Green Investment Banks Key to Achieving Global Climate Goals

Coalition for Green Capital, NRDC and Climate Finance Advisors released a new policy working paper on potential of Green Banks to drive investments needed to meet the goals of the Paris Agreement.

MARRAKECH (November 14, 2016) – Leaders in global green investment today released a policy working paper, Green & Resilience Banks: How the Green Investment Bank Model Can Play a Role in Scaling Up Climate Finance in Emerging Markets, at an official side event of the 22nd Conference of the Parties (COP22) to the United Nations Framework Convention on Climate Change in Marrakech, Morocco.

The paper, authored by the Coalition For Green Capital, the Natural Resources Defense Council 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 US$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 help countries meet their 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.

Jeff Schub, Executive Director of the Coalition for Green Capital, said, “This report lays out what could be a powerful institutional framework for driving climate investment. Green Investment Banks have already proven themselves a successful model for increased public and private investment in clean energy. CGC believes that the model can be adapted for new markets and play a critical role in building local institutional capacity. By tapping into international and domestic capital, national Green Investment Banks could accelerate achievement of climate targets.”

Doug Sims, Director of Strategy and Finance for NRDC’s Center for Market Innovation, said, “Green Investment Banks have a growing track record in mobilizing the billions for clean and resilient infrastructure and that needs to grow to trillions.  The model of an institution with special skills and a narrow mandate to increase investment can be readily adapted to the challenges of developing and emerging economies.”

Stacy Swann, CEO of Climate Finance Advisors, said, “In emerging markets, the Green Investment Bank model has the potential to fill a unique financing need that exists between international sources of finance and local project.  Operating locally, with a focused mandate on scaling up climate-smart investments, GIBs can complement and help accelerate financing that can support sustainable, resilient investment where it matters.”

About the Coalition for Green Capital

The Coalition for Green Capital is a non-profit organization that helps states and nation-states to create and run financing institutions aimed at increasing public-private investment in the new clean power platform. Founded by Reed Hundt and Ken Berlin in 2009, CGC now has the support of major environmental foundations and is working in more than a dozen states in the United States as well as at the international level. For more information, contact Executive Director Jeffrey Schub at jeff@coalitionforgreencapital.com

About the Natural Resources Defense Council

The Natural Resources Defense Council (NRDC) is an international nonprofit environmental organization with more than 2 million members and online activists. Since 1970, our lawyers, scientists, and other environmental specialists have worked to protect the world’s natural resources, public health, and the environment. NRDC has offices in New York City; Washington, D.C.; Los Angeles; San Francisco; Chicago; Bozeman, Montana; and Beijing. Visit us at www.nrdc.org and follow us on Twitter @NRDC.  For more information, contact Doug Sims at dsims@nrdc.org

About Climate Finance Advisors

Climate Finance Advisors (www.climatefinanceadvisors.com) is an advisory and consulting firm in the Washington DC area that works with public policy makers at the national and international level, as well as investors, bankers, fund managers, and project developers on issues related to climate finance, green banks and funds, and climate risk. Founded in 2015, Climate Finance Advisors has expertise in blended finance and development finance, and in structuring sustainable, resilient and climate smart investments.  For more information, contact Stacy A. Swann at sswann@climate-fa.com