Climate financing

Denmark funds a series of initiatives which helps developing countries and emerging economies in translating their climate objectives into specific projects.

Climate funding and the Paris Agreement

To reach the long term goals of the Paris Agreement, it is necessary to mobilize resources to support the green transition. With the Paris Agreement Parties agreed to a long term goal of shifting finance flows from investments in fossil fuels towards green investments. This sends a clear signal about the global orientation towards sustainable development and emphasizes the importance of mobilizing private investments as well, in order to reach the long term goals of the Paris Agreement.

At COP21, the industrialized countries also confirmed its promise to mobilize 100 billion USD a year from 2020 to 2025 from public and private sources to support climate initiatives in developing countries.

The Parties furthermore agreed to set a new funding finance target for the period after 2025. This also opens up for broadening the donor base to contribute to the next finance goal.

Denmark and the EU are playing a central role in assisting developing countries in translating their climate objectives into specific projects, through climate funding and capacity-building instruments.

Climate finance after COP24

At COP24 Parties agreed on making the goals of shifting the financial flows toward green investments a part of the global stocktake. Every five years the stocktake is to evaluate on the global effort to combat climate change and inform Parties prior to deciding on their new climate contributions. It is important that parties are able to share experiences continuously in the work to attract investments in green solutions, and thereby inspire others to enhance climate action.

At COP24 Parties additionally agreed on clear reporting rules for provided and expected climate finance to enhance transparency on levels of climate finance.

Finally Parties agreed that discussions on a new finance goal for the period after 2025 will be initiated in 2020.

Climate finance in bi- and multilateral initiatives

Denmark has a strong focus on assisting large emerging economies in their transition to sustainable development by sharing Danish experience, expertise and technology.

Denmark has established bilateral cooperation in the field of energy and climate with several emerging economies, including China, Mexico, Vietnam and India, with a focus on advancing favorable regulatory environments and robust framework conditions, which are important conditions for attracting private and public climate finance.

This work is supported by multilateral organizations such as the International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA). Furthermore, Denmark is involved in the promotion of more favorable investment conditions through engagement in cross-disciplinary initiatives, such as phasing out subsidies for fossil fuels.

Climate finance for funds and initiatives

Denmark provides advisory services for developing countries in planning, developing and implementing ambitious climate projects, which are in line with national climate and development plans. Part of the support is given through the climate funds, which are part of a broader established climate finance architecture containing The Green Climate Fund (GCF), the Least Developed Countries Fund (LDCF) and Climate Technology Centre & Network (CTCN). Support is also provided to selected funds and initiatives with focus on specific issue areas. Among these are the NAMA Facility, Global Partnership Fund (GCPF) and Sustainable Energy for All (SE4All).

New and innovative solutions

Part of the Danish support furthers financing initiatives and instruments aimed at breaking down barriers to private investment in climate projects. The Energy Savings Insurance (ESI) is an innovative instrument, using warranties and insurances to increase private investments in energy efficiency improvements in developing countries.

Additional initiatives include the public-private partnership initiative P4G and the Green Investment Fund (GIF) and its follow-up the SDG fund,  both focused on Danish pension funds that invest in commercial climate projects in developing countries.


Team Global Rules