By UN Climate Change News
Members of the Green Bank Network have collectively closed transactions that are expected to mobilize US$41 billion in public and private capital for green infrastructure projects around the globe, effectively meeting their goal of US$40 billion by 2019.
The news comes shortly before the start of the UN’s Conference on Climate Change COP24 in Katowice (2 – 14 December), where governments are set to finalize the implementation guidelines of the Paris Agreement to hold the global average temperature increase to as close as possible to 1.5C.
Reed Hundt, CEO of the Coalition for Green Capital, notes: “Meeting climate goals will require an unprecedented and immediate mobilization of capital. Accelerating the formation of Green Banks in emerging economies can provide critical capacity to take on risk and leverage private capital to support large-scale low-carbon investment and enable countries, cities and states to meet their climate goals.”
Douglass Sims, Director of Strategy and Finance at NRDC’s Center for Market Innovation, said: “Green banks are financial institutions that have sustainability and low carbon development written into their DNA, which makes them an ideal vehicle to help countries achieve their Paris Agreement commitments and sustainable development goals. From a relatively small capital base, the members of the Green Bank Network are demonstrating that innovative investing in renewable energy, energy efficiency and green infrastructure is good for the climate, economic development and the bottom line.”
The announcement was made at the 6th annual Green Bank Congress, convened adjacent to the Bloomberg NEF Future of Energy Summit in Shanghai and hosted in partnership with the Center for Finance and Development, Tsinghua National Institute of Financial Research, Green Finance Committee (GFC) of the China Society for Finance and Banking, with support from Lujiazui Green Finance Development Committee and Shenzhen Green Finance Committee.
The analysis, prepared by the Secretariat of the Green Bank Network using publicly available information, shows members are mobilizing as much as 10 dollars in total investment for every one dollar of public capital invested in clean energy projects. Investments to date have avoided 25 million metric tons of CO2EQ emissions.
Additional announcements at the Congress include:
- The Green Bank Network announces the addition of a new member in 2019 – the Rhode Island Infrastructure Bank, whose mission is to actively support and finance investments in the State’s infrastructure through a variety of means, including the issuance of bonds, originating loans and making grants, and the engagement with and mobilization of sources of public and private capital.
- A new Climate Finance Facility has been formed in Southern Africa—a first-of-its kind, path-breaking application of the Green Bank model, adapted for emerging market conditions. Additional efforts to form new green banks, are underway in diverse jurisdictions in Latin America, Africa, Asia, and Europe.
- To support acceleration of efforts to develop green banks in emerging economies, the Green Bank Design Summit will be sponsored by the Agence Française de Développement and held in Paris in March 2019. The conference will enable public- and private-sector professionals working to design and set up green banks in emerging economies to access the lessons learned by countries that have already established green banks.
- An updated website that contains a searchable database of all Green Bank Network member transactions, providing ready access to innovative deals.
Green banks are dedicated finance institutions created to work closely with the private sector to increase overall investment in clean energy and bring clean energy financing into the mainstream. The members of the Green Bank Network are investing across the technology spectrum, including wind, utility and small-scale solar, energy efficiency, low-carbon transport, combined heat and power, anaerobic digesters, LED street lighting, geothermal and energy storage. They are financing with a variety of products and at all scales – from multibillion dollar offshore wind farms to more energy efficient property and vehicles, to solar for small and medium-sized enterprises and affordable housing properties.
This global group of financial institutions includes founding members Clean Energy Finance Corporation (Australia), Connecticut Green Bank (US), Green Finance Organisation (Japan), Malaysia Green Technology Corporation, NY Green Bank (US), and Green Investment Group (UK) and new member Rhode Island Infrastructure Bank (US). These organizations have appointed the Coalition for Green Capital and the Natural Resources Defense Council to manage the development of the network, with support from ClimateWorks foundation.
It has been a pivotal year for the pioneering green banks that are the members of the Green Bank Network. Members collectively have committed about USD 10 billion for projects with a total value of more than USD 40 billion.
- The Clean Energy Finance Corporation invested across the innovation and project finance life cycle as well as across a wide array of clean energy asset classes critical to tackling Australia’s toughest emissions challenges.
- The Green Investment Group (formerly UK Green Investment Bank) continued to innovate in new structures and new geographic areas during its first year under private ownership.
- The NY Green Bank’s portfolio grew in size and diversity as it demonstrated the sustainability of its business model.
- Through its unique equity strategy, the Green Finance Organization crossed a key threshold by mobilizing 10 times its USD 100 million investment in projects across Japan.
- The Connecticut Green Bank continued to win awards for innovation in government, spin out an affiliate, transform existing markets and enter new ones, such as electric vehicles, even as it ironically became a victim of its own success and had half of its annual operating revenues swept by the state legislature.
- Our sixth member, GreenTech Malaysia, was being repositioned after a change in government. Nevertheless, since the inception of its Green Technology Finance Scheme in 2010 and through the end of 2017, it had approved more than USD 900 million under the Scheme and the total cost of the 319 projects receiving funding was USD 1.775 billion. Investments have led to more than 3,785 million tonnes of CO2e emissions avoided annually.
Gavin Templeton, Head of Sustainable Finance, Green Investment Group said, “We’re delighted to be co-hosts of the 6th Green Bank Congress in Shanghai. Alongside the UK, home to the world’s first dedicated green finance institution, China has been at the forefront of the development of sustainable finance. Building national capacity is a core element of achieving the Paris goals and we believe the green bank model can be instrumental in achieving this.”
Ilmi Granoff, Director of Sustainable Finance at the ClimateWorks Foundation said: “It is fantastic to see a growing network of institutions, in both industrialized and emerging markets, demonstrating that entrepreneurial public capital with a low-carbon mission is fiscally efficient and an effective catalyst for growth in the low-carbon economy.”
About the Green Bank Network
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. Learn more at www.greenbanknetwork.org/about-gbn.
Read the press release by Green Bank Network here.