German funding for international climate finance is largely implemented as climate-relevant projects and programs of the bilateral development cooperation (DC) of the German Federal Ministry for Economic Cooperation and Development (BMZ) through the implementing agencies of development cooperation. Its bilateral instruments include general, climate-relevant:
- technical cooperation (TC) is mainly carried out by the “Gesellschaft für Internationale Zusammenarbeit” (GIZ) and
- financial cooperation (FC) is carried out by the KfW development bank.
In addition, there are funds from special initiatives and the Initiative for Climate and Environmental Protection (IKU). The BMZ also allocates funds to political foundations, church organizations and associations, which use them to finance climate-related projects and programs together with partners in developing countries.
The BMZ’s bilateral climate financing thus feeds off the general budget lines for development cooperation – and is therefore also often difficult to quantify in advance (or for the current year). While there are usually planned figures for climate-related development cooperation, they do not represent binding targets. In any case, it is hardly possible to make a clear distinction between measures that contribute to climate protection and adaptation to climate change and those that promote other development-relevant aspects. In terms of planning and implementation, most of the projects and programs do not differ from those of traditional development cooperation, but contribute to climate protection and adaptation to climate change in different ways.
Objectives
In 2021, the BMZ has defined its goals and strategic priorities in core area strategies. In the core area strategy “Responsibility for our Planet – Climate and Energy“, three priorities are defined: (1) climate change mitigation and adaptation, (2) renewable energy and energy efficiency, and (3) sustainable urban development. In the core thematic strategy “Responsibility for our Planet – Sustainable Agri-Food Systems – A World without Hunger“, priorities are defined for (1) food and nutrition security. (2) rural development and (3) agriculture. Here, climate protection and adaptation are not explicitly anchored in the strategic priorities. However, there are many cross-references to it, e.g. in the protection of natural resources.
Key developments
The BMZ has made great improvements in transparency in recent years. Information on projects counted as climate finance is available on the BMZ website. This contains project lists with all funded projects since 2010.
The BMZ does not have its own monitoring and evaluation system for climate financing. This is implemented via the implementing organisations. GIZ, for example, has a system of central project evaluations (ZPE), in which 40% of the total portfolio of projects is evaluated. KfW also conducts random ex-post evaluations of approximately 50% of its projects about three to five years after completion and publishes short reports on its website. In addition, both organisations conduct thematic and strategic evaluations. However, no climate-related evaluation has been published in recent years.
Funding volume
The size of the budget is determined each year by the German parliament (Bundestag). In the BMZ budget (Section 23), budget funds of just under 2.7 billion euros were spent in 2021. Euro were spent. In addition, loans from budgetary sources, investment subsidies and grant equivalents for development loans amount to 1.1 billion euros. Euro. Multilateral funds (grants for multilateral climate funds and other international institutions and programmes as well as the proportional contributions for climate protection and adaptation for the multilateral development banks) amounted to 918 million euros in 2021. Finally, Germany also includes the public funds mobilised from the BMZ budget (2021: 3.2 billion euros).
For 2022 and 2023, the bilateral budget for climate change mitigation and adaptation is expected to decrease to just over 2 billion euros. Euro. (as of February 2023)
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