NEWS – Azerbaijan, host of the 29th Conference of Parties to the United Nations Framework Convention on Climate Change (COP29), introduced the ‘Climate Finance Action Fund’.

HIGHLIGHTS

About the Fund

• Capitalization:
  • Funded by contributions from fossil fuel-producing countries and companies in oil, gas, and coal sectors.
  • Azerbaijan is a founding contributor.
• Launch:
  • Part of a package of 14 initiatives within COP29’s thematic days.
• Nature:
  • A catalytic public-private partnership fund.
  • Aims to mobilize the private sector and de-risk investments.

Special Facilities

• Disaster Response:
  • Includes concessional and grant-based support for rapidly addressing natural disaster impacts in developing countries.
• Operationalization:
  • Fund becomes operational after the initial fundraising round, targeting $1 billion capital and commitments from 10 contributing countries.

Capital Allocation

• Developing Countries:
  • 50% of capital directed towards climate projects in developing countries (mitigation, adaptation, R&D).
• Nationally Determined Contributions (NDCs):
  • 50% allocated to support countries in meeting future NDCs to maintain the 1.5°C temperature target.
• Rapid Response Funding Facility (2R2F):
  • 20% of revenues from investments deposited into 2R2F for highly concessional and grant-based support.

Headquarters

• The fund will be headquartered in Baku, Azerbaijan, with its secretariat.