Full Title: Financing Change: How to Mobilize Private-Sector Financing for Sustainable Infrastructure
Author(s): Aaron Bielenberg, Mike Kerlin, Jeremy Oppenheim, and Melissa Roberts
Publisher(s): McKinsey & Company
Publication Date: January 1, 2016
Full Text: Download Resource
Description (excerpt):
In 2015, an international architecture for sustainable development began to take shape. Building on the United Nations’ Financing for Development Agenda in Addis Ababa and then the formal adoption of the Sustainable Development Goals in September, the year culminated in the Conference of Parties (COP) 21 in Paris. Almost 190 countries, accounting for more than 98 percent of greenhouse-gas emissions, agreed to a global climate-change strategy. Each country submitted a voluntary plan, or intended nationally determined contribution (INDC), that set out how it will move its economy onto a lower-carbon growth pathway. Signatories have agreed to update their progress in 2018, and the terms of the Paris Agreement envisage higher targets for the INDCs over time, beginning in 2020. With this structure in place, attention is shifting toward how to implement and finance more sustainable growth.
While the INDCs will take years to play out, one likely effect is to shift investment, both public and private, toward more sustainable projects, including infrastructure. There are already substantive changes in the financing landscape. Each of the six major multilateral development banks, for example, has committed to significantly increasing its allocations to climate finance, by as much as two to three times. The 20 governments that represent 80 percent of current global clean-energy research and development have pledged to double such investment in the next five years.