Green & Resilience Banks: How the Green Investment Bank Model Can Scale Up Climate Finance in Emerging Markets
Report
The November 2016 paper—authored by the Coalition For Green Capital, NRDC, and Climate Finance Advisors—shows how green investment banks are succeeding in countries such as Japan, the United Kingdom, Malaysia, Australia, and the United States.
Green investment banks are specialized public-financing authorities set up to persuade private investors to increase and accelerate their investment in renewable energy and energy efficiency. The paper also explores the potential of the green investment bank model in emerging and developing economies. Emerging markets will need to leverage both public and private investment to address climate change. The paper notes that around the world, significant amounts of capital will be needed to finance the clean energy and other infrastructure projects required to meet the climate change mitigation and adaptation objectives of the Paris Agreement. Most of this financing will have to come from private sources. By some estimates, the required investment in sustainable infrastructure globally is up to $6 trillion per year, or $90 trillion by 2030. These investments can also contribute to the United Nations Sustainable Development Goals, including those focused on increasing access to sustainable energy. Existing green investment banks are showing success.
As reported in the paper, after only a few short years of operation, existing green investment bank institutions have mobilized $22 billion in private capital by committing or investing only $6.2 billion of public money. The paper highlights how green investment banks are well placed to make effective and efficient use of climate funds from international facilities such as the Green Climate Fund, the Global Environment Facility, and the Climate Investment Funds. In emerging and developing economies, green investment banks could make a difference in countries’ efforts in achieving the climate goals articulated in their commitments under the Paris Agreement, serve as a locus of financial innovation in local markets, and blend and coordinate investments by diverse public, private, international, and domestic investors.
Webinar
This December 2016 webinar features the authors of Green & Resilience Banks: How the Green Investment Bank Model Can Play a Role in Scaling Up Climate Finance in Emerging Markets, which was officially released at an official side event of COP22 in Marrakech, Morocco.
The authors—Stacy Swann (Climate Finance Advisors), Jeffrey Schub (Coalition for Green Capital), and Douglass Sims (NRDC)—shared highlights from the report, including information about the creation and capitalization of Green Investment Banks (GIBs) across the world that have had success in attracting private capital to low-carbon, climate-resilient (LCR) infrastructure investments.
In addition to outlining the early successes of existing GIBs, the authors provide an overview of the newly released paper's insight into how the GIB model can a useful approach for countries with developing and emerging economies to consider. Because of their focus on acting at a local and transactional level, the GIB model could help countries achieve climate goals, be a locus of financial innovation, and serve as a partner for international climate and development finance providers.