Meeting the Paris Agreement’s climate commitments requires climate-resilient, low-carbon investments at an unprecedented speed and scale. The demand from countries to finance these investments – including through their Nationally Determined Contributions (NDCs) - is large and growing and, if well planned, can support sustainable growth and improved livelihoods and jobs while delivering climate benefits. There is abundant financial capital available but much of it is currently earning low or even negative returns. For many reasons, including inappropriate policy environments and the lack of appropriate risk mitigation mechanisms, this capital is not flowing to investments with climate benefits at sufficient scale. Globally, there is a failure to match demand for climate action with supply of finance. 

 

Complementary to existing climate financing mechanisms, the Invest4Climate platform provides an opportunity to further mobilize, coordinate and deliver the finance needed to help countries make the transition to a low-carbon resilient future, while creating jobs and building prosperity. Acting as a broker, and without its own balance sheet, the platform aims to:

 

  bring visibility to potential investments and identify opportunities for action and investment

  mobilize multiple sources of finance and combine them most effectively to maximize deployment and impact

  identify barriers to scaled up investment and develop solutions and political support to address them

  facilitate the identification and allocation of risk to those who can best bear and manage them and hence facilitate appropriate financial structuring to crowd in additional funding

 

To make this happen, the World Bank Group will partner with the UN development system in jointly convening the platform, bringing together key decision-makers in countries and various kinds of financial institutions (including private sector investors and foundations) to identify and implement potential transformational investments. These include for example the accelerated roll out of renewable energy, large-scale development of battery storage, electric vehicles, and low-carbon air conditioning systems.

 

Invest4Climate will bring together established development and climate finance institutions (DFIs), such as the World Bank Group, other MDBs, the GCF and DFIs, and other actors in the development and climate finance space including philanthropic foundations, to work together with private sector companies and country and sub-national representatives on this agenda.  

 

 

The World Bank Group and UN partners will jointly convene the platform. In support of potential deals, concessional and development finance providers, could provide institutional backing and risk-reducing instruments to investors, countries and other partners. They will work, on demand, with country partners to help build the enabling conditions for finance to flow.  

 

Capital providers and development partners can draw on each other’s comparative advantages and engage flexibly and creatively to provide grants, concessional finance, development finance, guarantees and commercial finance to accelerate climate action, including:

 

  Providing long-term development finance with different degrees of concessionality through a range of instruments (loans, grants, guarantees, policy lending etc);

  Providing grant financing and capacity building support and providing know-how, technical assistance and advocacy to operate at the national and global levesl;

  Targeting interventions to help stimulate innovation and crowd in private sector finance;

  Promoting commercially viable projects and increasing confidence in the contractual environment;

  Financing and scaling up innovation.  

 

The benefits of Invest4Climate include: 

 

  Developing new solutions and knowledge to “crowd-in” private capital, know-how, and mobilizing resources to accelerate and scale early-stage climate entrepreneurship in frontier markets, creating jobs and stimulating green growth;

  Accelerating cost reductions to make renewables and other new technologies competitive with fossil fuels and older technologies by working with committed governments to support sound policies, and by using concessional, philanthropic and development finance judiciously to crowd in private finance;

  Accessing the input from the best innovation and innovators at the start of creating investment plans;

  Using experiences to share best practice and accelerate learning by making available transaction and associated documentation, as appropriate, as templates on an open source basis. 

 

Invest4Climate will be supported by national finance ministers, climate thought leaders, chief executives of firms, foundations and financial institutions, as well as senior representatives from the UN and the World Bank Group.

 

It will not have its own funding sources but will complement existing climate and development finance initiatives and institutions.

 

 

NEW YORK, September 20, 2017 – United Nations Secretary General António Guterres and World Bank Group President Jim Yong Kim today announced plans to accelerate the flow of finance for climate action through a new platform dedicated to identifying and facilitating transformational investments in developing countries.

 

Following meetings this week with world and business leaders, state and city representatives, and civil society, the two leaders pointed to the urgency for climate action and the need for a massive ramp-up of investment.

 

“Countries are successfully reducing emissions and building resilience to climate change, but getting to the level of action needed to reach the global goals set in Paris two years ago will require a huge leap in the flow of financing and investment for implementing the National Determined Contributions,” said Secretary General Guterres. “The disasters we are currently seeing – including storms, floods and drought – are also demonstrating just how urgent the need is especially for the Small Islands Nations.”

 

President Kim speaking during the Bloomberg Global Business Forum said: “There are vast opportunities in developing countries in areas like clean energy and climate-smart agriculture that will lay the groundwork for a more prosperous and sustainable future. Our challenge is to create the conditions for investment to flow, and to get all forms of finance working together for maximum impact.”

 

The new Invest4Climate platform is designed to bring together national governments, financial institutions, private sector investors, philanthropies, and multilateral banks to support transformational climate action in line with the Paris Agreement. The platform will bring together investors with high-impact opportunities in developing countries such as large-scale development of battery storage, electric cars, and low emission air conditioning.  It will also facilitate such investments through the development of risk mitigation instruments and, based on demand, will work with national governments to improve policy environments.

 

“Cities are leading the way in confronting climate change, and they would be doing even more, even faster, if they had greater access to funding,” said Michael R. Bloomberg, UN Special Envoy for Cities and Climate Change. “This is a big challenge that we can start to address with practical steps, like helping cities improve their credit rating, measure their funding needs, and connect specific projects with lenders. The World Bank and UN are taking an important step forward by bringing people together who are in a position to help achieve those goals."

 

Invest4Climate will be supported by national finance ministers, climate thought leaders, chief executives of firms, foundations and financial institutions, as well as senior representatives from the UN and the World Bank Group. It will not have its own funding sources but will complement existing climate and development finance initiatives and institutions.

 

The platform will be further developed in close collaboration with partners at the forthcoming World Bank/IMF Annual Meetings and COP23. The first Invest4Climate initiatives are expected to be announced at the Climate Summit in Paris in December 2017.