NDF - Financing for climate change and development projects

Finnish Development Minister Skinnari sees strong role for agile risk takers like NDF in global climate financing future

Photo: Marjo Koivumäki
Photo: NDF
Illustration: Sanna Turunen

Finland targets ambitious net-zero-carbon energy system by 2035

In welcome remarks on the occasion of NDF’s 30th anniversary celebration, Finland’s Minister for Development Cooperation and Foreign Trade, Ville Skinnari offered his congratulations while stressing the importance of innovative financing in further combating climate change. Despite its relatively small size, Skinnari reflected on NDF’s ability to play an outsized role in the global financing arena as an active early-stage risk-taker, particularly in private sector adaptation.
NDF well-positioned with positive evaluation
NDF has over the past ten years built a strong climate financing role focused on innovation, project preparation and private sector de-risking. In this context, the Minister drew attention to the recent joint Nordic evaluation of NDF, as a clear validation of the relevance and added value that NDF has been able to build into its climate change mandate.
In solving the climate challenge globally, Skinnari stressed the need for a multi-stakeholder approach where big multi-lateral players like the Green Climate Fund and World Bank continue to provide financing at scale. But at the same time, smaller, agile actors like NDF will be needed to finance the risk that others can’t take on.
“There is a global shortage of bankable climate projects,” says Skinnari. “And NDF plays a much-needed role in the design and development of private sector adaptation projects, adding: “This is a role, I believe NDF should focus on even more.”
Focus on Finland
In his remarks, Skinnari also gave the 100 guests some local context, by introducing Finland’s ambitious goal of a net-zero-carbon energy system by 2035, which Skinnari sees the country on track to achieving.
“Big industry in Finland is responding swiftly to this target,” Skinnari confirmed in a follow up interview, “with many sectors already preparing their individual low-carbon road maps.” These roadmaps will set forth industry-level actions to reduce emissions as well as respective strategies for renewal. On top of this, Skinnari sees the road maps as a way to promote international growth by providing estimates of the export potential of viable technology solutions.
Finnish business stepping up internationally
In response to the growing global need for low-carbon solutions, Finnish companies also plan to incorporate carbon reduction into their export and international growth programs, where Skinnari believes they have a lot to offer.
Strengthening adaptation solutions, also in the private sector, is a top objective for Finland, which plans to step up its international climate action, including an increase in climate financing. “We also plan to use innovative financing, including through our development investment policies, to mobilize private financing to support climate goals,” added Skinnari.
“We all know the seriousness and severity of global climate change,” Skinnari told the audience, “and, as a policy maker, my role is to promote Finnish know-how and innovation for sustainable solutions.”
Multi-sector approach to Paris with both mitigation and adaptation
The Minister confirmed the importance of a multi-sector approach in implementing the Paris Agreement and stressed the role of government in ensuring effective co-operation among the sectors as well as consistency in their respective approaches.
Developing countries need strong financial support to tackle mitigation and even more so to meet the growing adaptation challenge. On the question of adaptation versus mitigation, Skinnari pledged equal weight to both, saying: “In line with the Paris Agreement, climate resilience and low-emission development are both cross-cutting objectives of Finnish development policy and cooperation.”
Need for continued Nordic cooperation
Skinnari also touched on the importance of Nordic cooperation as a strong regional driver. “As Nordic governments, we are all active in many international climate fora. But the global climate financing architecture also needs a strong Nordic innovator that can act as a platform to bring us together, and NDF as its positive evaluation attests can play that role.”
Building on this theme, the Minister also accentuated that a strong Nordic innovator like NDF could be even stronger in the future with the continuing good commitment of all the Nordic governments in boosting the fund’s financial base.
Written by Laurel Colless