OPEC Fund Climate Finance Report 2024

The OPEC Fund’s inaugural Climate Finance Report discusses the imperative of climate action in addressing development challenges. It underlines the institution’s strong commitment to tackling global climate challenges through strategic planning as well as the financing of both mitigation and adaptation activities. The report provides an overview of the global impacts of climate change, estimates the climate financing required to limit global warming to no more than 1.5°C above pre-industrial levels by the latter half of the 21st century, and in this context, highlights the progress made so far by the OPEC Fund in fulfilling its commitment to climate finance.

Read the Climate Finance Report here: https://publications.opecfund.org/vie...

The OPEC Fund has prioritized the climate challenge to benefit from its resources and institutional capacity and will fully integrate climate assessments into all operational activities. This approach is continuously enhanced to align with the evolving global landscape, which advances various climate resilience initiatives to reduce emissions and prepare for the adverse impacts of climate change, particularly in the Global South. The report documents the OPEC Fund’s climate agenda as demonstrated through its Climate Action Plan and the annual climate finance accounting initiative.

In 2022, the OPEC Fund crafted its Climate Action Plan to drive its climate agenda in a focused manner. The plan details the institution’s climate finance goals and approach to enhancing climate finance. A major anchor of the plan is the OPEC Fund’s commitment to achieve at least 25 percent of climate finance by 2025 and increasing that threshold to 40 percent by 2030. This report captures the key features of the Climate Action Plan as well as the strategy for its implementation.

The strategy focuses on three functional categories namely a) climate finance and energy mitigation, b) food security and climate adaptation, and c) nature-based solutions, in other words, the protection of ecosystems and biodiversity. The OPEC Fund plans to expand its climate finance portfolio, focusing on innovative solutions and partnerships to reach its ambitious strategic goals. The approach and investments will be targeted, in keeping with the OPEC Fund’s model, in close collaboration with peer MDBs and key stakeholders, both of which are crucial to drive global efforts to combat climate change.

In 2021, the OPEC Fund introduced an annual accounting of its climate finance efforts. The latest report provided a comprehensive review of the institution’s annual climate financing for the periods 2018-21, 2022 and 2023. The report also shows that the OPEC Fund has already achieved its 25 percent climate finance target well ahead of the 2025 deadline, reaching 33 percent in 2022 and 34 percent in 2023.

Furthermore, this report provides insights into the sectoral and geographical distribution of the OPEC Fund’s climate financing. It showcases select projects aimed at achieving the climate finance goals and analyzes their effectiveness in contributing to mitigation and adaptation targets in different partner countries. The joint MDB methodology for tracking climate change adaptation and mitigation is applied to assess the impact of OPEC Fund-supported projects and to calculate their contributions to climate mitigation and adaptation. An inventory of OPEC Fund projects contributing to climate finance is provided in the Annex.