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Overseas Aid: Climate Change

International Development written question – answered on 18th January 2011.

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Photo of Frank Field Frank Field Labour, Birkenhead

To ask the Secretary of State for International Development to what use the UK's contribution from the Environmental Transformation Fund to the World Bank's Climate Investment Funds has been put; what proportion of the contribution was in the form of loans; and whether any conditions were placed on the contribution.

Photo of Andrew Mitchell Andrew Mitchell The Secretary of State for International Development

The Climate Investment Funds (CIFs) are not World Bank funds, but rather are managed by an equal number of developing and developed countries. The World Bank acts as trustee and, alongside other multilateral development banks, is one of the agencies recipient countries may choose to implement their national programmes.

The UK's £735 million contribution to the CIFs is helping 45 developing countries to pilot transformational investments in clean technology, sustainable management of forests, increased access to renewable energy, and climate resilient development. For example, the CIFs are expected to install over 12.5GW of renewable energy-enough for the equivalent of nearly 16 million households-and increase crop yields for 440,000 people in Bangladesh through improved water management.

The money provided to the Environmental Transformation Fund under the 2007 comprehensive spending review was a capital grant contribution. The UK's contribution to the CIFs is then used to make loans on highly concessional terms, with a small proportion available as grants. Once loans are repaid to the CIFs, they can be reinvested in further programmes to help other developing countries tackle climate change.

As a first mover in the development of the CIFs, the UK's contribution of £735 million has leveraged over five times this amount ($6.4 billion) from other donors, much of this in the form of grants. These donor pledges are, in turn, leveraging further funds from the multilateral development banks and the private sector. For example, for every £1 of finance for clean technology we have agreed to spend, another £8 is being mobilised from other sources.

In accordance with the International Development Act 2002, no conditions were placed on the UK's contribution, although we are working hard to ensure that the CIFs deliver results and value for money.

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