Innovative projects for countries with high ambitions
The IKI has been supporting emerging and developing countries in climate mitigation actions for ten years through the NAMA Facility. By means of the “Ambition Initiative”, particularly ambitious countries receive more financial resources to implement their nationally determined contributions while they recover from the consequences of the Covid 19 pandemic.
Solar-powered cooling for food and electric motorbikes in Kenya, green hydrogen in Costa Rica and sustainable e-mobility in Nepal - these are still no more than promising ideas. But soon, they are going to become reality, save greenhouse gas emissions and contribute to climate neutrality in the respective countries.
Not only do they have innovative concepts in common, but also their funding. The four projects were chosen in 2021 as concept outlines by the NAMA Facility under the Ambition Initiative in order to prepare detailed project applications.
Common but diverse responsibility
The NAMA Facility is an international climate finance programme, which promotes ambitious measures with the aim of reducing greenhouse gas emissions. NAMA is the abbreviation for Nationally Appropriate Mitigation Actions. The concept takes into consideration the various national socio-economic conditions and reflects the common but different responsibilities and capacities of industrialised, emerging and developing countries as set forth in the Framework Convention on Climate Change. NAMAs are acknowledged as specific steps towards achieving the Nationally Determined Contributions (NDCs).
To be more specific, the NAMA Facility finances innovative NAMA Support Projects (NSPs) that combat climate change and have the potential to apply their approaches beyond the actual project in question. The NAMA Facility was jointly founded in 2012 by Germany and the United Kingdom. Since 2015, Denmark and the European Commission have also joined as sponsors, and in 2021, the Children’s Investment Fund Foundation (CIFF), a private foundation registered in England and Wales, followed.
In order to emphasise the conceptual link between NDCs and NAMAs, the funded projects must specifically refer to the NDC context of the respective country. The NAMA Facility chooses these projects by means of competition procedures (calls) based on conceptual outlines, and are open to applications from all regions and sectors. Recipient countries must be ODA-eligible: ODA stands for Official Development Assistance and is an international metric that collects data on government aid programmes.
Since its foundation, the NAMA Facility has provided 667 million EUR. The project portfolio in particular includes the mitigation sectors of waste management, energy efficiency, renewable energies, agriculture and forestry, and transport. The NSP portfolio currently comprises 43 projects throughout Latin America and the Caribbean, Africa, Asia and the Pacific region.
The “Ambition Initiative” was initiated during the fifth anniversary of the Paris Agreement in December 2020. Germany, through the International Climate Initiative (IKI), contributed 100 million EUR in support of the initiative. In view of global challenges, it targets an even more ambitious level than the previous NAMA Facility calls and aims to support countries in implementing their updated NDCs and a sustainable new start in the wake of the Covid 19 pandemic.
A total of 41 draft NSPs from 28 countries were submitted by the end of the funding call on 31 May 2021 to apply for a combination of technical support and climate finance. The NAMA Facility chose four outlines, for which detailed project drafts will now be prepared by 2023.
Preventing post-harvest losses: solar-powered cold chains in Kenya
In 2019, the Food and Agriculture Organisation of the United Nations (FAO) estimated that 40 per cent of the twelve million tonnes of fruit and vegetables produced in Kenya every year spoil after harvest due to technical problems or insufficient storage and cooling facilities.
These post-harvest losses are not only a risk for food security and the economic livelihoods of the people: fighting these losses also makes an important contribution to the reduction of greenhouse gas emissions, since the anaerobic decomposition of organic matter is a major source of methane emissions.
The project aims to introduce and expand solar-powered cold chains in the agricultural sector in order to reduce post-harvest losses especially in horticulture, but also in dairy and meat production. The offer addresses small farming enterprises and their agricultural cooperatives in Nakuru and Meru, two large agricultural areas in Kenya.
The NSP supports service providers offering cooling facilities such as solar-powered refrigerated warehouses to and between the respective farming sites or end markets. As part of its technical support, the NSP provides information to farmers regarding post-harvest management with the aim of inducing a fundamental change. The project’s financial mechanism aims at long-term risk minimisation for the agricultural sector by means of loans and a guarantee fund.
