Blended finance can perpetuate climate colonialism
Blended finance took centre stage at COP28, with the Green Climate Fund among its supporters. But there are still major problems with the concept that must be addressed before considering any further expansion.
Blended finance is a combination of public concessional finance (i.e. with more generous terms than the market) with private or public resources. The the aim of it is to ‘mobilise’ development finance from other actors.
But, as Eurodad’s new joint report with ActionAid shows, it can perpetuate climate coloniality through the extraction of renewable resources from the global south to power Green New Deals in the global north.
Financial actors outside of recipient countries are favoured in these projects. The largest recipients of blended finance for climate action have been corporates and project developers, who got four-fifths of the finance throughout between 2019 and 2021.
A report by Follow the Money shows that big climate-based funds from the global north charge extractive commissions in countries which are in dire need of resources, further impoverishing their economies.
The high salaries and commissions of such funds are a problematic example of who is actually profiting from the emerging privatised green climate agenda in global south countries.
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