Climate change is the ‘single greatest threat to the livelihoods, security and wellbeing of the peoples of the Pacific’, according to a report by the Pacific Islands Forum Secretariat. But the region is showing leadership and there are opportunities for Papua New Guinea enterprises to access finance for climate-related projects.

Climate change is threatening many Pacific Islands. Source: Pacific Island Forum Secretariat

Papua New Guinea is already accessing international climate finance from a number of sources, including the Kyoto Protocol Adaptation Fund, the Climate Investment Fund and other multilateral and bilateral funds, according to Exsley Taloiburi, Acting Climate Change Finance Adviser for the Pacific Islands Forum Secretariat (PIFS).

He says an area of particular interest to business in PNG is the Green Climate Fund. Within that Fund there is a dedicated ‘Private Sector Facility’ intended to support private sector investments related to climate change.

‘US$200 million will be allocated for a Pilot Program to support micro, small and medium enterprises, in part targeted at Small Island Developing States and Less Developed Countries. The deadline for the first request for proposals is August 30 this year.’

Taloiburi says half of the total resources made available under the Global Climate Fund will be for adaptation, while half will be for mitigation.

He says existing or potential accredited entities, or qualified financial institutions, are invited to propose approaches that ‘deploy financial solutions establishing private equity, guarantee, debt or grant projects/programmes.’

Adaptation and mitigation

Rising water levels are a challenge, especially for smaller Pacific Islands. Source: PIFS

Taloiburi says half of the total resources made available under the Global Climate Fund will be for adaptation, while half will be for mitigation. ‘For the adaptation window, half of that will be specifically for Small Island Developing States, Less Developed Countries and Africa.’

He describes it is ‘positive progress that efforts are being made to simplify templates for small-scale projects and readiness support.

‘This is critical to addressing the vulnerability of Small Islands Developing States.’

Leadership

A report by the PIFS, Opportunities to improve access to climate change finance, comments that the ‘Pacific is showing leadership’ in ‘progressing’ the Paris Agreement, an international compact signed last year which is designed to deal with greenhouse gases emissions mitigation, adaptation and finance. It is set to come into force in 2020.

PNG has a policy of being fully renewable in its energy use by 2030.

However, Taloiburi says there are areas where PNG can improve: ‘developing internal institutional and human capacity so as to be able to absorb and effectively implement projects’.

There also needs to be ‘financial management systems to meet the fiduciary standards required for direct access to resources from the Green Climate Fund,’ he says.

Fully renewable

PNG has a policy of being fully renewable in its energy use by 2030. Taloiburi believes the country has a major focus on reducing fossil fuel emissions in the electricity generation sector.

‘The target was for 100 per cent renewable energy by 2030, contingent on funding being made available. In addition, PNG will improve its energy efficiency sector wide and reduce emissions where possible in the transport and forestry sectors.’

‘Energy efficiency initiatives could be encouraged by policy decisions.’

Taloiburi says the PNG government in its recent submissions has, however, ‘made clear that little domestic finance is available’—although government assistance will be provided where possible. He says private finance could be made available especially for the mining and oil and gas sectors.

‘Energy efficiency initiatives could be encouraged by policy decisions. However, the transition to renewable energy in the electricity sector would need to be mostly financed from external sources.  Gaining access to mitigation and adaptation project funding from the GCF would be beneficial to achieving progress.’

Cumbersome

Taloiburi acknowledges that in the past Pacific Island Countries have found it ‘difficult and cumbersome’ to navigate the requirements of gaining access to different funding sources.

The largest global climate change fund, known as the Green Climate Fund (GCF) … has an initial resource mobilisation of US$10.3 billion.

‘This is due to a number of issues, including lack of capacity and the varying strength of national institutions and public financial management systems.’

Taloiburi says the PNG government has set up a formal mechanism to deal with climate finance. ‘In regards to the largest global climate change fund, known as the Green Climate Fund (GCF), which has an initial resource mobilisation of US$10.3 billion, PNG already has a National Designated Authority (NDA), which is the Office of Climate Change and Development.’