Rich nations, GCC urged to use SDRs to fund climate action in Africa

Civil society organizations and experts have set a target to raise$5 billion worth of SDRs for this purpose, which in turn could be leveraged to raise $20 billion worth of additional funding for climate finance. 
Civil society organizations and experts have set a target to raise$5 billion worth of SDRs for this purpose, which in turn could be leveraged to raise $20 billion worth of additional funding for climate finance. 
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Updated 10 December 2023
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Rich nations, GCC urged to use SDRs to fund climate action in Africa

Rich nations, GCC urged to use SDRs to fund climate action in Africa

DUBAI: Leaders of the Gulf Cooperation Council countries have been called upon to seize the global leadership in innovative climate finance through their unused special drawing rights with the International Monetary Fund to help generate additional lending under climate finance for African economies.

“We are having conversations with various countries that have SDRs that are not used because, frankly, they don’t need them. And so this is a real opportunity for leadership by the really forward-looking, innovative leaders in the Gulf and elsewhere. So, we had a very productive conversation that we helped organize with the COP28 presidency, France, Japan, the African Development Bank, and the Inter-American Development Bank on Finance Day at COP28. And I think there was real momentum in the room. Japan had a very forward-leaning statement and France also had a very strong statement,’’ Eric Pelofsky, vice president, Global Economic Recovery, at the Rockefeller Foundation, told Arab News.

In August 2021, in response to the COVID-19 pandemic, the IMF issued a historic $650 billion in SDRs in order to help countries around the world with the necessary cushion to weather the storm. As these SDRs were issued on the economic size and existing reserves, some of the richest countries got the most of the SDRs, while leaving all of Africa with barely 5 percent or $33 billion in SDRs.

As a result, most of these SDRs have remained unused by the rich nations. Over the past few months, there have been calls by various civil society organizations and finance experts for the rich countries to repurpose or pledge their SDRs to allow poorer nations to raise much-needed funds for themselves. Though the rich nations agreed to pledge $100 billion worth of their SDRs for climate finance for Africa, there still remains a shortfall of $15 billion. 

This is where the GCC leaders can step in, say the experts as their own unused SDRs can be leveraged to raise the much-needed funds for the African nations as well as other vulnerable countries. This is an area where the Rockefeller Foundation has been working intensively, most notably the climate change meeting, known as COP28, that is currently going on in Dubai.

Enthused by the outcome of the Finance Day discussions, Pelofsky said that he would continue to push the issue at the forefront in order to rope in more countries that have surplus SDRs that they don’t need.

“We think that it has generated some real momentum and we are continuing these conversations. I think we will see a lot more progress after the IMF publicly announces a board decision, which may happen by January, which would add hybrid capital to a list of approved uses of SDRs. And after that happens, we are going to see more countries come forward with their SDRs,” the executive added.

Civil society organizations and experts have set a target to raise$5 billion worth of SDRs for this purpose, which in turn could be leveraged to raise $20 billion worth of additional funding for climate finance. 

“I think it is a real opportunity to show leadership both from an innovative finance standpoint and it’s also an opportunity to show leadership globally because it signals that not only does the Gulf (countries) care about Africa, but it is also committed to its economic success,’’ added Pelosky, who has in the past served as a special assistant to the president of US for the Middle East and North Africa at the National Security Council.

Besides leveraging unused SDRs, another way in which the Rockefeller Foundation and especially Pelofsky and his team have tried to raise funds for climate finance is by looking at the capital adequacy norms followed by the multilateral development banks, notably the World Bank, following a report by a G20 committee which found that the MDBs were being far too conservative in their capital adequacy frameworks and that there was much more lending that could be done using their existing funds.

Pelofsky said that after this report was published, the Rockefeller Foundation commissioned a study by a London-based financial risks analysis firm which determined there was adequate headroom for an additional lending of close to $190 billion by the World Bank alone.

“So you’re talking about roughly $190 billion of additional headroom in the World Bank alone that could help drive development and climate resilience in countries that get money from the World Bank. And so from our standpoint that is a huge opportunity to start to change the trajectory of these countries which are facing debt crisis, food crisis, fuel crisis, and interest rate crisis. So we have been talking to lots of leaders around the world about this study and how one could actually go about implementing,” Pelofsky added.

