Brussels, 02/12/2010 (Agence Europe) - EU aid to support measures to address climate change problems in developing countries that are particularly vulnerable to global warming has not been granted in the form of loans but of donations, and the 7.2 billion being made available for 2010-2012 is not in dollars but euro, the European Commission said on Thursday.
While difficult discussion is underway in Cancun on ways to fund the aid promised to support efforts for adaptation and mitigation in developing countries ($30 billion for 2010-2012 and €100 billion annually by 2020), the European Commission wished to clarify certain errors on the nature and magnitude of the European offer presented in Cancun on Wednesday in a concern for greater transparency.
Maria Kokonen, who is spokesperson for Climate Commissioner Connie Hedegaard, denied press reports in Brussels whereby the European offer was made up of loans rather than donations. “This is misleading and inaccurate. The European Union has never said that aid to developing countries must take the form of loans rather than grants. For the poorer and least developed countries it is clear that aid must predominantly take the form of grants. The EU does not want to add to their debt burden. Of course, loans do also have a role to play in climate finance, as they can maximise the total amount of money available for funding early action in developing countries by helping to leverage private funds. This is especially true in the area of energy efficiency where many investments are profitable, as they will lower the energy bill of households in developing countries. By establishing revolving funds, many more households will be able to benefit”, she said.
On the subject of loans granted by the EU, via the EIB, the spokesperson explained that these are “often made on highly concessional terms which include a major grant element of up to 75%”.
Finally, the €7.2 billion pledged by the EU in Copenhagen for fast-track funding is currently equivalent to $9.4 billion and therefore accounts for almost one third of the amount promised by the wealthy countries, the Commission states.
This confusion in the nature and amount of European aid is perhaps revealing of the mix-up surrounding the funding of measures to combat climate change, deplored by the former president of Brazil, Lula. “The funding proposal is very confused”, he said.
In order to provide a little clarity for developing countries, the United Nations Development Programme (UNDP) and the World Bank jointly launched, on Tuesday 30 November, the
internet site “climatefinanceoptions.org” which provides a great deal of information on available funding sources. (A.N./transl.jl)