On behalf of: Organisation
Organisation: Danish Red Cross
Consultation Response:
Please find below comments to the document:
- Comment to p.6: Loan portfolio guarantees cover “a pre-defined portion of a bank’s future portfolio,” but the document doesn’t say how that portion is defined. Is it limited to SMEs, agri-business, or women- and youth-led businesses? How will IFDK check that banks are making new loans, not just moving existing ones under the guarantee? We suggest these criteria be written into each guarantee agreement, with clear reporting obligations to track.
- Concern re. p.6 and p.15: Adaptation is named as a priority, but there is no target. Section 3.4 says the focus is “in particular climate adaptation.” Yet the climate target (>50%) doesn’t separate adaptation from mitigation, and all adaptation targets in the results framework are TBD. Without a defined number, the portfolio is likely to drift towards mitigation, which is easier to finance. We suggest an indicative share for adaptation, which can be reviewed intermittently.
- Inconsistency p.15: Bank guarantees don’t count towards climate finance. Only fund and MDB guarantees are measured for climate finance. But bank lending to farmers and small businesses often present significant opportunities for adaptation, for example irrigation, storage, and climate-smart agricultural practices. Consider making bank guarantees eligible to count.
- Inconsistency re. p.7, p.11 and p.15: The document reference two different fragile-country targets. The text says 30%, while the results framework says >40%. Clarify which one applies. Similarly, the definition of “fragile-country” is not always universal. IFDK should clarify what qualifies as fragile in this context.
Concern re. p.24 and p.15: The document states that IFDK won’t issue guarantees where risk cannot be properly quantified. In many fragile countries, it is the norm that risks may not always be quantified. Yet the target for fragile countries triples, from 13% to 30–40%. How will IFDK reconcile the two?
- Comment re. page 15: Is MDB capital counted as private mobilisation? The OECD methodology counts only private finance as mobilised; MDBs are official (public) sources. Since MDB guarantees account for DKK 13.5bn of the DKK 24bn mobilisation target (p.15), IFDK should clarify how this is counted and potentially report it separately from private mobilisation.