 


Saudi Arabia to increase green spaces, promote afforestation

Saudi Arabia to increase green spaces, promote afforestation
Updated 33 sec ago
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Saudi Arabia to increase green spaces, promote afforestation

Saudi Arabia to increase green spaces, promote afforestation

 

RIYADH: Saudi Arabia is working to expand its green spaces and accelerate afforestation efforts, according to the Kingdom's Minister of Municipal, Rural Affairs, and Housing.

During the keynote address at the session titled "Urban Green Spaces: Leveraging Nature-Based Carbon Capture Solutions" on the second day of the fourth Saudi Green Initiative Forum in Riyadh, Majid Al-Hogail shared that the Ministry of Municipal, Rural Affairs, and Housing has developed initiatives and an effective strategic plan to support the Saudi Green Initiative.

This aligns with the critical role urban green spaces play in utilizing nature-based carbon capture solutions to address climate change. It also complements the Kingdom’s commitment to rehabilitating over 74 million hectares of land. To date, 94,000 hectares of degraded land have been restored, and since 2021, 49 million plants and shrubs have been planted.

“The Ministry of Municipalities and Housing is part of this transformation,” Al-Hogail said. “We are pleased to increase the percentage of green spaces, encourage afforestation, and ensure the efficient use of resources within the framework of Saudi Vision 2030, which prioritizes citizens' quality of life.”

He added, “The Kingdom has made tangible progress in enhancing environmental sustainability, improving air quality, and reducing carbon emissions.”

Al-Hogail also emphasized that achieving SGI’s goals requires coordinated efforts from all sectors and individuals.

“What the Ministry of Municipalities and Housing has done in this regard is far greater than what has been reviewed. However, we confirm that we will remain an active partner in realizing this ambitious vision and our commitment to transforming the cities of the Kingdom into global models of innovation and quality of life, building a greener future,” he said. “We have also encouraged the private sector to adopt social responsibility programs to support afforestation, reflecting the collaboration between the public and private sectors in achieving our common goals.”

During the panel discussion, Aljawhara Al-Quayid, head of the Climate and Sustainability Program at the King Abdullah Petroleum Studies and Research Center, highlighted the role cities must play in reducing emissions.

“Utilizing and optimizing all potential solutions is definitely a priority, and one of these is maximizing the carbon sequestration potential of urban green spaces,” Al-Quayid stated.

She further explained that Saudi Arabia recently launched the Saudi Greenhouse Gas Crediting Mechanism, a milestone that lays the foundation for an effective carbon market in the Kingdom and the broader region.

“These initiatives are driven not only by the government but also by the Public Investment Fund’s creation of a trading platform through its regional voluntary carbon market company,” she added. “These two accrediting mechanisms and the trading platform are the key enablers of the carbon market.”

Donnel Baird, founder of BlocPower, also participated in the session, explaining his company's work.

“My company, BlocPower, turns buildings into Teslas. What does that mean? Just as Tesla replaced fossil fuel engines in cars with all-electric engines, we can replace fossil fuel-based heating, cooling, and hot water systems in buildings with solar-powered, wind-powered, all-electric systems,” Baird explained.

This year’s Saudi Green Initiative Forum, held on Dec. 3-4 as part of COP16, is addressing global environmental challenges such as land rehabilitation, carbon reduction, and sustainable financing. The event also explores the role of natural solutions in helping communities adapt to climate change, while emphasizing efforts to preserve the Kingdom’s rich biodiversity, according to an official statement.


Venture capital, banking key to driving sustainable finance

Venture capital, banking key to driving sustainable finance
Updated 04 December 2024
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Venture capital, banking key to driving sustainable finance

Venture capital, banking key to driving sustainable finance

RIYADH: Venture capital and the banking sector are key to advancing innovative solutions for environmental sustainability, according to the founder and CEO of KBW Ventures.

During a session titled “Redefining Sustainable Finance: From Competitive to Catalytic Impact,” on the second day of the fourth Saudi Green Initiative Forum in Riyadh, Prince Khaled bin Alwaleed explained the role of impact investing and how it is scalable, sustainable, and profitable.

This falls in line with the fact that sustainable finance is evolving from a competitive advantage to a catalyst for systematic change. With global environmental, social, and governance assets expected to reach $50 trillion by 2025, the focus is shifting toward driving large-scale impact.

“Venture capital is not competitive to traditional banking sector. The banking sector loves venture capital because they de-riskify concepts that haven’t been developed yet,” Prince Khaled said.

