The Power of Private Capital in Sustainable Development

00:00 Welcome

02:17 Conversation between David Malpass and José Viñals: Capital flows into developing countries

- David R. Malpass, President of the World Bank Group
- José Viñals, Group Chairman, Standard Chartered PLC

28:43 Video explainer: World Bank's Emission Reduction-Linked Bond

30:47 Panel discussion: Intersection of capital markets and sustainable development

- Anshula Kant, Chief Financial Officer and Managing Director, World Bank Group
- Rania Al-Mashat, Minister of International Cooperation, Arab Republic of Egypt
- Julie Monaco, Managing Director, Citi - Rosalia V. De Leon, Treasurer of the Philippines
- Moderator: Jorge Familiar, Vice President and Treasurer, World Bank and Pension Finance Administrator, World Bank Group

1:27:58 Closure

[Jorge Familiar]
Hello and welcome to the 2023 Spring Meetings of the World Bank Group and the IMF. I'm Jorge Familiar, and for the next 90 minutes we'll be discussing the power of private capital in sustainable development. You can share your thoughts on these topics at any time using the hashtag #ReshapingDevelopment. Please use the QR code you see on the screens to post your questions, or if you're following us online, join the chat at live.worldbank.org.

The world is facing interconnected challenges. High inflation, the rise in food insecurity, growing inequality, global fragility, the COVID-19 pandemic and rising debt levels. And we are facing these challenges against the backdrop of a climate crisis, which is estimated to cost 1 trillion external funding a year. To adequately address these current and emerging development challenges, the world calls on MDBs to substantially scale up their support and the World Bank is playing a central role in this effort. Consequently, the Bank management has embarked on an evolution roadmap, engaging with all of our stakeholders. Since the resources of MDBs are limited compared to the immense needs of funding for development, we need to catalyze and channel funds from private capital to facilitate global public goods and tackle immediate crises and long-term challenges. We designed today's event as a two-stage act. First, we will have a 30-minute fireside chat conversation, followed by a panel for a deeper discussion among stakeholders on the role of sustainable finance in development using concrete examples. Allow me please, to introduce World Bank president Mr. David Malpass and Mr. José Viñals. David, José, the stage is yours.

[David R. Malpass]
Thank you very much, Jorge, the very adept Treasurer of the World Bank. He's going to be listening because I'm going to try to elicit from José thoughts on the markets in general and also about capital flows into developing countries. I wonder if we can begin on the most basic level of how does Standard Chartered work with developing countries to put capital in? Name some of the ways. What are some of the barriers or the obstacles to putting more money into developing countries? Thanks for being here, by the way.

[José Viñals]
Thank you very much, David and Jorge, for the kind invitation to be with you in this event. The reality is that emerging markets and developing economies need a lot of money and that money is sitting somewhere else. So, the question is how you bring the money from where it sits to where it needs to be deployed. And I think that's a role that international banks and other financial institutions with a global remit can play. Standard Chartered, for you who may not be as familiar with our footprint, has 170 years history of banking in emerging markets and developing economies throughout the world. We think that bringing that financing is very important, not because it's the right thing to do, but also because it's a smart thing to do from the business point of view because they are commercial opportunities. But coming back to the second part of your question, what may be some of the barriers that exist and how can they be overcome? I would say that the first barrier, which is holding back private investors from investing in things like sustainable development and sustainable infrastructure projects, climate finance in developing economies, has to do with risk. Both the reality of risk and the perception of risk, and the perception may be worse than the reality. I mention this because as a bank, which is well established over a number of very difficult and challenging markets, we have a good understanding of the reality of the ground. And sometimes in discussion with my global peers, I find that the perception they have of the risk goes beyond what may be the reality. But I need to acknowledge that the reality is challenging. Why is that? Because in emerging markets and developing economies in particular, you have a high political risk because you have the risk of policy reversals, of legal instability and doubts in a number of cases on the quality of governance particularly, but not on economic governance, in issues of corruption. Those are things that really are taken into account by international investors when deciding whether to bring capital into emerging markets and developing economies. Just to give you a piece of information, if one looks at the assets under management of the top 300 asset managers in the world, less than 10% of those assets are allocated to emerging markets and developing economies if you exclude China. That is a very small fraction, and the question is how you scale that up, how you deal with risk. Another dimension of risk has to do with macro-financial instability. It's not unrelated to the first thing I said, but it's also a difficult thing, how you cope with foreign exchange volatility, how you cope with instability in the flow of returns that is linked to specific projects. Those things are challenging. And now, in the present context, we're also seeing that as a result of the credit tightening that we're seeing in the world, given some of the banking turmoil we've been having recently, this is also added some risk premium, which is added also to the tightening of monetary policy in the major economies. So. those are the barriers, how to have the right risk-return relationship. And that brings me to the issue of investable projects. As I said, there are trillions of dollars sitting there, how do they come in? I think that that's where the private sector and the multilaterals and development finance institutions and all the donors can come in through the scaling up of blended finance in order to put together a coalition of the willing so that we can scale that up more significantly. I'll give you an example, and there are many others. We work a lot with the World Bank Group and with other multilaterals in blended finance projects. For instance, in Angola a couple of years ago, we just finished a project in collaboration with the World Bank, which is around 1 billion dollars on water safety. That is the largest partial credit guarantee supported transaction that has ever been undertaken, and we're very privileged to have in a party. Water safety, we have done research on what are the socio-economic returns of clean water, and the returns are 12 to 1, 12 dollars in terms of GDP relative to 1 dollar of investment. That's a very powerful return. But the risk needs to be managed so that at the end the incentives are there for private capital to move in at pace and scale.

