By Simon De Clercq, Samuel Buvane and Adriaan Tas

Since Mozambique signed the Paris Agreement in 2016, the country has taken several steps towards combating climate change and building climate resilience. At COP26 in Glasgow in 2021, Mozambique launched its Updated Nationally Determined Contributions (NDC) to reflect its raised climate ambitions. The NDC is the national climate plan under the Paris Agreement and lists the country’s planned contributions on climate adaptation and mitigation. Scaling up and accelerating the mobilization of financial resources has been identified as a critical challenge for the implementation of the NDC. Access to climate finance will be important to enable the country’s transition towards a climate-resilient and low-carbon economy.

Recognizing the need to mobilise resources and partners, the Government of Mozambique held a Cooperation Workshop on Climate Finance on July 21 and 22 in Maputo. The event was organized by the Ministry of Land and Environment, in collaboration with the Ministry of Economy and Finance. The objective of the workshop was to facilitate a structured discussion between Mozambican Ministries and representatives from development partners and NGOs about how Mozambique can mobilise additional resources. Over 100 participants, attending physically in Maputo and virtually from across the world, took part in the discussion

The 2-day workshop consisted of sessions with the aim of identifying barriers for the mobilisation of climate finance and developing ways to overcome them. Sessions were organised on mainstreaming climate in the national budget, climate finance from development partners, the country’s experience with local adaptation plans, international climate funds, the role of national institutions in the deployment of climate finance, and the potential of carbon markets and innovative financing instruments (e.g. debt-for-climate swaps, the Adaptation Benefits Mechanism and green bonds).

The discussion showed that there is a need for clear definitions on climate finance and that the country requires a consistent methodology to track climate finance across different ministries. A climate finance taxonomy would help to develop mobilisation strategies and make informed decisions on which fundings sources to prioritise. While Mozambique has started to integrate climate change in some of its financial decisions, it is important that climate change is mainstreamed across all economic sectors. An effective response to climate change will require that all financial flows are made consistent with a path to low greenhouse gas emissions and climate-resilient development.

The sessions showed that, while the country is already mobilising some climate finance, the overall amount is not sufficient to meet the country’s needs. Carbon markets were identified as a way to mobilise additional financing. Participants highlighted that the framework created under Article 6 of the Paris Agreement may be particularly relevant to enable the country’s energy transition. One of the conclusions of the workshop is that a Task Force on Article 6 will be set up in order to allow the country to tap into this type of funding.

Climate Finance Experts from Enabel in Mozambique provided technical support to the Workshop. Through its Study and Expertise Fund, Enabel has established a climate finance team to support the Mozambican Government on planning and mobilization of climate finance. The Workshop received financial support from Belgium and the UK. Both countries are co-chairs of the Coalition of the Willing on Climate Change and Resilience, which was established as group of development partners committed to high-level engagement with the Government of Mozambique on issues related to climate change and resilience. Climate finance is one of the work areas of the Coalition.

The results of the workshop will support the development of a National Climate Finance Strategy. The development process of this strategy was started by the Government of Mozambique in February 2022, with support from Enabel’s Climate Finance Experts. The discussions that took place during the workshop will also support Mozambique’s participation at COP27 in Sharm el-Sheikh later this year, where climate finance will be one of the key discussion points.