The case for finance actions

The rapid growth in cooling demand combined with the long lifetime of the equipment give rise to important challenges that must be addressed through both short-term and long-term interventions. While it is important to develop innovative technology and new integrated-system solutions, there is an encouraging momentum to act now and start shifting the trend and avoid locking-in expensive, inefficient and polluting infrastructure.

Development Financial Institutions (DFIs) –international, multilateral, national and regional– recognize that scaling up transformational investments in cooling that meet the development goals of countries without worsening climate change requires a deeper and collective efforts from all stakeholders. DFIs have committed to help governments who put ambitious cooling strategies and actions in their revised Nationally Determined Contributions (NDCs).

DFIs, which represent some of the largest providers of public finance for sustainable development, have a long history of supporting developing countries in their efforts to translate the goals of the Paris Climate Agreement, the Kigali Amendment and the SDGs into meaningful country-level targets, policies, programs and finance the projects needed to achieve them. They provide policy advice on long-lasting economic pathways and can leverage multiple times their investment from private capital. For instance, Multilateral Development Banks (MDBs) committed over $43 billion to climate finance in 2018–up more than 22% from 2017.

DFIs will be crucial in accelerating and scaling up efforts to achieve sustainable cooling. Their work with governments and subnational authorities needs to quickly evolve to provide maximum support, mobilize private financing and impact on the transformation that is needed to achieve efficient, climate friendly cooling for all that are at risk of heat stress.

Framework for finance actions

This framework for financial action on sustainable cooling highlights how DFIs can act at the institutional level and at the country level, focusing on four main areas in various sectors relevant to cooling, e.g. transport, agriculture, health, education, energy and urban:

• Advisory on policy, regulation and planning;
• Financing solutions, business models and other enablers of investment transactions;
• Technical assistance to the private and public sector;
• Risk insurance and guarantees

The examples set out in the table below illustrate some of the generic actions that DFIs can take. Note that the listed actions will not be equally relevant for each DFI, since each DFI typically has its own focus and different client groups. The actions listed as ongoing have been pursued by at least one DFI.