Countries around the world have committed to undertake ambitious climate action, and green banks, with their mandate to focus on low-carbon, climate-resilient investments and crowd in private capital, are ideally positioned to help.
Green Investment Banks
Increasing the availability of and ease of access to finance for low-carbon development in emerging countries.
What is a Green Investment Bank?
A Green Investment Bank is a public or quasi-public institution specifically designed to lower risk and attract private investment to support domestic low-carbon infrastructure. These nationally capitalized and owned, independently operated institutions can coordinate capital inflows while building the long-term domestic plumbing for deploying capital into projects aligned with a 2 degree pathway.
Why Green Investment Banks?
National Green Investment Banks offer a replicable model for moving the locus of problem-solving and agency to the national level, while empowering developing countries to benefit from international financial resources in the development of low-carbon solutions.
Why it Matters
Currently, climate finance architecture is complicated, inefficient, and not designed to mobilize and deliver the trillions in blended public-private financing needed to rapidly scale low-carbon infrastructure in emerging markets. We aim to increase efficiency through making domestic institutions the locus of climate finance.
COVID-19, with its devastating economic consequences, compounds the urgency of building more reliable, cost-effective, and cleaner infrastructure. Fortunately, there is a way to facilitate economic recovery while addressing the climate emergency. The answer lies in green investment banks.
At COP25 nine countries, from Portugal to Rwanda, showcased their progress and discussed their excitement at the potential the green bank model has to lead the market in technologies that will mitigate emissions and support resilience and adaptation.
During Climate Week, RMI cohosted a roundtable meeting where five countries and one city laid out their rationale for developing a green bank.
The Global Green Bank Design Platform will give countries access to the best of global technical assistance, structuring advice, and capitalization sources to establish green banks.
The Green Bank Design Summit was a first-of-its-kind event for those working to design and set up green finance institutions to catalyze low-carbon and climate resilient investments in emerging markets.
RMI is working to empower and enable developing countries to take greater ownership and control of low-carbon infrastructure finance. We feel it is the only way to drive high-volume, high-impact capital flows commensurate with a two-degree world.
The conclusion of the Paris Agreement has shifted focus from global negotiation to national implementation. Green Banks offer a compelling, replicable institutional model for country ownership of climate finance for some of the largest emitters in the developing world.