Green finance

Together, the climate crisis and biodiversity loss are imposing enormous costs. By 2050, over USD 1,000 billion per year will be needed to keep global warming below 2°C. In fact, extreme weather events and the loss of ecosystems are already responsible for damage measured in billions.

The scale of investment needed far exceeds the environmental and climate finance currently available. This gap can only be bridged through the joint efforts of the public and private sectors. GIZ programmes address this issue at both international and national level. That involves helping our partners to create sustainable financial flows at national level and to harness international sources of financing. Our advisory work focuses on planning and establishing cooperation and governance structures and dialogue mechanisms that lead to well-informed financing and investment decisions while also ensuring that the planning and implementation of environmental and climate finance (climate governance) are both efficient and transparent. Another important aspect of GIZ’s advisory work is the ongoing development of national strategies in the area of climate financing, e.g. how to finance measures linked to nationally determined contributions (NDCs) and national adaptation plans (NAPs).

At international level, GIZ works with major climate funds and initiatives (GCF, NAMA Facility, IKI, GEF, GEEREF) to jointly promote climate- and environment-friendly projects. We also support the efforts of our partner countries to access international funds, especially through the Green Climate Fund (climate finance readiness).

Other priorities in our advisory work

• ‘Green’ financial products: We advise commercial banks, national development banks and other financial institutions on how to make their products more climate- and environment-friendly (e.g. green bonds).
• Promotion of a ‘green’ financial system: Following the example of the European Commission, we advise partner countries (e.g. finance ministries and central banks) on how to create legal and policy frameworks that facilitate flows of commercial capital into climate- and environment-friendly activities (e.g. through blended finance).
• Public environmental and climate finance: We advise partner governments on how to ‘green’ their financial policies, e.g. by introducing environmental finance reforms and carbon taxes, establishing national environmental/climate funds and integrating natural capital accounting into the policymaking process.