The NSP seeks to reduce about 495,000 tonnes CO₂ equivalents in total and to create 3,900 tonnes of climate-friendly cold storage capacity.
Decarbonisation of the economy: green hydrogen in Costa Rica
Costa Rica aims to be carbon neutral by 2050. Key sectors such as industry, transport and agriculture are to be decarbonised for this purpose. As the country has produced 98 per cent of its electricity using renewable energies in the past six years, the government also intends to rely on green hydrogen: a national hydrogen strategy is to be adopted in 2022.
The NSP intends to promote the production, distribution and use of hydrogen in selected sectors in order to accelerate the market maturity of green hydrogen applications. As part of the technical cooperation, the government will be provided with support in establishing favourable conditions for the production and consumption of green hydrogen and in developing business models for its use in various sectors. The financial mechanism of the NSP comprises targeted incentive systems for production facilities and consumers in the industrial and agricultural sectors.
Sustainable public transport: E-mobility in Nepal
36 per cent of the annual greenhouse gas emissions of the energy sector in Nepal are attributable to the transport sector. The country’s NDC envisages that 20 per cent of public transport will be electronically operated by 2025.
The NSP supports public transport operators in the funding and use of more than 3,000 electric minibuses and charging stations. The purchase and operation of the vehicles and charging stations is promoted by subsidies and a guarantee fund with the intention of minimising the risk of private investments in this sector.
At the same time, the NSP promotes reforms in the policy, regulatory and authorisation fields. It is also setting up a special department for e-mobility in the government. The measures create environmentally friendly workplaces, promote entrepreneurship in the green transport sector and increase the options for commuters, crucial aspects for Nepal's economic recovery.
The goal of the NSP is that by 2030, 85 per cent of all newly purchased minibuses in Nepal will be electrically powered and 1.78 million tonnes of CO equivalents will be directly saved over the lifetime of the vehicles.
Sustainable mobility: electric two and three-wheel vehicles in Kenya
In Kenya, emissions from the transport sector are rapidly increasing. They are the second largest group responsible for greenhouse gases at approximately 13 per cent. It has therefore been identified as a priority sector in the updated NDC commitments and the National Plan of Action on Climate Change.
About 72 per cent of Kenya’s population lives in rural areas, with a low number of vehicle owners amounting to 28 vehicles per 1,000 people. In the light of increasing motorisation, e-mobility offers a huge opportunity to take a leap forward: especially in the segment of two and three-wheel vehicles, there is a need for an accelerated transition to e-mobility.
The NSP is formulating framework conditions for the promotion of e-mobility and establishing supply chains for the production and assembly of economically priced, electrically powered two and three-wheel vehicles. This not only reduces emissions, but also generates jobs in the environmental sector and boosts industrial growth.
The NSP will combine financial and technical measures in order to initiate this process. On the financial side, it will create several instruments such as subsidies and loans for the production and purchase of electric two and three-wheel vehicles with the aim of stepping up supply and demand. The technical measures set in at the national and sub-national level and cover a broad spectrum - from tax incentives to the establishment of charging infrastructure, innovation promotion and qualification programmes.
The target of the NSP is that 15 per cent of all registered two and three-wheel vehicles in Kenya will be electrically powered when the project reaches the end. Of these vehicles, 80 per cent are to be manufactured in Kenya, which is expected to create about 3,500 new jobs.
Ambition Initiative - round 2
Since the end of the first call of the “Ambition Initiative” in May 2021, more countries have updated their Nationally Determined Contributions. This development picked up pace in the run-up to the 26th World Climate Conference (COP26). At the COP26 in Glasgow, the NAMA Facility pronounced the second round of the “Ambition Initiative”. The same donors as in the first round are participating with a funding volume of 100 million EUR.
The second call for the submission of project outlines was open from 9th November 2021 to 30th April 2022. The selection of the outlines took place by October 2022.
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