[David R. Malpass]
Let's stay on that. When you use the term blended finance, give us ways that finance costs can be brought down by multilateral development banks so there can be concessional money put in beside the private sector money, there can be guarantees and MIGA, our multilateral guarantee agency, can guarantee against political risk. So, in the case of the Angola billion-dollar water project, what were the tools used to blend the finance so that it was cost effective?

[José Viñals]
I mean, you mentioned a little bit of everything that is going on, and I think the partial credit guarantee was particularly important in that project.

[David R. Malpass]
While we’re on the subject, that becomes a very important issue going forward, of achieving the hundreds of billions of dollars of finance from the private sector to be mobilized into riskier situations. You raising the concept that risk is important within this. And so, how does that partial credit guarantee, or how can the multilateral institution be aware of the risks relative to your inspection of the project? What's the sharing of risk within that relationship?

[José Viñals]
I think it's very important to have a very close dialogue between, on the one hand, the national governments, the private investors which are providing their money, and then the multilateral development banks, regional or World Bank Group, which are involved in this. And I think that is important that they speak the same language. So, having the right communication, the right understanding, speaking the same development finance language, which means understanding of development, understanding of risk, how to identify the risk, how to mitigate that risk, how to de-risk the project. I think that communication is very powerful. We're big users, for example, also, of MIGA guarantees. We may be one of the top users of MIGA guarantees given the markets in which we bank. So, we have seen the benefits of blended finance. We have seen the benefits of partnering with the World Bank Group and with other multilateral development banks in bringing international capital into projects. The thing is that there is an opportunity to think of creative forms to do this at scale and to do this in a more powerful manner. So go from retail to wholesale, let's say.

[David R. Malpass]
I may bring us back to state-owned enterprises within that mix, but you mentioned MIGA, so I'll explain it a little. This is an insurance part of the World Bank Group that can guarantee against transfer risk, against war risk or civil unrest risk and expropriation risk. And that helps with the risk equation that you're making in countries, with the idea that the World Bank Group might have insights that it would be hard for you to obtain. So, there's a sharing or an absorption of risk by the World Bank Group in areas where it has expertise. As we look to climate finance, the goal is to find those areas of expertise that we can build on and offer those as part of the equation or the risk transfer with the private sector. Before we go into those, and I'll come back to SOEs, but I wanted to just reflect on your first point, the macro stability point, and one of the concerns I have and the pressing urgent need for developing countries and the weaker developing countries, or the global South, and that's been a topic of conversation all week long, the asymmetry of the global situation now, in terms of the capital flows not going into countries where there's maybe rapid population growth or there's good opportunities for investment returns, but the capital is not flowing. We sat on the Global Debt Roundtable two days ago and you raised the issue also of local currency instruments. I'll make the general point that one of the things happening in the world, it appears to be a crowding out of credit risk and also of duration risk, especially in developing countries in general. What that means is the international bond market closes down, then some of the regional bond markets close down, the syndicated loan markets are not available, the countries turn to their local banks and that crowds out their private sectors. It's especially apparent on trade finance, working capital finance. I wonder your thoughts on that. I gave a speech two weeks ago in Niger specifically on these topics, that the countries have to work extra hard now on their macro stability because otherwise this crowding out will really accelerate. Just as we see banking stress in other parts of the world, it can occur in developing countries as well. So, your thoughts on macro stability and this worry of crowding out, where does it go over the next year?

