US collaborates with Azerbaijan on Climate Finance Action Fund

The United States is actively collaborating with Azerbaijan on the establishment of a Climate Finance Action Fund (CFAF), John Podesta, Senior Advisor to the US President for International Climate Policy told a briefing in Baku.

Podesta expressed optimism about the initiative, noting that discussions are ongoing to finalize details and secure additional resources aimed at supporting the least developed economies, Caliber.Az reports via local media.

 He emphasized that while progress is being made, it remains a work in progress. Podesta indicated that further updates will be shared during upcoming meetings in Washington, scheduled to coincide with the World Bank meetings in two weeks, as well as during a return visit to Azerbaijan in November.

Azerbaijan announced the Climate Finance Action Fund (CFAF) to invest in climate action in the developing world. CFAF will be capitalised with contributions from fossil fuel-producing countries and companies across oil, gas and coal, and Azerbaijan will be a founding contributor. Members will commit to transfer annual contributions as a fixed-sum or based on volume of production.

CFAF will be a catalytic public-private partnership fund, mobilising the private sector and de-risking investment. The fund will also contain special facilities with concessional and grant-based support to rapidly address the consequences of natural disasters in the developing countries in need.

CFAF will provide off-take agreement guarantees for small and medium-sized renewable energy producers and first-loss capital for green industrial projects. The fund will also have a focus on the food and agriculture sector as a priority to protect livelihoods and achieve net zero. Profits generated from projects will be reinvested in the fund.

By Vafa Guliyeva