 “Really, it’s a marriage of different types of industries coming together harmoniously, and venture capital and banking complement each other really well,” he added.

The CEO went on to say: “For me personally, impact investing really plays a huge role, simply because it reflects a lot on the investor’s desire for financial return as well as being in fact positively impacting the environment, whether it’s people, whether it’s the environment, whether it’s social responsibility,” he added.

Prince Khaled also highlighted how venture capital is at the forefront of investing in ideas that haven’t yet materialized, bearing much of the risk in the process.

“Venture capital comes in and de-riskify these opportunities. And to fuel the growth and to fuel the scale, banks come in and feel that scale once the proven model is there once there’s profitability, once there’s product market fit,” he said.

The founder also shed light on how impact investing is yet to develop in the region.

“We’ve seen investing, but impact investing is starting to grow. We’ve seen that in the last three to four years, we haven’t seen much happening in that field, but it’s slowly going to happen simply because investors dictate ESG-driven models have to be implemented in certain companies or even in certain startups,” Prince Khaled said.

He also highlighted that policies don’t drive innovation; rather, innovation drives innovation.

“Blanket policies don’t necessarily translate really well internationally or worldwide. They work in a specific manner, and they have to be tailored for other areas in the world. And again, this is why I believe policy doesn’t necessarily dictate change. I think the market, I think innovation, I think private sector really dictates the way change is going to happen,” the CEO concluded.

This year’s edition of the Saudi Green Initiative Forum, held from Dec. 3-4 as part of COP16, aims to tackle pressing global environmental challenges, such as land rehabilitation, carbon reduction innovations, and sustainable financing. The gathering will also explore the role of natural solutions in helping communities adapt to climate change while emphasizing efforts to preserve the Kingdom’s rich biodiversity, according to an official statement.


Saudi Arabia’s economic diversification fuels 4.4% growth forecast for 2025: ICAEW

Saudi Arabia’s economic diversification fuels 4.4% growth forecast for 2025: ICAEW
Updated 1 min 17 sec ago
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Saudi Arabia’s economic diversification fuels 4.4% growth forecast for 2025: ICAEW

Saudi Arabia’s economic diversification fuels 4.4% growth forecast for 2025: ICAEW
  • Institute of Chartered Accountants in England and Wales said it marks a rebound from 1.4% growth expected in 202
  • OECD projects Kingdom’s GDP growth at 3.6% in 2025 and 3.8% in 2026

RIYADH: Saudi Arabia’s economy is forecast to grow 4.4 percent in 2025, driven by strong non-oil sector momentum and easing oil production cuts, according to the projections.

The Institute of Chartered Accountants in England and Wales highlighted that this marks a rebound from the 1.4 percent growth expected in 2024, supported by a 5.8 percent increase in the non-oil sector. 

Similarly, the Organization for Economic Co-operation and Development projects Saudi Arabia’s gross domestic product growth at 3.6 percent in 2025 and 3.8 percent in 2026. 

ICAEW emphasized the non-oil sector as a key growth driver across the Gulf Cooperation Council, with industries like tourism, real estate, and finance at the forefront.

Regional outlook

GCC economies are expected to grow at an annual rate of 4 percent over the next five years, more than double that of advanced economies. 

Scott Livermore, ICAEW’s economic advisor, said: “The GCC’s projected 4 percent growth in 2025 highlights the success of the region’s diversification efforts amid global challenges.” 

He added: “Managing capacity constraints in these high-growth sectors and navigating global uncertainties will be critical to sustaining long-term economic stability.”

Strong investments in construction, tourism, and infrastructure, coupled with rising oil production from 2025, are anticipated to bolster growth. 

Saudi Arabia’s economy is undergoing a significant transformation, with Vision 2030 spearheading efforts to reduce oil dependence and diversify economic activities.

Reforms, including regulatory changes and infrastructure investments, are strengthening non-oil industries and attracting both domestic and foreign investments. This transformation is positioning the Kingdom for long-term economic stability, supported by growing oil production and a thriving non-oil sector.

The GCC region is also projected to experience robust growth, driven by government-led diversification initiatives that are accelerating economic expansion.

According to an ICAEW report, the regional Purchasing Managers’ Index remains in expansionary territory, indicating sustained momentum in non-energy sectors. This growth is expected to result in a 4 percent expansion in industries such as tourism, real estate, and finance in both 2024 and 2025.

