Press Release No. 23/246

Statement from International Monetary Fund Managing Director, COP28 President-Designate, President of the World Bank Group, and UN Special Envoy for Climate Action and Finance

June 29, 2023

Paris, France: On June 22, 2023, Dr. Sultan Al Jaber, COP28 President-Designate, Kristalina Georgieva, Managing Director of the International Monetary Fund, Ajay Banga, President of the World Bank Group, and Mark Carney, UN Special Envoy for Climate Action and Finance and Co-Chair of the Glasgow Financial Alliance for Net Zero (GFANZ), co-chaired a roundtable discussion as part of the Summit for a New Global Financing Pact at the Palais Brongniart.

The high-level roundtable has become a key forum for an informal exchange of high-impact ideas to drive substantive progress on the climate finance agenda. Today’s roundtable brought together net zero-committed financial institutions in GFANZ, government officials, and the leadership of the IMF and multilateral development banks (MDBs) to identify priority actions to mobilize private climate investment in emerging markets and developing countries (EMDCs), focusing on delivering near-term results, in the runup to COP28.

Current climate investment into EMDCs remains insufficient to meet the goals of the Paris Agreement, further underscoring the need to use MDB and other development finance catalytically to unlock local and international private finance, enhance technical capacity to build a pipeline of bankable climate projects, and implement public policies to establish an enabling environment for investment in the green transition.

Ensuring a just and global net-zero transition requires scaling creative and effective solutions, including solutions to mobilizing catalytic private investment in EMDCs. Today’s conversation was informed by work underway through the Just Energy Transition Partnerships (JETPs), the IMF’s Resilience and Sustainability Trust (RST), and various World Bank Group initiatives. With the objective of joining efforts from today’s Summit in Paris through to COP28, the Co-Chairs agreed to organize additional roundtable discussions this year, that will further such solutions. The Co-Chairs agreed in particular the following set of actions:

• Recognizing the progress made by the Working Group focused on Increasing Investment in Sustainable Infrastructure in Emerging and Developing Markets in preparation for the Summit, the co-chairs intend to consider the Working Group’s proposed recommendations.

• Given the importance of a country’s policy environment for enabling investments into climate transition, the IMF will continue to share the lessons learned from early RST programs, and use the roundtable to share experiences going forward.

• The COP28 Presidency will ask MDBs and specialized climate funds to take action on simplifying and streamlining access to climate finance and implement practical new ways of working together as a system with objective of speeding and scaling up private financing of climate transition in EMDCs.

• Participants will continue to push forward on institution-specific priorities for capital mobilization towards climate goals discussed during the roundtable, and to share updates on progress in subsequent roundtables.

The participants recognized that private capital will need to play a key role in addressing the financing gap for transitioning to net zero. It will require multi-stakeholder action to position transition finance as a great investment opportunity that would help EMDCs to get on the path of sustainable low-carbon growth and create the necessary market and policy conditions for turning this opportunity into reality.

COP28 President-Designate, Dr. Sultan bin Ahmed Al Jaber, said: “Climate finance is nowhere near available enough, accessible enough and affordable enough – especially for countries in the Global South. To make finance more available, we need to figure out how to attract much more private capital into the investment pool. Private capital is the force multiplier that can really change the game when it comes to effective climate finance. To make financing more accessible, we need to simplify, speed up, and standardize access to climate funds across international financial institutions and specialized funds. And to make finance more affordable, we must drive transparency and price discovery. We must give all market participants the tools and mechanisms that narrow the gap between perceived risk and actual risk when it comes to investing in emerging and developing economies. We need to shift the narrative that views climate finance as a burden and recognizes it as an economic opportunity.”

IMF Managing Director, Kristalina Georgieva, said: “Given the huge financing required to deliver the transition to green and resilient economies, it’s vital that we work in partnership to accelerate investment flows— particularly to emerging and developing economies. Everyone has a role to play—multilateral institutions, national authorities, and the private sector—each using their expertise and comparative strengths. Working together we can harness the power of private capital in the fight against climate change.”

UN Special Envoy on Climate Action and Finance and GFANZ Co-Chair, Mark Carney, said: “The transition to net zero must be global, and the scale of investment required in emerging and developing economies can’t be met with public money alone. GFANZ continues to work closely with MDBs, the IMF, and governments as they develop and scale new approaches to address longstanding barriers to private investment, including through the World Bank’s Private Sector Investment Lab, launched today. We appreciate the COP28 presidency for taking a practical approach for moving this agenda forward, and we look forward the progress that must be delivered this year to ensure that investment can flow to where it’s needed most.”

In addition to the action items determined during the roundtable, the World Bank Group also launched the Private Sector Investment Lab, which will be co-chaired by Mark Carney and Shriti Vadera of Prudential. The Co-Chairs agreed to include discussion of early proposals surfaced by the Lab in the next roundtable.

President of the World Bank Group, Ajay Banga, said: “Governments, multilateral institutions, and philanthropies aren’t enough to make adequate progress toward climate and poverty goals in emerging markets and developing countries. The scale of our challenge requires the private sector to play a significant role alongside the World Bank Group and other development institutions. For years, we have tried – and fallen short – to mobilize meaningful private investment in these markets. Given the urgency and scale of our intertwined challenges, we must try a new approach. The Private Sector Investment Lab – co-chaired by Mark Carney and Shriti Vadera – is a concrete step in a broader effort to develop, and rapidly scale, solutions that address the barriers preventing private sector investment in emerging markets.”