The Green Bank Network (GBN) is a membership organization formed to foster collaboration and knowledge exchange among existing Green Banks, enabling them to share best practices and lessons learned. The GBN also aims to serve as a source of knowledge and a network for jurisdictions that seek to establish a Green Bank.

Conférence des Nations Unies sur les changements climatiques - COP21 (Paris, Le Bourget)

COP21 in Paris, December 2015

At the Paris COP21 conference in December 2015, UK Green Investment Bank, the Australian Clean Energy Finance Corporation, the Japan Green Fund, Malaysia Green Technology Corporation the Connecticut Green Bank and the New York Green Bank announced the formation of the Green Bank Network. These Green Banks are working with two non-profit organizations, the Natural Resource Defense Council (NRDC) and the Coalition for Green Capital (CGC), to build the Green Bank Network, with funding from ClimateWorks for 2016.

The Green Bank Network will collect, organize and share Green Bank know-how through virtual and in-person platforms to facilitate the exchange of information. Over time, the GBN aims to increase the flow of capital to LCR infrastructure by helping private sector investors and developers further partner with Green Banks; driving standardization of deal structures, contracts and metrics; increasing visibility and transparency of Green Banks; and tracking progress made with key indicators. In conjunction with the ongoing progress within individual Green Banks, these activities will increase the scale, scope and efficiency of LCR infrastructure finance.

The International Energy Agency estimates that in order to deliver on the climate pledges made by world leaders to the UN, $13.5 trillion must be invested in energy efficiency and low-carbon technologies between 2015 and 2030, or USD 840 billion annually.[1] Investment in renewable energy alone will require USD 900 billion in 2030, up from USD 286 billion in 2015.[2] Filling this investment gap will require much more than public sector support; private finance will have to supply the capital to make the transition to a low carbon global economy a reality.

As Christiana Figueres, former Executive Secretary of the UNFCCC, remarked to a group of investors and finance professionals at the 2016 Ceres Investor Summit: “The finance sector will make the difference… you cannot build what you do not finance.”

Geothermal power plant

While clean energy markets have made tremendous advances in recent years, immature and illiquid markets are still a major barrier to realizing the full extent of the shift in global energy investment. Green Banks and Green Bank-like entities are uniquely positioned to help “mainstream” LCR investment. Green Banks work to animate private investment in LCR by working closely with the private sector and using market-responsive strategies like credit enhancements and other risk mitigants, project aggregation, contract standardization and demonstration investments to build a track record and increase the confidence of private investors. Understanding that public capital is often in short supply, Green Banks use the limited public resources available to connect projects with the capital markets and unlock new pools of capital such as institutional investors and the green bond market.

The small but growing cadre of existing Green Banks and other PPP financing entities are proving their individual effectiveness and impact in their home markets, but more rapid progress spanning more markets is needed. Green Banks have developed many new successful tools and programs, and there is a growing need to share best practices of this emerging model.

[1] IEA http://www.worldenergyoutlook.org/media/news/WEO2015_COP21Briefing.pdf

[2] http://www.irena.org/DocumentDownloads/Publications/IRENA_Risk_Mitigation_and_Structured_Finance_2016.pdf