World Bank Group and GEF: Leveraging development finance for the benefit of the global environment

October 17, 2016

 Morocco’s concentrated solar power complex and the centerpiece of its Solar Power Plan, is poised to supply power to 1.1 million Moroccans by 2018 and reduce carbon emissions by 17.5 million tons over the next 25 years. Ain Beni Mathar Integrated Combined Cycle Thermo-Solar Power Plant. Photo: © Dana Smillie / World Bank.
Morocco’s concentrated solar power complex and the centerpiece of its Solar Power Plan, is poised to supply power to 1.1 million Moroccans by 2018 and reduce carbon emissions by 17.5 million tons over the next 25 years. Ain Beni Mathar Integrated Combined Cycle Thermo-Solar Power Plant. Photo: © Dana Smillie / World Bank.

Article by World Bank Group President Jim Yong Kim on the occasion of the 25th anniversary of the GEF

Over the past quarter century, the Global Environment Facility has advanced global efforts to protect the environment. Through its work with institutions like the World Bank Group, it has demonstrated that the pursuit of global environmental benefits is worth more than the sum of its parts, and can have a major positive impact on sustainable development and the lives of people.  

The Bank’s partnership with the GEF is based on a long and rich history. We’ve been part of the GEF from the outset, incubating the nascent facility in our Environment Department and acting as a GEF Implementing Agency and trustee. Together with the United Nations Development Programme and the United Nations Environment Programme, we’ve provided an institutional framework and space to operate the GEF secretariat. We’ve spearheaded integrated programming to promote conservation, low carbon development, climate smart agriculture and resilience, and also to tackle chemicals and pollution management, to name a few examples. Through this process, we’ve worked together to leverage development finance for the benefit of the global environment, in line with our goals to end extreme poverty and boost shared prosperity.

The GEF plays an important role as the financial mechanism for numerous multilateral environmental agreements – and there is a continuing need for GEF grants to unlock greater investment in renewable energy.  GEF grants have helped the Bank’s client countries pioneer new frontiers, overcome barriers to greater investment, and meet renewable energy goals.  They can ultimately help countries get on a path toward low-carbon growth by driving the expansion of renewable energy and the effort to de-carbonize the global power mix.

One example is Morocco, host of COP 22, the November 2016 Conference of the Parties of the UN Framework Conference on Climate Change. Morocco’s concentrated solar power complex and the centerpiece of its Solar Power Plan, is poised to supply power to 1.1 million Moroccans by 2018 and reduce carbon emissions by 17.5 million tons over the next 25 years.  This started with a $43 million GEF grant, implemented by the Bank, which helped pilot Integrated Solar Combined Cycle power in the country’s northeast. The pilot project, also supported by an African Development Bank loan, built capacity and generated interest among investors. Further investment followed from the Climate Investment Fund’s Clean Technology Fund; the World Bank; and the private sector, through the Bank Group’s private sector arm, the IFC; and enhanced by another GEF grant.

GEF funding has also helped developing countries improve conservation and sustainable use of global environmental public goods. GEF has supported resilient landscapes and sustainable livelihoods since the early 1990s, by helping countries safeguard their natural ecosystems and promote natural resource management.  An example is Brazil’s Amazon Region Protected Areas Program, supported by the Bank’s GEF Program and other partners. As a result of the protected areas, 10 percent of Brazil’s Amazon basin is under strict protection and supervision. Beginning in the 1990s, GEF funding also helped establish conservation trust funds supporting the management of national parks and protected areas around the world. Many of these trust funds have grown into permanent and well capitalized institutions focused on a number of activities, including: capacity building; awareness-raising and environmental education; conservation and sustainable use of natural resources; engaging local and indigenous communities in co-managing activities and sustainable livelihood opportunities; and strengthening local institutions. Today, some trust funds have even graduated to become accredited agencies of the GEF itself, as well as the Adaptation Fund and the Green Climate Fund.

GEF funding has helped drive the Bank’s re-engagement with fisheries through initiatives such as the West Africa Regional Fisheries Program and the South West Indian Ocean Fisheries Governance Project. Such conservation efforts are generating rural jobs and incomes, attracting considerable local and foreign investment, and contributing significantly to food security. And in 12 Sahel countries in Africa, GEF funding is supporting coordinated sustainable land and water management practices to claw back the desert and boost resilience.

In transport, GEF grants have helped spur innovative projects to reduce traffic congestion and improve traffic management. They have supported cost-effective public transport modes like bus-rapid transit (BRT) systems. An example is Mexico’s BRT system, initiated along Mexico City’s busy Avenida de los Insurgentes, reduced commute times, improved air quality, lowered CO2 emissions and generated market opportunities in the public transportation sector.

These projects give a sense of the tremendous impact of the GEF grants. Over our 25-year partnership, the Bank has channeled nearly $5 billion in GEF grants to client countries around the world. They have leveraged more than $32.8 billion in Bank and partner funds -- amplifying GEF’s impact more than six times over. The program has been able to leverage diversified investment finance, drive innovation, buy down risk, catalyze change and promote innovation, crowd in other programs and partners to work collaboratively, lay the foundations for scale-up of follow-on investments, and advance global action on pressing environmental issues.

The GEF continues to play a distinctive role as a financing mechanism dedicated to reversing environmental loss. As a steward of global public goods, GEF strengthens the world’s ability to respond to the increasingly immense and complex challenges and pressures we face.

In the years ahead, GEF will play a key role in achieving the Sustainable Development Goals. Now 25 years old, the GEF has grown into a broad partnership with 18 agencies, each with their own comparative advantages. Together with the multilateral development banks, we will be investing in the order of $400[1] billion in the SDGs over the next four years. As our work on climate change shows, the investment needs for addressing the causes of environmental degradation and the global environmental goods agenda runs into the trillions of dollars.  The GEF Partnership is strongly positioned to work with the Bank and other multilateral development banks to devise a financing framework to leverage a portion of our balance sheets for this critical agenda.  We look forward to working on this challenge with the GEF Partnership during the upcoming GEF 7 replenishment and on our continued engagement moving forward.