated from one another, by promoting the concept of just financing and the best ways to benefit from it through country platforms. H.E. noted that the guidebook includes a unified definition for just financing that takes into account the historical responsibility for climate change while ensuring just access to financing in terms of quality and quantity to support flexible development paths.
Al-Mashat explained that the Nexus for Water, Food and Energy platform, the NWFE program is a practical example of the principles and concepts of the Sharm El-Sheikh Guidebook for Just Financing, by launching a national platform based on state ownership, strengthening Egypt's commitment to climate action, pushing efforts to mobilize innovative financing mechanisms that attract sector investments and catalyzing debt swap mechanisms, to advance climate action.
The guidebook, which is being launched for the first time, includes 12 guiding principles for achieving just access to climate finance, and serves as a guiding framework to stimulate partnerships between all relevant parties, especially the government and private sectors, to advance the process of transformation towards a green and sustainable economy. It also contributes to bridging the information gap for governments as well as investors, enhances efforts to mobilize private capital, scale up climate investments, and reduce risks associated with investments in developing countries, by driving innovative financing and stimulating private sector participation.
The guidebook witnessed wide applause from the heads of international organizations such as the President of the World Economic Forum (WEF), the President of the AfDBk, the Co-Chair of the GFANZ, the President of the Rockefeller Foundation, the President of the CIF, the Vice President of Citibank, the Assistant Secretary-General of the United Nations and the Regional Director of the UNDP, and other officials who emphasized its importance in promoting the principles of just financing and stimulating international cooperation to expand innovative financing mechanisms.
The Sharm El-Sheikh Guidebook for Just Financing is based on 12 main principles that can be applied to stimulate climate finance. These principles serve as a guiding framework for stimulating partnerships between all relevant parties, especially the public and private sectors, to push the transition towards a sustainable green economy, as follows:
1. Recognize, respect, and take concrete action to support developing countries’ Right to Development and Industrialization through equitable pathways.
2. Align global climate mitigation and adaptation targets with national development objectives.
3. Support and fund the creation of enabling environments, and strengthening of technical capacities that are aligned with climate goals.
4. Require strong institutional governance mechanisms at the international and national levels.
5. Require robust transparency and accountability mechanisms.
6. Is anchored on balanced multi-stakeholder participation and collective agreements that enhance international, regional, and local coordination and commitments.
7. Require global stakeholders to actively consider and take progressive action to address historical disparities and responsibilities to meet climate needs.
8. Mainstream the concept of Just Financing across all financial stakeholders at national and international levels.
9. Ensure the right to quality and quantity climate finance.
10. Address access, affordability, and resource allocation bias.
11. Promote “Additionality”.
12. Address the loss and damage caused by climate change.
Sharm El-Sheikh Guidebook for Just Financing link:
https://guidebookforjustfinancing.com/
UNCTAD Global Investment Report link:
https://unctad.org/system/files/official-document/wir2023_en.pdf