Energy Gang – Live from COP29: Everyone is Talking About Climate Finance. What Do They Mean?

Date: November 18, 2024
Host: Ed Crooks (Wood Mackenzie)
Guests: Raquel Moses (Caribbean Climate Smart Accelerator), Ben Attia (Allied Climate Partners), JP Tier (AIIB)

Episode Theme & Purpose

Recorded live at COP29 in Baku, Azerbaijan, this special Energy Gang episode dives into the hot topic of the summit: climate finance. With world leaders debating how to mobilize and deploy trillions of dollars for the energy transition, Ed Crooks and his expert guests strip back political jargon to clarify what “climate finance” actually means on the ground. The discussion exposes the gaps between rhetoric and reality and interrogates why so much pledged capital still struggles to support projects that deliver real-world decarbonization.

Key Discussion Points & Insights

1. What Is “Climate Finance,” Really? (00:38–07:00)

• Nuances in “climate finance”: The term means different things to different people—grants, equity, commercial loans, or concessional loans. Each has distinct uses and requirements.
  • Raquel Moses: "Language is so important when you’re talking about climate finance… I may understand you to say grants, whereas somebody else may think equity." (03:10)
• The need for specificity: There’s frustration over big announced numbers (like $100bn/year) often lacking clarity on nature, source, or usability.

2. Bottlenecks: Not Money, but Bankable Projects (07:00–10:00)

• More money than projects: Both Moses and Attia argue the major hurdle isn’t headline funding but a lack of well-prepared, investment-ready (“bankable”) clean energy projects.
  • Moses: "At the moment in certain areas I have more money than I have projects to fill." (04:21)
  • Attia: "The availability of bankable projects and that pipeline is just way too small." (04:48)
• Project preparation gap: Early-stage projects lack risk-tolerant capital to reach the point where traditional investors engage.
  • Attia: Allied Climate Partners provides “catalytic junior equity”: early, risk-absorbing investment to unlock later, larger private flows. (05:23)
  • Moses: There are “29 project preparation facilities for Innov alone in our region, and still we’re not seeing enough bankable projects getting to commercial close.” (07:09)

3. Why Aren’t Projects Getting Funded? (07:40–14:10)

• Risk aversion at the start: Early development is often deemed too risky by commercial investors; thus, projects stall before reaching feasibility.
  • Attia: "Capital doesn’t start flowing until the likelihood of the project actually reaching FID… crosses certain thresholds." (08:45)
  • Moses: “If you don’t address the bottleneck… you are just increasing the pool of frustrated investors.” (06:57)
• Need for philanthropic or “first loss” capital: Foundations or public-purpose investors can unlock deals by taking initial risks (10:05).
  • Moses: “If you get that gap filled, there is no end of commercial returns available on the other side.” (10:05)

4. The Role and Limits of Multilateral Development Banks (MDBs) (11:12–17:53)

• MDBs/DFIs (e.g. World Bank, IMF) are pivotal but structurally limited in taking early-stage or high-risk positions. They work best once projects reach a certain maturity.
• Calls for reform: There’s consensus on reforming global development finance to allow greater risk appetite and flexibility.
• Real need: Aggregating small, complex deals across jurisdictions to build scale and attract big investors (15:49).

5. Major Initiatives: The Bridgetown Agenda & Caribbean Experience (19:34–25:48)

• Bridgetown Initiative: Led by Mia Motley (Barbados), this seeks to:
  • Reform global finance to consider vulnerability, not just GDP per capita.
  • Enable debt relief/restructuring and fairer, more accessible climate finance distribution.
  • Recognize small island states’ unique needs.
  • Moses: “It talks about things like reforming the global financial systems… I think this Bridgetown Initiative is changing the way that we think about these things.” (19:36)
• Currency risk skepticism: Moses argues currency risk is sometimes overstated in the Caribbean (23:16).

6. Climate Finance Lessons & The Data Deficit (28:00–32:38)

• The $100bn target was arbitrary, not needs-based and largely delivered as debt—not ideal for vulnerable states.
  • Attia: “Almost 80% of it was structured as debt… most at market rate.” (29:57)
• Need for better data, specificity in funding types, and impact measurement.
• Examples of underwhelming “climate spend” accounting: e.g., reporting expenses for movie sets or chocolate factories as climate finance (30:00).

