Finland publishes its plan for international climate finance: nearly twofold increase in funding

NordenBladet — The Ministry for Foreign Affairs publishes for the first time its long-term plan for Finland’s international climate finance, extending up to 2026. Finland’s international climate finance will increase nearly twofold during this government term compared to the previous term, and a larger share than before will be allocated to critical climate adaptation measures in developing countries. More attention will be paid to business cooperation as strong investments of the private sector will be needed to achieve the climate objectives.Finland’s international climate finance is funding channelled from Finnish development cooperation appropriations  to climate action  in developing countries. The plan, published now for the first time by the Ministry for Foreign Affairs, demonstrates how the  funding for developing countries will increase in accordance with the Government Programme. International climate finance will increase nearly twofold during this government term compared to the previous term, according to the plan an increase of  93 per cent. Climate finance will reach its peak next year, and the funding is expected to rise up to EUR 249 million. After this, the  planned fundingwill continue at an annual level of approximately EUR 200 million until 2026.“Climate finance is one of our obligations under the Paris Agreement. We will take determined action to increase climate finance until 2026 and focus on comprehensive solutions. With this public finance plan, we emphasize the importance of different funding channels,” says Minister for Development Cooperation and Foreign Trade Ville Skinnari.Climate finance aims to respond in a balanced way to the challenges of climate change mitigation and adaptation. The aim  is to slow down climate change and help people adapt to its inevitable consequences, such as extreme weather events. The funding consists of  grant-based, investment-based and loan-based assistance. It is estimated that, as set out in the Government Programme, from 2022 onwards grant-based climate finance flows will be equally split between adaptation and mitigation.In addition to the level and distribution of the funding, the plan presents the objectives, impact, allocation, monitoring, reporting and communication of climate finance. The plan also explains how a growing amount of private funding can be used alongside public funding.Growing climate finance is an opportunity for Finnish actorsClimate finance can achieve broad-based results: it will lead not only to emission reductions but also to continued carbon sequestration. It can help to prevent disaster-related deaths, support  communities in vulnerable situations to adapt to climate change , and mobilize private funding.
Growing climate finance is also an important opportunity for Finnish companies and other actors. A significant part of the funding will be channelled via reliable international finance institutions and civil society organisations. Team Finland actors assist Finnish businesses in grasping new business opportunities created by the growing climate finance flows. “We are developing our support functions to better respond to the needs arising from the expertise, products and interests of Finnish operators in the emerging markets. We will intensify the renewal of partly fragmented financial instruments and consider developing a thematic call for funding,” Skinnari says.Read more in the climate finance plan (in Finnish)BackgroundFinland’s public international climate finance is funding channelled from Finnish development cooperation appropriations to climate action in developing countries. In its audit in summer 2021, the National Audit Office of Finland recommended the Ministry to prepare a climate finance plan. The Development Policy Committee published its own report on the matter in January 2022.Climate finance is guided by a number of international agreements and policies, the most important of which are the UN Framework Convention on Climate change, the Paris Agreement and the Sustainable Development Goals (SDGs). The Government Programme entries on financing are based on international agreements.