The COP27 proceedings on addressing the issues of Climate Action, Mitigation, Adaptation and Finance concluded in Sharm El Sheikh on 18 November 2022. It is too early to gauge the impact of the commitments pledged, such as the Loss and Damage Fund for climate vulnerable states, or the perceived inaction or delays towards achieving the Net Zero targets set in the 2015 Paris Agreement and the broader UN SDG Agenda.

The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), notwithstanding, had a successful and engaging COP27 co-organizing three timely side events, three fireside chats, and signed an MoU with the Africa Finance Corporation (AFC) to jointly deliver mark-to-market Climate Action projects using ICIEC’s de-risking solutions in the African Member States common to both.

Mr. Oussama Kaissi, CEO of ICIEC, participated in a Panel Discussion on food security and climate change which focussed on the IsDB Group’s US$10.54bn Food Security Response Program (FSRP). ICIEC, stressed Mr. Kaissi, recognizes that climate risk financing and food security challenges for Member States are enormous. The Corporation’s support for the FSRP is underpinned by its initial contribution of US$500m in PRI and credit insurance coverage, of which US$150m has been disbursed to date, covering several transactions.

ICIEC and the IsDB Group play their respective roles in several food security projects in the Member States. As the multilateral insurer of the Group, ICIEC’s suite of credit and political risk insurance tools complement local value chains and support the importation of capital goods, Agri-inputs and help strengthen local capital and expertise. Partnerships with stakeholders in financing agricultural projects are vital. Mr. Kaissi is confident that the FSRP will gain precedence over the medium-to-long-term.

In the second side event co-organized with InsuResilience on ‘The role of partnerships in accelerating climate finance, de-risking, and climate action,’ Mr. Kaissi called on all stakeholders to redouble their efforts to contribute towards the enormous and growing challenges of Climate Action, Mitigation, Adaptation, Finance, De-risking, Delivery, and Impact. ICIEC’s recent membership accession to InsuResilience as such reinforces its commitment to developing innovative financial solutions towards climate action and capacity building in cooperation with Platform partners in Member States such as The Gambia and through other initiatives, including the Global Shield mechanism.  

The panel discussion participants included H.E. Rohey John Manjang, Minister of Environment, Climate Change and Natural Resources of The Gambia, Mr. Jochen Flasbarth, State Secretary in the Federal Ministry for Economic Development and Cooperation, Germany, and H.E. Kenneth Ofori-Atta, Finance Minister of Ghana.

The third side event, co-organized with the Commercial International Bank of Egypt (CIB), focused on the bankability of adaptation food security projects in Africa and the role of political and credit insurance in bridging the financing gap, and how Egypt’s National Water, Food and Energy (NWFE) programme is contributing to this process. Mr. Kaissi noted that developing countries often have problems attracting requisite levels of inward private FDI flows, partly because projects are not bankable. Projects involving Climate Adaptation in food, water, and energy security present significant challenges for private investors because of various risks.

Private sector engagement in climate finance goes in tandem with credit enhancement. ICIEC, in this respect, is uniquely positioned to deliver through its sustainability policies and access to its member state’s national and subnational bodies, which engage with relevant climate action projects and transactions. There is also room for alternative financing and risk mitigation solutions such as Green Sukuk, given the estimated global climate project financing shortfall of US$1.15 trillion. The NWFE, he noted, could be a blueprint for projects in Africa.

The final side event was on Climate Finance in Africa, focusing on the challenges in financing renewable projects and the role of credit and political de-risking. Representatives from MUFG, BADEA, KfW, and AFC Capital discussed various aspects of Africa’s climate adaptation finance challenges.

The three fireside chats and talks featured lively discussions on the crucial role of renewable energy, the challenges in the transition to clean energy, The Middle East Green Initiative, and the role of technology and finance. The fireside chats were with Mr. Paddy Padmanathan, Vice Chairman & CEO of ACWA Power, KSA, Lord Adair Turner, Chair of the Energy Transitions Commission and Chairman of Chubb Europe, UK, and H.H. Noura Turki Al Saud and H.H. Mashal Alshalan, Founding Partners of AEON Strategy in Saudi Arabia.