Focus on OPIC and Ex-Im Bank's Use of Financial Instruments...
WRI’s “Climate Finance” series tackles a broad range of issues relevant to public contributors, intermediaries, and recipients of climate finance—that is, financial flows to developing countries to mitigate greenhouse gas emissions and adapt to climate change impacts. A subset of this series,...
Norway is one of the largest contributors to climate finance in the world, relative to the size of its economy. In 2010 and 2011, the majority of Norway’s fast-start finance (FSF) was channeled through multilateral institutions and supported mitigation activities in developing countries, with a...
by Taryn Fransen, Thorvald Moe, Steffen Kallbekken, Alice Caravani and Smita Nakhooda - August 2013
On July 16, 2013 the World Bank agreed to support universal access to reliable modern energy and limit the financing of coal-fired power plants to rare circumstances in an effort to address climate change concerns.
With a lending portfolio of $18 billion in 2010, the International Finance Corporation (IFC) promotes private investment in developing countries. Its lending has been guided since 2006 by a set of Performance Standards on Environmental and Social Sustainability which the IFC applies to all investment projects to minimize their impact on the environment and on affected communities. Large-scale infrastructure projects, extractive industries operations, and other projects often pose serious environmental and social risks, including to human rights.
Over the past decade, WRI has been leveraging its expertise on ecosystems and biodiversity, climate change, and governance to help shape the environmental and social policies of international financial institutions like the IFC, and to promote sustainable private investment in client countries.
WRI actively advised IFC on its 2011 revision of the IFC performance standards which strengthened the environmental and social safeguards it applies to projects worldwide. IFC staff making a case for robust requirements to assess risks on ecosystem services, climate change, and indigenous peoples’ rights, also had access to the following WRI body of work:
Our effort to mainstream ecosystem services in decision-making and the documented use of our ecosystem services review tools within the private sector.
Our work demonstrating that the concept of “Free Prior Informed Consent” makes a good business case for large-scale, high-impact projects to ensure local civil society buy in.
IFC standards are globally influential among international project financiers seeking to manage the environmental and social risks of projects in the developing world. More than 60 leading international institutions have committed to adhere to IFC’s Performance Standards in their project-finance lending under the rubric of the Equator Principles. Banks in emerging economies including China and Brazil often refer to the IFC Performance Standards as they develop national environmental and social guidelines.
While reactions to President Obama’s newly announced climate plan have focused on domestic action, the plan actually has potentially significant repercussions for the rest of the world. These repercussions will come in part through his commitment to limit U.S. investments in new coal-fired power plants overseas. If fully implemented, the plan will help ensure that the U.S. government channels its international investments away from fossil fuels and toward clean energy. The move sends a powerful signal—and hopefully, will inspire similar action by other global lenders.
Chinese overseas investments are rapidly increasing. As of 2011, China’s outward foreign direct investments (OFDI) spread across 132 countries and regions and topped USD 60 billion annually, ranking ninth globally according to U.N. Conference on Trade and Development statistics. A significant amount of this increasing OFDI goes to the energy and resources sectors—much of it in Asia, Africa, and Latin America.
But there are two sides to China’s OFDI coin. On the one side, these investments can benefit China and recipient countries, generating revenue and improving quality of life. However, like any country’s overseas investments, without the right policies and safeguards in place, these investments can fund projects that harm the environment and local communities.
WRI‘s new issue brief surveys the progress and challenges China faces in regulating the environmental and social impacts of its overseas investments. I sat down with WRI senior associate and China expert, Hu Tao, to talk about China’s overseas investment landscape. Before joining WRI, Tao worked as a senior environmental economist with China’s Ministry of Environmental Protection (MEP). Here’s what he had to say:
The Role of International Climate Finance in Creating Readiness for Scaled-Up, Low-Carbon Energy
Limiting global temperature rise to 2°C above pre-industrial levels will require billions of dollars in investments each year to mitigate greenhouse gas emissions and shift to low-emissions development pathways. This report draws on the experiences of six developing countries to examine how...
This guide will help companies be better prepared as they seek to secure attractive external financing for energy efficiency improvements at their facilities in China. The guide can be used by industry, energy services companies, and financiers to achieve a smoother financing process and prompt...