First KfW Green Climate Fund project approved

KfW Development Bank will co-finance one of the first "Green Climate Fund" (GCF) projects in Bangladesh. The climate adaptation project will help protect around 85,000 people living on the coasts from storms and flooding. 45 new cyclone protection structures will be constructed in three of the country's poorest regions. A further 20 will be repaired and 80 kilometres of storm-proof access roads built.

At the same time, the project will establish a central climate competence centre that will be responsible for adapting Bangladesh's entire local infrastructure to meet the challenges of climate change in the long term. Furthermore, it will provide space for more than 18,000 primary school children and create more than 1,700 new jobs. The infrastructure programmes will lower local transport costs by some 20%.

"The launch of this project marks an important milestone, as it is a credible step towards increasing the industrialised countries' contribution to climate financing. Their contribution is a significant prerequisite for the success of the Climate Change Conference in Paris to be held this December," said Dr Norbert Kloppenburg, Member of the Executive Board of KfW Group.

Close collaboration with national local building authority

The project in Bangladesh has a volume of USD 80 million. The Green Climate Fund (GCF) is providing a grant of USD 40 million for this purpose. On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), KfW will provide around USD 15 million (roughly EUR 13.6 million), while the Bangladesh government will contribute USD 25 million.

KfW will implement the project together with the Local Government Engineering Department (LGED). The authority is responsible for a large part of the rural road network and for public buildings in small and medium-sized towns and villages in Bangladesh. It accounts for some ten percent of the national investment budget, spending some USD 1 billion annually. KfW has been a close cooperation partner of the authority for many years now.

Key component of international climate finance

Formally established at the 2010 Climate Change Conference in Cancún, the Green Climate Fund is the most important component of international climate finance. It is designed to implement a substantial proportion of international climate finance for the adaptation and mitigation of greenhouse gasses in developing countries. The fund awards grants and loans to accredited implementing organisations, which in turn make these available to countries affected by climate change. In early 2015 KfW became one of the GCF's first accredited implementing organisations.

The GCF now has funds of USD 10.2 billion available for the first planning rounds. "KfW will also be supporting the planned cooperation between the GCF and the private sector by using innovative funding methods. This will make a significant contribution to achieving the international climate targets," said Dr Kloppenburg.