COP28: MOBILIST HIGHLIGHTS NEED FOR PUBLIC MARKETS TO FORM PART OF CLIMATE FINANCE SOLUTIONS
As discussions at the United Nations Climate Conference (COP28) turn to finance, MOBILIST is proud to be featured among investors and programmes using innovative new vehicles to drive the much-needed mobilisation of commercial capital to address climate change, including adaptation and mitigation efforts.
4 December. Public markets and the institutional capital they attract must form part of the discourse, suggested reforms, and innovative solutions needed to close the climate finance gap in developing countries.
The recent UK White Paper on International Development highlights the need for new financing vehicles that meet the requirements of institutional investors in tackling climate change. The White Paper highlighted how MOBILIST’s investments are already enabling institutional investors worldwide (including pension funds) to finance sustainable development and critical infrastructure needs in developing countries.
As discussions at the United Nations Climate Conference (COP28) turn to finance, MOBILIST is proud to be featured among investors and programmes using innovative new vehicles to drive the much-needed mobilisation of commercial capital to address climate change, including adaptation and mitigation efforts.
Andrew Mitchell, UK Minister of State in the Foreign, Commonwealth & Development Office (FCDO), highlighted the potential role of public markets in mobilising climate finance in his remarks at a roundtable on unlocking commercial investment in adaptation and resilience. “We are also collectively recognising the need to catalyse innovative public markets approaches. With support from the UK’s flagship public market mobilisation programme, ‘MOBILIST,’ we are backing the world’s first global hard currency climate guarantor to unlock $1 billion from global capital and credit markets for mitigation and adaptation in developing countries.”
Read more about UK climate aid announced at COP28 here.
Andrew Mitchell, UK Minister of State in the Foreign, Commonwealth & Development Office (FCDO), during discussions at COP28. Photo: COP28
The Green Guarantee Company (GGC) will be the world’s first global guarantor that focuses exclusively on developing market climate adaptation and mitigation projects. Subject to final documentation, five investors – the UK’s Foreign Commonwealth & Development Office, the Green Climate Fund, the Nigeria Sovereign Investment Authority, USAID & Prosper Africa, and Norfund – together intend to invest $100 million to establish GGC. GGC is managed by the Development Guarantee Group (DDG).
Ross Ferguson, FCDO MOBILIST Programme Lead, says that guarantees issued by GGC will enable businesses at the forefront of the climate transition to access global capital markets. “Like the markets GGC will operate in, the Company is set up to be a commercial operation that will grow rapidly, enabling borrowers to tap into the large pools of institutional capital in global markets at a lower cost, and creating a large and diversified green bond market for global investors, helping more commercial capital flow to emerging market and developing economies (EMDEs) than would have been possible otherwise.”
GGC is the first global guarantor focused on providing hard currency guarantees for more sophisticated borrowers in emerging markets who will have the ability to mitigate currency risk but are restrained by the sovereign rating of their home country from accessing global capital markets on an affordable basis. GGC also offers technical assistance to borrowers to improve their credit ratings to investment grade.
“GCF supports platforms, critical market services, and infrastructure to create a more competitive ecosystem for longer-term private finance mobilisation for climate action. One example is GGC, which will be able to leverage its initial capital base by a factor of 10x, unlocking far more capital from global credit markets than would be possible through traditional development finance,” says Henry Gonzalez, Deputy Executive Director of the Green Climate Fund (GCF). GCF and MOBILIST were the first investors to commit to supporting GGC.
British A. Robinson, Coordinator of Prosper Africa, says the U.S. government’s Prosper Africa and USAID are thrilled to join the UK government and other partners in launching GGC as a de-risking product that will help African nations achieve their climate goals. “Green Guarantee Company is an example of multiple donors collaborating to drive climate finance at greater scale by crowding in large pools of mainstream private capital — that have until now — remained on the sidelines in developing countries.”
Through MOBILIST, FCDO’s support for GGC also delivers on the UK’s commitment made at COP26 to support a new kind of guarantee offer for developing countries, enabling businesses driving the climate transition to access new capital through international capital markets. With support from MOBILIST and partner investors, that commitment is now being realised.
Mafalda Duarte, Executive Director of the Green Climate Fund (GCF), referenced MOBILIST and the potential impact that the Green Guarantee Company (GGC) can generate during a session at COP28 in Dubai. GCF and MOBILIST were the first investors to commit to supporting GGC. Photo: COP28
Read the original release here