CONTEXT

Situated along the eastern coast of the Mediterranean Sea, Lebanon is a densely populated, urbanised nation that has grappled with many economic and humanitarian challenges in recent years. These adversities have resulted in significant economic shortfalls and increased financial strain on the government, the private sector and its populace to opt for sustainable paths.

In tandem with these difficulties, Lebanon is confronted with escalating consequences of climate change, including heatwaves, droughts, wildfires, and storms. The widespread dependence on generators running on fossil fuels exacerbates the emission of greenhouse gases like carbon dioxide into the atmosphere. Compared to 1994, Lebanon experienced a staggering threefold increase in greenhouse gas emissions, with an average annual growth rate of 6 percent between 1994 and 2019. Energy production accounted for most of these emissions, with transport, industrial processes, waste management, and agricultural practices following suit in contributing to the increase.

Even against this tumultuous backdrop, Lebanon is trying to improve its environmental responsibilities. In collaboration with the UNDP’s Climate Promise initiative, the country has revised its Nationally Determined Contributions (NDC) and established ambitious goals. These goals encompass a 20 percent reduction in greenhouse gas emissions compared to baseline projections and a substantial increase in the use of renewable energy sources in the electricity and heating sectors by 2030. The updated NDC also incorporates a comprehensive adaptation strategy that prioritises measures such as agricultural resilience, sustainable resource management, and nature-based solutions to mitigate the impacts of climate change and safeguard public health.

PROJECT

This project aims to assist the Lebanese government in establishing the Lebanon Green Investment Facility (LGIF) in partnership with UNDP Climate Promise 2.0. It involves developing a robust Green Climate Fund (GCF) Funding Proposal (FP) to mobilise concessional funds from the GCF for LGIF. The objective is to enable Lebanon to achieve its NDC through private sector investment and a blended finance approach.

Lebanon’s negative credit rating from international agencies, compounded by the government’s default on international loan payments in 2020, has limited the private sector’s financial access. The fragile state of the banking sector and the cessation of development funding have made investing in green and sustainable  ventures very challenging. Lebanon’s private sector has showcased resilience, adaptability, and innovation in manoeuvring through this difficult environment, striving to maintain operations despite the numerous challenges

Given the depleted public funds, withdrawal of most international donors and collapsing financial system , LGIF strives to emerge as a pivotal force and investor in climate change mitigation and adaptation for the country. Its objective is to stimulate climate financing to facilitate Lebanon’s energy transition by providing financial resources and mechanisms to diverse industrial and commercial sectors to attain national sustainable and low-emission development goals.

EXPECTED RESULTS

BASE is collaborating with Lebanon-based OTB Consult to develop a GCF FP rooted in local realities and needs. Drawing on key inputs from UNDP Lebanon, the Lebanese Ministry of Environment, and Cedar Oxygen, LGIF’s proposal will comply with GCF requirements and support Lebanon’s climate objectives. 

The FP will comprehensively evaluate the projected impact on emission reductions and social benefits, demonstrate market potential, ensure long-term sustainability, consider gender considerations, highlight opportunities for scaling up, and ensure that the views of marginalised groups, such as women and refugees, are accounted for.