Climate Finance Readiness Index: Tunisia and Morocco on track

Green For South believes that the North African region is in the early stages of implementing the climate mitigation and adaptation measures listed in the NDC.

According to this report recently published by Green For South, a consulting firm based in Toronto, Canada and Casablanca, Morocco, in the Maghreb sub-region of the Cherifian Kingdom, “…is the first company to adopt the relevant regulations and guidelines (mostly voluntary. At this stage) in an interesting climate finance volume of activity (dealing with international funds and issuing green bonds) and effective promotion mechanisms”.

The report also highlights Morocco’s efforts to improve its climate resilience, particularly in terms of mitigation, which requires significant investment. It also mentions the total cost of climate mitigation and adaptation measures included in the Nationally Determined Contribution (NDC), published in June 2022, estimated at $78 billion ($40 billion for 38 mitigation and prevention measures).

In turn, the report points out that Tunisia also has “appropriate regulations (on a voluntary basis) and an interesting volume of climate finance,” adding that it has not issued any green bonds or Sukuk. ‘ and promotional provisions are still limited.

On the other hand, and still according to Green For South, “Algeria has no regulations to support climate action in the financial sector and climate finance activity is still limited”.

“For this firm specializing in sustainable, green and climate finance, Morocco and Tunisia are urged to strengthen their regulations (and make them mandatory) and promote green emissions and launch more awareness and training initiatives,” reports Site.

For its part, Egypt is now “…mandating all regulations related to ESG and climate risks in various financial sectors (banking, insurance and capital markets)”, while Jordan, Morocco, Tunisia and Turkey are not. generally there are voluntary reporting requirements”.

In its assessment, the report takes into account the differences between sub-regions such as North Africa, the Middle East, the Gulf Cooperation Council (GCC) and Turkey, which reflects a fair view of each country according to its local challenges. limitations.

Thus, 14 financial systems are assessed against various criteria to determine the progress each country has made in implementing climate finance mechanisms and instruments. These are Morocco, Algeria, Tunisia, Egypt, Jordan, Lebanon, Iraq, Kuwait, Qatar, Bahrain, Saudi Arabia, United Arab Emirates, Oman and Turkey.

Therefore, the Climate Finance Readiness Index scores 31.33% for the North African sub-region, 40.23% for the Middle East sub-region (Egypt, Iraq, Jordan, Lebanon) and 17.53% for the Gulf Cooperation Council (GCC). region and 46.84% for Turkey.

Regarding the GCC sub-region (excluding Oman), “the authors of the report noted that these countries will rely on their own resources to support climate action, most of which have ESG reporting requirements for public companies and greenfield guidelines. bonds/Sukuk”.

On the other hand, Turkey has a comprehensive set of rules covering climate and ESG risk requirements…

For green financial activity, Morocco is in the first subgroup of countries that mobilize resources from both global green funds and green bond issues along with Egypt, Lebanon and Turkey/”Sukuk”…

Finally, the Green For South report made a number of recommendations to all stakeholders to implement or strengthen the initiatives necessary to contribute to reducing climate risks, namely:

  • creating a regulatory framework for financial institutions to manage climate risks;
  • strengthen market incentives to stimulate both demand and supply for climate finance through investments in green initiatives;
  • to increase knowledge and awareness in this field.

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