[José Viñals]
Yeah, I think these worries are very real, linked to the challenges that we have in the global macro financial situation, where a number of markets have been basically left out of international capital flows. If everything you have is at the local level, then the crowding out naturally happens. It's a very tricky situation. I think that linking this with the first part of your question, which has to do with the Sovereign Debt Roundtable, the world needs to solve clearly two problems, a stock problem and a flow problem. The stock problem is the fact that you have countries which are either in debt distress or at a very high risk of debt distress, and there are quite a number of low-income countries estimated to be around 60%, which are in either one or the other situation. There are other middle-income countries which are also at risk, so we have a real issue there, and one needs to solve the stock problem by basically dealing with debt restructuring in an efficient and effective manner. I think that the Global Sovereign Debt Roundtable that you and Kristalina and the chair of the G20 Finance Minister from India help put together. I think it's a great conversation because it's a very inclusive global conversation, bringing all the players to the table, borrowing countries, multilaterals, key official creditors and also the private sector creditors. I think that's very important, and hopefully we can continue to build on the recent agreements that we had a couple of days ago. But that's solving the stock problem and that's critical to regain market access. At the end, it is market access which is going to break the national budget constraint of these economies and break down with the crowding out that we are having. So, pursuing the right policies in the context of the programs which are coming associated with these restructurings is critical. But to solve, fully, the flow problem, and coming back to what we're saying before, we were saying before that you need the private sector working with multilateral agencies, with DFIs or the donors to make sure we have the mix of finance, the mix of blended finance at scale, which is necessary because only on the basis of private incentives alone, this capital is not going to flow to the developing world. And that's a pity, so you need some collaboration for that to happen at scale.

[David R. Malpass]
Let's go straight into climate finance in that regard. If it's a project that's going to take a long time to either have a return or may not have a positive return, then the challenge for the world is how can there be added finance for the global public good aspect? We have worked hard on a project in South Africa called Komati to decommission a coal-fired power plant. It was done with a variety of sources of financing. There was World Bank direct loans to South Africa, there was foundation money and there also was trust fund money which then lifted the project, and IFC was very important in the renewables side to replace the power loss from the decommissioned coal-fired plant. So, if we look at that as a pilot, the goal then for the world is to do that times literally 10 thousand, that's really what's needed. The challenge is how can the project be monitored over a long enough period of time to make sure that it's not simply reopened? World Bank has a strong relationship in South Africa that can give some comfort to the world that over the next ten years that coal fired-power plant will indeed stay closed down, renewables will be used and allowed to be connected to the grid. The World Bank role in this is… One part of the World Bank's role is not just the financing, though that's important, but it's also the project management and the relationship, the long-term relationships that are needed for the transition. On that basis, we've proposed a trust fund called SCALE, which is for middle income countries where there would be concessional money in the fund that could then accelerate projects in a way that would be attractive to you to invest in them. That means blending the finance, meaning if we speak literally, buying down the interest rate or the risk so that your investors want to get involved. What techniques do you see? And we welcome any advice from outside, from you, on what the World Bank could do in terms of its tools in order to facilitate this process.

[José Viñals]
I think as you said, it's using the current tools to do much more of the same. That's the first thing. The other thing is, I think that there is always the possibility of exploring new tools and speaking now in a different capacity, as the co-chair…

[David R. Malpass]
The co-chair of the United Nations...

[José Viñals]
Alliance of Global Investors for Sustainable Development, whose purpose is to provide ideas and tools and financial tools to scale up financing for the SDGs. I think that one has to think about national solutions, like the one you mentioned, I think they're very important. The JETPs would be another very important example. Standard Chartered, for example. We are very involved in the Indonesian and the Vietnamese.

[David R. Malpass]
These are the Just Energy Transition Partnerships.

