Climate funding takes 45 per cent share of total investment so far in 2017
The President of the European Bank for Reconstruction and Development (EBRD), Sir Suma Chakrabarti, will outline the Bank’s rapid progress towards meeting ambitious climate finance goals at this week’s meetings of the World Bank and International Monetary Fund.
The EBRD President will meet senior officials from both recipient and donor countries, as well as the heads of other international financial institutions (IFIs).
He will also deliver a strong message of support for the China-led Belt and Road Initiative during a panel discussion at the Center for Global Development (CGD), and outline how best to put in place projects under the programme of investments linking Asia with the rest of the world, including many of the Bank’s countries of operations.
Sir Suma, one of the co-hosts of the CGD event which will look at both the opportunities and challenges of the new initiative, will point out how partners in the Belt and Road Initiative, including multilateral development banks, can help make it a sustainable success.
In meetings with other IFI heads, the EBRD President will discuss a G20 review on global financial governance, which includes an assessment of the work of multilateral development banks, including the EBRD.
Speaking ahead of the Washington talks, Sir Suma said: “I welcome the review to ensure that the multilateral system is equipped to deliver the global agenda, including the Sustainable Development Goals and implementation of COP21. It will allow us to discuss how multilateral development banks can focus even more on mobilising private finance.”
The EBRD has maintained a strong flow of high-impact investments across its regions in 2017, focusing particularly on climate finance, which is in line with its commitments under the 2015 Paris Climate Agreement.
Combining a high level of financing with continued support for economic reforms, the EBRD delivered 192 projects worth €4.8 billion in the first eight months of 2017. It expects to report another strong operational result for the whole year, after a record €9.4 billion in 2016.
The EBRD invests in 38 emerging economies across three continents according to a set of criteria that aim to make its countries more competitive, better governed, greener, more inclusive, more resilient and more integrated.
Green financing has assumed a special significance since the global climate accord in Paris, when the EBRD unveiled its Green Economy Transition approach, under which it aims to dedicate 40 per cent of its annual investments to climate finance by 2020.
So far in 2017, the Bank has exceeded that target, with climate finance taking a 45 per cent share of the overall investment total in the first eight months of the year.
Green economy projects this year include the EBRD’s latest solar investment in Jordan, which brought the total installed capacity of power projects supported by the EBRD in the country to more than 1,000 MW, 75 per cent of which are in renewables.
The first projects have now been rolled out under the EBRD’s US$ 500 million framework for renewable energy in Egypt while in Greece the Bank signed its first deal under its €300 million Greek Renewable Energy Framework.
Alongside the green investment, the EBRD has also put a high priority on helping to build more inclusive economies. The number of projects with a gender component, such as helping women entrepreneurs receive bank finance or increasing job opportunities for women, rose to 22 in the first eight months of 2017, up from 13 a year earlier.
The Bank continued to help build economic resilience in its countries of operations with a high number of local currency and local market development projects that reduce risks linked to foreign currency borrowing. It also maintained a strong flow of finance to small and medium-sized enterprises.
The EBRD was set up in 1991, initially to help promote open market economies in the former communist countries of central and eastern Europe and the former Soviet Union.
Its successful private sector business model which combines innovative financing solutions with strong support for policy reform has since been applied to a new set of countries, including Turkey and – in the wake of the Arab Uprising – in North Africa and the Middle East, demonstrating its ability to work effectively in various regions.
The EBRD cooperates closely with other multilateral development banks, helping to deliver maximum impact on the ground by ensuring that each institution makes a contribution according to its own particular skills.