7. Cautious Optimism, Politics, and COP Outcomes (31:28–35:34)

• US election uncertainty (Trump victory) looms large, but global finance momentum may persist regardless.
  • Moses: “I have great faith that eventually we’ll get it right. I am certain that we will not fall over the precipice… I think we have a marketing problem...” (32:38)
  • Attia: “The COP process is a useful one… there are negotiated outcomes and transactional outcomes, and the role of those transactional outcomes… has become increasingly significant.” (34:10)
• Key takeaways: Progress comes not just from formal negotiations but from side deals and growing synergy between public and private actors.

Notable Quotes & Memorable Moments

• On definitions and maturity in the debate:
  • Raquel Moses (03:07): “It’s time we started having a really mature conversation about disaggregating climate finance… 100 billion is not meaningful unless I understand how do I get to use that money.”
• On the core bottleneck:
  • Ben Attia (04:48): “We’ve identified that the availability of bankable projects and that pipeline is just way too small… for all forms of infrastructure, there are these binary risks: will you get a permit, is this the right site… the cost of mitigating those risks is actually pretty low in most cases, but the capital for those early needs is extremely scant.”
• On equity vs. debt:
  • Moses (14:13): “I can shake a stick and drown in debt… the fact is equity in our region… is a third the level per capita as other markets, and we have a risk-averse market.”
• On hope amid slow progress:
  • Moses (28:45): “It reaches a tipping point, right? So it’s slow, slow, slow… and then all of a sudden the water starts to flow downhill.”
• On “just transition” and opportunity:
  • Attia (34:10): “This is the greatest wealth creation opportunity of our time… and it’s about making sure it happens not only quickly, but also in a fair and just way.”
• On the meaning of COP:
  • Moses (32:38): “What comes out of the negotiation sometimes for me is neither here nor there… a lot of it is run by non-state actors.”
• On reforming global systems:
  • JP Tier (40:03): “The future of competitiveness lies in sustainability. If you are not green… nobody’s going to do business with you.”

Extended: The MDB Perspective with JP Tier (Asian Infrastructure Investment Bank)

Starts 35:42

• MDBs' core challenge: Financing infrastructure for tomorrow—balancing climate and development goals.
• Asia’s emissions and growth context: Largest emitters also have powerful needs for economic growth; per capita emissions and incomes remain low.
• Development first, sustainability second? Integration and alignment of both is critical.
  • JP Tier (39:47): “If you have a climate conversation without a development conversation with the Global South, you’re not going to get anywhere.”
• On “carbon border adjustment mechanisms” (seabam):
  • Potentially helpful if truly about carbon, but broader tariffs risk undermining global trust and cooperation on climate.
• Global solidarity needed: Policies must avoid being seen as market-protectionist; the intent and holistic consistency are key.
  • JP Tier (44:19): “It’s okay to tax carbon, but you cannot just throw in everything that denies market access to the South.”

Important Timestamps

• 00:38: Introduction to climate finance—why language matters.
• 03:07: Disaggregating types of climate finance.
• 04:21: The real bottleneck: project pipeline, not funding.
• 05:23–05:56: Early-stage financing as a key solution.
• 07:09: Regional challenges in the Caribbean—a dearth of bankable deals.
• 10:05: Role of “first loss” and philanthropic capital.
• 14:13: The debt/equity imbalance in climate funding.
• 19:36: Bridgetown Initiative explained.
• 23:16: Currency risk overestimated in the Caribbean.
• 28:45: Lessons from the $100bn climate finance goal.
• 29:57: Flaws in what counted as “climate finance.”
• 32:38: On hopes and realistic expectations for COP29.
• 34:10: Growing importance of side deals and transactional progress.
• 35:42: MDB segment with JP Tier—Asian Infrastructure Investment Bank’s approach.
• 39:47: Pairing climate action with development is the only viable path.
• 44:19 – 46:53: On carbon border taxes, global trade tension, and solidarity.

Tone & Delivery

The discussion is candid, slightly exasperated with the pace of high-level action, but ultimately optimistic—anchored in real-world delivery and practical finance. The panelists bring both frustration and hope, using plain language and real examples to demystify “climate finance,” and repeatedly call for more nuance, integrity, and operational reality in the global debate.

Summary for Listeners

If you’re confused by the buzz around “climate finance” at COP29, this episode is essential. It brings high-level pledges down to earth, revealing why projects aren’t being funded, what kinds of money are truly needed, and where reform must target. With perspectives from the Caribbean to Asia, you’ll leave better equipped to untangle the jargon and understand exactly what has to change to make those promised trillions move the needle on climate action.