These developments highlight the successful implementation of strategies aimed at reducing oil dependence and fostering sustainable, diversified economic growth across the region.

Oil production recovery 

ICAEW projects that Saudi Arabia’s oil production will rise by 3.4 percent in 2025, recovering from 2024’s production cuts, which reduced output to around 9 million barrels per day.

This rebound is expected to boost GDP growth in oil-dependent economies such as Kuwait and Oman. However, the region faces challenges from the global shift toward cleaner energy and the development of renewable projects, which add complexities to long-term oil strategies. 

OPEC+ members, including Saudi Arabia, have been withholding a combined 5.86 million barrels per day of oil output — around 5.7 percent of global demand — through a series of cuts initiated in 2022 to stabilize the oil market.

OPEC+ is scheduled to meet on Dec. 5, with expectations of extending the current output cuts until the end of the first quarter of 2025 to maintain market support.  

Inflation and interest rates

ICAEW anticipates that interest rates in the GCC, which have been aligned with the US Federal Reserve’s monetary policy, will continue to ease into 2025.

After two years of aggressively tightening monetary policy to combat inflation, GCC countries lowered rates by 50 basis points in September and 25 basis points in November. 

While this easing of interest rates is expected to stimulate lending, it has also contributed to rising real estate prices, as lower borrowing costs make it easier for individuals and businesses to secure financing. 

However, the effects on the real estate market and corporate lending have been mixed. The lower rates have fueled increased demand, particularly in major cities like Riyadh, which has led to higher property prices and rents.

In Saudi Arabia, rental prices have been a key driver of inflation, particularly as the growing population and urbanization have intensified the demand for housing. As a result, inflation is forecast to rise from 1.7 percent in 2024 to 2.3 percent in 2025, with rents expected to remain a significant contributor, according to ICAEW.

State Street Global Advisors forecasts a “soft landing” in 2025, with the economy growing gradually without a sharp downturn, balancing inflation control with sustainable growth. This scenario aims to avoid major negative impacts such as high unemployment or a sharp decline in consumer spending.

Debt levels and fiscal flexibility

Saudi Arabia’s budget deficit is projected to persist, with ICAEW estimating a shortfall of 2.8 percent of GDP in 2024. However, the country's low government debt levels provide flexibility to fund key Vision 2030 initiatives and infrastructure projects.

The Kingdom’s 2025 budget, approved in early November, forecasts revenues of SR1.18 trillion and expenditures of SR1.28 trillion, resulting in a deficit of SR101 billion. 

These deficits are within manageable, planned levels, strategically designed to support the government’s expansionary spending on key projects aimed at diversifying the economy.

Saudi Arabia also maintains a strong credit rating from international agencies, reflecting its fiscal stability and investor confidence, which bolsters its capacity to finance these expansionary projects. 

Across the GCC, most countries are expected to maintain manageable debt levels, with sovereign wealth funds and other financial tools helping bridge budget gaps. 

According to State Street Global Advisors, the GCC’s economic diversification efforts have led to a significant increase in fixed income issuance, with outstanding bonds surpassing $1.35 trillion by September, more than tripling since 2019.

Notable growth in local currency bonds, sukuk, and green bonds reflects the region’s commitment to economic diversification and sustainability.

GCC bonds have outperformed the broader JP Morgan EMBI Global Diversified Index, offering lower volatility and drawdowns compared to other emerging market bonds, making them attractive to investors, according to their report.  

Capital market expansion

The GCC is undergoing a significant transformation in its capital markets, with Saudi Arabia at the forefront.

According to State Street Global Advisors, GCC equities have outperformed the broader emerging markets index over the past decade, despite global challenges. This outperformance is attributed to the region’s economic resilience and successful diversification efforts.

GCC equities also exhibit a low correlation with oil prices and both developed and emerging markets, offering distinct sectoral exposure. The stability of dollar-pegged currencies further reduces currency risk, making GCC equities an attractive investment in volatile global markets.

Saudi Arabia’s stock market has grown to become the seventh-largest globally, reflecting the strength of the real economy.

Key reforms in the sector, including new regulatory frameworks, have increased liquidity and market accessibility.

Saudi Arabia’s inclusion in the MSCI Emerging Markets Index and the expansion of local equity offerings have been pivotal milestones. Additionally, the introduction of sukuk and green bonds has diversified the investment landscape, drawing international investors.

