Ahead of climate talks in Paris, EBRD President urges governments and markets to recognise new business opportunities for green growth
The EBRD President, Sir Suma Chakrabarti, will deliver a speech tomorrow where he will outline the EBRD’s vision of the green economy, with a focus on reform and private sector participation. The speech comes as the world is looking ahead to the COP21 climate talks in Paris in December, where a major climate agreement is expected to be reached.
Speaking at Sida, the Swedish International Development Cooperation Agency, during his visit to Stockholm, Sir Suma will call on governments and markets to recognise the new situation that exists in the field of climate finance. He will say that new business opportunities are being offered today by new technologies and business models which did not exist until recently, and now is the time to seize those opportunities.
Sir Suma will say: “We really do have a chance to transform the world’s economy for the better and, with COP21 fast approaching, the next few weeks will be crucial for that enterprise. ‘Green’ and ‘growth’ no longer have to be viewed as opposites or a trade-off. They are now two ideas that complement each other.”
The President will also emphasise the EBRD’s approach to combating climate change by strengthening the role of private sector finance and policy reform. But he will say that, in many countries, concessional finance will continue to play a key role, partially because of remaining fossil fuel subsidies and the absence of a meaningful carbon tax. (Sweden is one of the few countries with a functioning carbon tax system.)
President Chakrabarti’s speech will be published in full on ebrd.com at 10:00 GMT on Friday 13 November.
The EBRD has recently adopted a Green Economy Transition (GET) approach, a new milestone in the Bank’s climate finance effort. The GET approach sets new targets for green EBRD financing which will aim to reach 40 per cent of total annual financing by 2020. In absolute terms, the EBRD expects to invest about €18 billion in green economy projects in the next five years – the same amount as the Bank has invested over the last decade.
The Bank, created to promote transition to a free market economy in the countries of the former Soviet bloc, now works in 36 countries from Morocco to Mongolia. In most of them, it is successfully working to enable private sector financing for renewable energy on a market basis. EBRD-supported innovative policy reforms have opened to private investors such sectors as hydropower in Georgia, wind power in Morocco, geothermal in Turkey and solar power in Egypt and Jordan.
Today the EBRD invests more in renewable energy than conventional power generation (over €4 billion since 2006); EBRD-financed renewable energy has reached the same level as the total energy production of Romania (60 million MWh per year).
The new GET approach will mean even more projects in the Bank’s countries of operations will have a sustainable energy and resources element.
Sweden, where the EBRD President is making his climate speech, is a major donor for climate finance in the EBRD region. It proposed the E5P – the Eastern Europe Energy Efficiency and Environment Partnership Fund – during its EU presidency in 2009, and contributed about €242 million in donor funds to EBRD projects, mostly related to energy and resource efficiency, in the EU neighbourhood region.