AS the Government alongside energy stakeholders outline ambitious targets for Jamaica's energy future, financing remains a significant obstacle.
Edison Galbraith, general manager, channels, relationships and marketing at the Development Bank of Jamaica (DBJ), said his agency is working overtime to secure funding for the renewable energy sector.
Speaking at the recent Jamaica Observer Business Webinar, Galbraith said, "The DBJ is working with the Green Climate Fund (GCF) to unlock funding in various forms for Jamaica and we're working with fund managers and financial markets to mobilise funding."
The Green Climate Fund is a fund established within the framework of the United Nations Framework Convention on Climate Change (UNFCCC) as an operating entity of the financial mechanism to assist developing countries in adaptation and mitigation practices to counter climate change. The GCF is based in Incheon, South Korea.
So far, Galbraith disclosed that countries have been tapping the GCF to advance their renewable energy ambitions. He said Jamaica is also seeking to tap those resources.
"Several countries have been able to tap the resources of that fund, both getting grants as well as debt financing and assistance to implement programmes to reduce their carbon emissions and their carbon footprint."
Research conducted by the Jamaica Observer revealed there are currently four GCF supported projects in Jamaica but the GCF has listed seven activities it is ready to provide support for.
According to information posted on the GCF website, the total funding allocated to Jamaica is US$30 million, however only US$3.1 million has been approved so far with an even smaller amount of US$1.4 million being disbursed.
Majority of the disbursed funds or US$1.1 million is a grant from the GCF to commence preparation of Jamaica's first National Adaptation Plan (NAP).
President of the Jamaica Environment Trust (JET) Theresa Rodriguez-Moodie believes more funding is needed.
"I think there needs to be more. And it's not just funding for adaptation and mitigation, it's funding needed for loss and damage. It's like one step forward, two steps backward whenever you try and build these projects and then you have an event that is unprecedented because of climate change. I do believe that the developed nations need to be providing more funding for these types of projects," she noted.
At the same time, she cautioned, "Our Government needs to ensure that the decisions they are making are not going to be counter-productive to the funding they are seeking to build resilience."
The environmental lobbyist argued "when you turn around and you give approvals to destroy lovely mangroves in Green Island [Hanover] to build a hotel, mangroves are important to mitigation and adaptation too. We'll turn around and talk about environmental protection after we've destroyed the mangroves."
But progress is being made. Moodie pointed out "we're doing a lot of work and we're doing good work in terms of climate change and the adaptation and mitigation projects, we're trying to support communities and organisations to also do these climate works and studies. It's important work and I'm not discounting that. I think it's equally important that we pay attention to how we go about doing environmental development and management. We have to work together, we can't be focusing on climate change adaptation and doing those projects, getting funding for that while making decisions that are counter."
Minister without portfolio in the Ministry of Economic Growth and Job Creation (MEGJC), Senator Matthew Samuda, recently travelled to Incheon in the Republic of Korea to represent Jamaica at the second GCF Global Programming Conference 2022.
His aim was to outline how the GCF can ensure that funding reaches the most vulnerable in Jamaica while untapping the potential of investments in the blue economy through streamlined mechanisms, in line with national development priorities.
GCF is disbursed across four transitions â€” built environment; energy & industry; human security, livelihoods and well-being; and land use, forests and ecosystems.
"Across the world there are programmes that do basic things such as energy access moving people from chopping wood, burning and inhaling the fumes, putting in renewable plants, financing structures to support distributed scale energy or utility scale so there are several billions of dollars that are available across the world that can support this," Galbraith added.
He noted that special funding is available for projects which focus on renewables and clean energy, but admitted that in most cases it requires a balancing act.
"A big part of the operations of businesses in Jamaica is the cost of energy whether it's the hotel sector, manufacturing, industrial, across the board. So, to a large extent we have to address the cost of energy. From a geopolitical or global perspective, there's the whole issue of carbon emissions, which has both negative and positive costs, meaning if businesses don't cut carbon emissions you're going to be punished and there are opportunities also to reduce; so we clearly have to strike that balance," he stated.
Analysts contend that climate change offers businesses an unprecedented chance to capitalise on new growth and investment opportunities that can protect the planet as well. GCF employs part of its funds to help mobilise financial flows from the private sector to compelling and profitable climate-smart investment opportunities.
From August 1, 2021 to July 31, 2022, the GCF accelerated its programming of new climate finance in developing countries with US$1.69 billion approved for 19 climate projects around the world.
The total number of approved projects stood at 196, and the total amount of GCF funding was US$10.4 billion, with US$28.5 billion of co-financing mobilised.
These approved projects and programmes are expected to abate a total of two billion tonnes of carbon dioxide equivalent of greenhouse gas (GHG) emissions and reach 196 million direct and 615 million indirect beneficiaries, based on the estimations of accredited entities (AEs).
GCF can structure its financial support through a flexible combination of grant, concessional debt, guarantees or equity instruments to leverage blended finance and crowd-in private investment for climate action in developing countries. This flexibility enables the fund to pilot new financial structures to support green market creation.
GCF is mandated to invest 50 per cent of its resources to mitigation and 50 per cent to adaptation in grant equivalent. At least half of its adaptation resources must be invested in the most climate vulnerable countries ie small island developing states (SIDS), least developed countries (LDCs) and African states.