[José Viñals]
[Crosstalk] Again, very important that in those partnerships you have donors’ money, you have the government state-owned enterprises, you have donors, you have multilaterals and you have the private sector where one of the seven banks involved in those for the decommissioning of coal. And that is something which is extremely important. But there are other examples where these things could be provided. Let me just give another one. Climate adaptation. This thing we were talking about is climate mitigation, reducing emissions, but climate adaptation. We have looked at ten of the largest emerging markets in developing economies in our footprint and have measured in a research project what would be the economic return in terms of avoiding GDP losses if you invest in climate adaptation now. And, if you invest between now and the end of the decade, for every dollar you invest, you avoid 12 dollars of GDP losses by the end of the decade. Now, this money, this GDP which is lost, is nowhere tangible. There is what the economies call an externality that is not well priced. That's where you need a role for some public intervention so that by providing the right mix of incentives, then you can bring the money which is needed. 12 to 1, it's not a bad return on investment, I wish I had it for the bank. I think that every investor had it. That would be one example on adaptation, so critical mitigation critical adaptation, just a few examples. What you mentioned in South Africa, the JETPs in Indonesia and Vietnam, we are there, we need also the global platform. That's what we're working at the United Nations GISD. The World Bank is also contributing inputs into that platform, and that could allow in the future the scaling up of investment through a multiplicity of multilaterals coinvesting with a multiplicity of private sector investors over a multiplicity of investment projects, sustainable infrastructure projects, across a multiplicity of geographies.

[David R. Malpass]
A couple of questions on those points. So, on adaptation, the World Bank does a large amount of direct financing for good adaptation projects, and we have diagnostics to try to help the countries decide which are the most effective projects. It's based on the return calculation that you're making, that presenting to the country, if you prepare for a crisis, it's going to be lots cheaper than waiting for the crisis and then paying for it after. But those have not been converted right now into saleable products. If we think about how to get the private sector into that kind of mix, meaning recognize that there's a return from that kind of investment, that the financiers could get a part of that return, that requires verification of the opportunity cost. In other words, some calculation of how much cost there's going to be if there's no adaptation versus then you make the investment into adaptation and realize the benefit from your baseline. We face the same challenge, baseline challenge, on greenhouse gas emission reduction. How do we pay for and make saleable the idea that a country is going in this direction and if we can change the curve, bend the curve down for their greenhouse gas emission reductions that's valuable to the world? And there's not yet a model to capture opportunity cost, foregone losses that are avoided. Any thoughts on how we could do that?

[José Viñals]
I'm sorry I cannot answer the 100 trillion question or maybe 200 trillion-dollar question, but I think that recognizing the problem first is important. Second, having the modeling and the research that can showcase what the opportunity cost of not acting now is, what the world is going to lose. And third, of course, given that there is an externality which is not priced by markets, one needs some government intervention in the right form, concessional finance. And again, the question is what would it take for the private sector to be ready to make that investment? I think, is a conversation that should be pursued in earnest, and going into COP28, I hope that this, and it would be a personal hope, that this is one very important part of the conversation over there.

[David R. Malpass]
We've been innovating as rapidly as we can. I just saw Jorge behind you say we only have a couple of minutes left, but I'll mention he's been instrumental in a couple of our bond projects that are able to take advantage of this. One was the Rhino Bond project in South Africa where there was the ability to verify that investors are willing to invest into a situation where you can count the number of rhinos and if it goes up, that's a global public good that people will pay money for. The World Bank issued a bond that captured that. And then in Vietnam, we did a separate bond for water purifiers. There was the recognition that if schools in Vietnam could switch to water purifiers rather than burning firewood to boil the water for sanitation purposes, there would be greenhouse gas emissions that were stopped, that were foregone, and in an important transaction that was captured. We do that also in crisis or pandemic preparation bonds, catastrophe bonds, and other kinds of bonds. So, I think innovation becomes important, but what we are trying to build out is the giant scale that's needed. You mentioned the JETP partnerships, but I want to ask, has any money flowed out of those famous projects, and is there any schedule for when there would actually be greenhouse gas emission reduction from those projects? In Komati, in South Africa, I watched them close the cooling tower and it won't be rebuilt. Is that possible in other countries?

[José Viñals]
Yeah, I think it is. I think that the JETPs are in the early stages, I think it's an interesting innovation. But again, I think that the proof of the putting is in the eating. Just to mention, in the case of Vietnam, we have signed an MOU with the government for 8.5 billion dollars to finance climate reduction projects there. And by the way, one thing which is very important is the monetization of the carbon savings that one makes, that I think is something, that monetization that can add to the financial returns in the risk-return equation, and I think that's helpful.

[David R. Malpass]
Maybe the next panel can discuss that point, that's a good lead-in. Thank you very much, José, very interesting and good luck in all your endeavors. Jorge.

[José Viñals]
Thank you very much.

[Jorge Familiar]
Thank you so much.