The ongoing integration of Saudi capital markets with global markets, coupled with Vision 2030 reforms, has positioned the Kingdom as an attractive destination for international investors, signaling a shift toward greater economic diversification and sustainability.


Saudia teams up with Air France-KLM to strengthen local MRO services

Saudia teams up with Air France-KLM to strengthen local MRO services
Updated 04 December 2024
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Saudia teams up with Air France-KLM to strengthen local MRO services

Saudia teams up with Air France-KLM to strengthen local MRO services
  • Partnership demonstrates shared commitment to advancing Kingdom’s aviation sector
  • Air France-KLM revealed plans to expand its presence in Saudi Arabia

JEDDAH: The Kingdom’s national carrier, Saudia, has entered into a strategic partnership with Air France-KLM to expand and localize its maintenance, repair, and overhaul capabilities. This collaboration aims to enhance the Kingdom’s aviation infrastructure and contribute to its economic growth.

The agreement was formalized during a signing ceremony on Dec. 3, which was attended by French President Emmanuel Macron, Saudi Arabian Airlines Corp. Chairman Saleh Al-Jasser, Saudia Group Director Gen. Ibrahim Al-Omar, and several other dignitaries and ministers, as per a statement from Saudia.

Al-Omar said the partnership is in line with Saudi Arabia’s Aviation Strategy, led by the General Authority of Civil Aviation, and demonstrates a shared commitment to advancing the country’s aviation sector.

Benjamin Smith, the CEO of Air France-KLM, highlighted the long-standing relationship between Saudia and the Air France-KLM Group, noting: “In the context of Saudi Arabia’s rapid development, we see great mutual benefit in expanding our commercial cooperation and combining our expertise, especially in the strategic area of MRO services.”

He added that Air France-KLM Engineering and Maintenance, a leader in the field, is well-positioned to deepen its collaboration with Saudia to unlock additional opportunities in Saudi Arabia and across the region.

This agreement is also part of Saudia’s broader effort to increase local content and develop local talent and capabilities in aviation, aligning with Saudi Vision 2030’s objectives to build a strong national economy.

The deal supports Saudi Arabia’s National Aviation Strategy, which aims to position the Kingdom as a global leader in tourism, business travel, and logistics. Key goals include enhancing interconnectivity, expanding the market share of national carriers, and improving airport infrastructure.

The agreement was signed by Fahd Cynndy, managing director of Saudia Technic, and Anne Brachet, executive vice president of engineering and maintenance at Air France-KLM.

The partnership marks a significant milestone in Saudia’s efforts to enhance its technical operations within the Kingdom and solidify both parties’ commitment to mutual growth in the aviation sector.

Under the terms of the agreement, Saudia will take on the assembly and disassembly of GE90 engines, which are used in Boeing 777 aircraft. Saudia will also allocate at least 50 percent of GE90 work orders to Air France-KLM in exchange for the localization of these processes.

Additionally, the partnership explores the creation of a joint venture to support GEnx engines, which power Boeing 787 aircraft. This will further bolster Saudia’s growing MRO capabilities, which already include servicing CFM LEAP-1A engines used on the Airbus A320neo family of aircraft.

On the commercial front, the agreement also focuses on strengthening the codeshare relationship between Saudia and Air France-KLM, both members of the SkyTeam alliance. This will allow for expanded reciprocal codesharing across a broader range of domestic and international routes, improving connectivity and increasing flight frequency.

Coinciding with this announcement, Air France-KLM revealed plans to expand its presence in Saudi Arabia. The group will launch a new route between Paris-Charles de Gaulle and Riyadh in the summer of 2025, operated by Air France. This follows a recent agreement between Air France-KLM and Saudi Arabia’s Air Connectivity Program, signed in the presence of Deputy Minister of Tourism for International Affairs Sultan Al-Musallam.

In addition to the new Paris-Riyadh route, Transavia, the low-cost carrier of Air France-KLM, will begin flights to Jeddah from Paris-Orly and Lyon. With these new services, all three airlines in the Air France-KLM Group — Air France, KLM, and Transavia — will operate in Saudi Arabia. KLM currently serves Riyadh and Dammam from its hub at Amsterdam Schiphol.

Benjamin Smith expressed his excitement about the expansion, saying, “Saudi Arabia is rapidly becoming a world-class destination and a key gateway. We are thrilled to support the Kingdom’s growth by expanding our network and strengthening our existing routes.”

