The EBRD is participating in the COP26 climate conference, which will begin in Glasgow on Monday, to strengthen the international delivery of climate finance.
Together with other multilateral development banks (MDBs), the Bank plays a leading role in helping to decarbonise economies and enable the transition to a more sustainable future, with a focus on involving the private sector in tackling climate change. The need to involve the private sector will be highlighted during COP26 as particularly important.
EBRD President Odile Renaud-Basso, who will lead the Bank’s delegation, said: “We want to give our countries the confidence to be ambitious and brave in their net zero goals. The world needs climate action now. We have the capital, we know how to mobilise financing and we have the technical expertise to deliver crucial support. Countries that commit to the green transition – unparalleled in economic history for its speed and scale – will find the EBRD with them every step of the way.”
The 2021 United Nations Climate Change Conference is key to delivering climate action, with countries expected to raise the ambition of their emission reduction commitments, with the goal of limiting global warming to to 1.5C. Financiers, including multilateral development banks (MBDs) like the EBRD, are preparing to deliver more support to realise those plans.
The EBRD is supporting these goals not only with investments in green energy, energy efficiency and energy savings. The Bank is also supporting especially exposed countries like Kazakhstan or Uzbekistan to develop roadmaps to low or zero carbon economies and it is addressing the need for a ‘just transition’ with recent investments, for instance in North Macedonia.
“In the last 12 months climate action has really accelerated with a whole series of net zero commitments, notably from China, the US, the EU, the UK, Japan and others. We're especially pleased that in addition to our EU countries of operation, from the EBRD region Kazakhstan and Turkey have also made net zero commitments,” said Harry Boyd-Carpenter, Managing Director for Green Economy and Climate Action. “But at the same time emissions keep rising so there is a huge amount of work needed to turn those commitments into practical plans and real investments in low-carbon transition. That's what we're going to COP to focus on – turning that ambition into reality.”
The EBRD brings two recent commitments of its own on enhancing its climate action. One, made in October 2020, is to increase the proportion of its green investments to more than 50 per cent of the total by 2025. The second, made in July 2021, is by 2023 to align all its operations with the goals of the Paris Agreement. These further enhance its work fostering the green transition in the 38 economies in Europe, Asia and Africa where it invests.
On COP26’s Finance Day, 3 November, the EBRD will launch its action plan on Mobilising Private Capital for Climate Finance, which sets out a comprehensive suite of tools to scale up private sector investment in EBRD countries of operations. At the heart of this plan is a focus on policy activities to develop the enabling regulatory environment that in turn makes low-carbon investments commercially viable. These activities, from the implementation of renewable energy auctions to the design of low-carbon sector pathways, will trigger sustainable demand for climate-friendly investment and in turn for private capital. Based on this plan EBRD expects to double its private climate mobilisation by 2025.
A major challenge in emerging economies and developing countries is a shortage of bankable climate projects. Several factors limit the supply of such projects. The most fundamental is the lack of either an implicit or an explicit carbon price. Without a carbon price, many green investments are not commercially viable.
The EBRD delegation at the conference will participate in more than 30 events covering a wide range of topics, including how to make direct and indirect finance align with the Paris Agreement, helping countries design roadmap and rules for a new low-carbon economy (Long-Term Strategies) and ensuring that workers in industries impacted by the low-carbon transition are not left behind (Just Transition). A joint MDB statement on securing biodiversity and nature-based solutions will go beyond the principle of “do no harm” to look for positive investments in the future.