Civil society groups tell Green Climate Fund: No to KEXIM and export credit agencies
SONGDO, Republic of Korea, 11 October 2016 – Civil society groups led a protest action outside the headquarters of the Green Climate Fund (GCF) a day before the official start of its Fourteenth Meeting of the Board, to voice their opposition to the accreditation to the GCF of export credit agencies (ECAs) like the Korea Export Import Bank (KEXIM).
The Green Climate Fund is a fund in the United Nations Framework Convention on Climate Change (UNFCCC) that aims to provide climate finance for adaptation and mitigation efforts of developing countries. Countries have currently pledged US$10.3 billion to the GCF, and the Fund has the goal to mobilize US$2.5 billion of those funds in projects by the end of 2016. Funding is coursed through accredited entities (AEs), and institutions must apply for accreditation in order to prove that they are capable of managing funding and safeguarding projects or programs against environmental and social risks.
KEXIM’s application for accreditation was up for decision during the previous board meeting, and civil society groups, including Korean civil society, also held an action during that meeting against their accreditation. The decision was eventually deferred to the fourteenth meeting of the Board.
KEXIM provided US$3.8 billion for overseas coal-fired power plant projects from 2007-2014, and ranks fifthamong the world’s largest institutions in public finance for coal. In comparison, it has only made available US$2.9 billion for climate change-related projects over the last 25 years, since 1991.
The Republic of Korea is also the second largest in terms of export credit support for coal projects. It is 7th in the world for coal consumption, depending on coal-fired power plants for up to 40% of its electricity needs. Korea’s new climate targets as of June 2015 in fact propose an increase of emissions between 2020 and 2030. Although targets for 2030 appear as a 15-31% reduction from a business-as-usual emissions pathway, but they actually translate to a 4-31% hike from 2-5 levels.
“With climate change reaching levels of a planetary emergency, the GCF cannot afford to shirk from remaining true to its mandate of mobilizing financial resources for a low carbon and sustainable future,” says Lidy Nacpil, coordinator of Asian Peoples Movement on Debt and Development and Southern CSO Active Observer to the GCF Board. “This mandate has already been threatened by the Fund’s earlier accreditations of entities implicated in dirty energy funding such as HSBC and Crédit Agricole.”
As an export credit agency, KEXIM is also meant to provide local jobs and economic growth to its home country.If accredited, this would come into conflict with the GCF’s mission of promoting country ownership and local sustainable development benefits, among others.
“The accreditation of KEXIM would be an act with dire, tragic consequences, especially for developing peoples for whom this very Fund was created and who bear the harshest impacts of a crisis they did not cause,” Lidy Nacpil adds. “We call on the GCF to deny the application for accreditation of KEXIM, and to explicitly exclude all ECAs from getting accredited under the Fund.”