Majid Khan, CEO of the Saudi Air Connectivity Program, welcomed the addition of Air France services to the Kingdom, emphasizing that this move is part of broader efforts to enhance air connectivity to vital international destinations and streamline travel to Saudi Arabia.

“Air connectivity plays a critical role in driving tourism development. The new direct flights between Riyadh and Paris, set to launch in summer 2025, will facilitate a stronger flow of tourism between our two nations,” Khan said.


Saudi Arabia positioned to lead global hydrogen production, say experts

Saudi Arabia positioned to lead global hydrogen production, say experts
Updated 04 December 2024
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Saudi Arabia positioned to lead global hydrogen production, say experts

Saudi Arabia positioned to lead global hydrogen production, say experts
  • SABIC, in collaboration with its parent company Aramco, plans to produce low-carbon ammonia
  • COP16 panelists cautioned hydrogen alone will not solve global decarbonization challenges

RIYADH: Saudi Arabia is poised to become one of the world’s leading producers of hydrogen, capitalizing on its abundant renewable energy resources and robust infrastructure, experts say.

At the Saudi Green Initiative Forum in Riyadh, Abdulrahman Al-Fageeh, CEO and executive board member of SABIC, outlined the Kingdom’s unique advantages in the hydrogen sector.

“Saudi Arabia, by the way, as a country, is going to be the best competitive in terms of the economics of producing hydrogen from any source by having the solar, by having the wind and also by having the gray hydrogen that we have in our systems,” he said. 

Al-Fageeh underscored that the Kingdom’s hydrogen ambitions would depend on close collaboration across the entire value chain, as well as strong regulatory support.

“Collaboration across the value chain is key, and regulators will play a crucial role,” he emphasized, highlighting the importance of coordinated efforts to scale production and integrate hydrogen into fuel systems and broader decarbonization strategies.

As part of its hydrogen strategy, SABIC, in collaboration with its parent company Aramco, plans to produce low-carbon ammonia.

“We have committed to advancing our decarbonization efforts using hydrogen and will collaborate with Aramco to produce low-carbon ammonia, which will play an important role in the fuel systems of the future,” Al-Fageeh added.

Sanjiv Lamba, CEO of Linde, also spoke positively about Saudi Arabia’s potential, describing hydrogen as a vital link in the global energy transition.

“Low-carbon hydrogen offers a cost-effective, scalable solution with mature technologies today, ensuring safe and reliable hydrogen production,” he said, adding that Saudi Arabia is particularly well-positioned to produce green hydrogen at globally competitive prices.

Kholoud Al-Otaibi, a clean hydrogen analyst at the Saudi Ministry of Energy, highlighted the Kingdom’s ongoing progress in building the necessary infrastructure for hydrogen production and export.

“The Kingdom is already taking deliberate steps to develop the protection and capacity, as well as the export infrastructure needed for hydrogen,” she said, underscoring the potential of hydrogen to support a sustainable energy future.

Despite the optimism, panelists cautioned that hydrogen alone will not solve global decarbonization challenges.

“It is one of many solutions. To address this pragmatically, we need to answer three key questions: where, what, and how,” said Al-Fageeh.

Francois Jackow, CEO of Air Liquide, noted that the energy transition is at a critical “scale-up phase,” requiring substantial investment and industrial innovation to unlock its full potential.

The forum also tackled broader challenges in climate finance, with experts stressing the urgent need to bridge the funding gap for climate adaptation, particularly in low- and middle-income countries.

Mohammed Ayoub, lead climate finance negotiator at the Saudi Ministry of Energy, warned that macroeconomic factors, such as unsustainable debt levels and foreign exchange risks, are restricting access to capital for developing nations.

“This is driving up the cost of capital due to lower sovereign ratings,” Ayoub said, explaining that it limits critical investments in climate adaptation measures that save lives and improve quality of life in vulnerable regions.

Florent Baarsch, founder and CEO of finres, highlighted the scale of the shortfall, pointing out that current overseas development assistance stands at $220 billion annually, far below the $300 billion to $500 billion needed each year for climate adaptation.

“Even if we allocated the entire ODA to adaptation, it would still fall short,” Baarsch said.

Rachel Kyte, the UK special representative on climate, said that adaptation finance must prioritize the most vulnerable populations and combine public and private funding to meet the scale of the challenge.