Thank you so much, David and José, for this fantastic conversation. You really set the stage for our next panel where we will be able to discuss more in depth some of the topics that you have introduced. We will have a very short video and then we will start with the panel. Thank you again.

[Video commentator]
Universal access to clean water is a must, yet each year in Vietnam, 9 thousand people die and 250 thousand more are hospitalized due to a lack of clean water. Children are particularly vulnerable to waterborne diseases, and millions of people endure poor air quality from burning wood to boil water to purify it. The World Bank's Emission-Reduction Linked Bond raised funds from the international capital markets to help tackle this problem. The bond supports a project to manufacture and distribute 300 thousand easy-to-use water purifiers to 8 thousand schools and other community institutions across Vietnam. These water purifiers will provide about 2 million children with access to clean drinking water and eliminate nearly 600 thousand tons of greenhouse gas emissions a year for ten years. By reducing greenhouse gas emissions, the project will generate carbon credits which will be sold. But in order for these carbon credits to be generated, the project needed financing to get off the ground. The Emission-Reduction Linked Bond brought together capital markets and carbon markets to solve this problem. It provided upfront financing to the project developer, and if the project is successful, the investor will earn a return based on the carbon credits generated and sold by the project. This innovative outcome bond is a new tool for mobilizing capital for positive climate purposes.

[Jorge Familiar]
What a great conversation we just heard between David Malpass and José Viñals. I think, as I mentioned, that it really sets the stage for our next conversation, which will go more in depth into the very interesting topics that both David and José introduced to us.

As you can see, we have a first-rate panel with us here today. The panel members really don't need any introduction. You can have their full bios, you can read their full bios on our website. But we have with us today Her Excellency Minister Rania Al-Mashat, minister of International Cooperation of Egypt, Ms. Anshula Kant, Managing Director and World Bank Group Chief Financial Officer, Julie Monaco, MD, global head of Public Sector Banking, Capital Markets and Advisory at Citigroup, and Lia [Rosalia] De Leon, Treasurer of the Philippines. So, thank you so much for joining us again, and we really look forward to this conversation about the intersection of capital markets and sustainable development.

I promise that we will have a very interactive conversation. Let's start with a little bit of context. Environment has really changed in a dramatic way. It has made it necessary for countries to implement fiscal adjustments. We are facing high inflation, rising interest rates, a series of challenges, among them economic fragmentation, and all of this with a looming challenge, which is climate change. Navigating all these complexities will require resources. Anshula, how do you see the intersection of these challenges and finance and development?

[Anshula Kant]
First of all, Jorge, thank you for this invitation. It's a pleasure to be here today and be with the audience and those who are joining us online, thank you. And of course, thank you to the co-panellists who accepted our invitation to come here. As we heard David and José earlier this morning, and as you say, this confluence of multiple challenges that have impacted emerging markets in developing countries, it has led to a huge setback in poverty reduction and inequality, and those are our key twin goals, and SDGs that we strive to support our countries with. Juxtapose it with the macros, and again, we heard earlier, David and José talking about it very cogently that the debt situation has got significantly exacerbated and there is economic slowdown. With all of this going, we need significant amounts of financial resources to help our client countries, the low-income countries, the developing countries, get back to where they were before 2020 just to make up lost ground. And then, added to the challenges, of course, the additional resources that are required for tackling global challenges. You mentioned in your opening remarks the 1 trillion number for climate change, let me mention a bigger number, a 2.4 trillion number for climate change, fragility, conflict and health which developing countries are estimated, these are estimates, but estimated to need per year over the next seven years up to 2030. You can use a 2.4 trillion number or 1 trillion, there are other bigger numbers around, it's hard to count the zeros when you get down to these numbers. But the fact is that huge significant resources are needed to get back and regain lost ground and continue on that path of sustainable development goals and combining it with the challenge of these multiple global concerns which countries need to adopt and follow. For us at the World Bank Group, we have, of course, significantly stepped up with the advent of these crises. But I think now everybody understands and there is general understanding among the global community that everyone will have to come together to meet these needs. For the IDA countries, which are the lowest-income countries, which we support through the IDA entity, they need resources for their poverty eradication programs, for their human capital programs and also for, more than mitigation, the adaptation part of climate change. For middle income countries too, which IBRD supports, these developing countries need significant concessional financing resources. I'm sure Rania will talk about it, middle-income countries face huge challenges in meeting their or trying to meet their climate targets, to adopt pathways which will lead them to low-carbon economies. With all this going on, and of course I'd love to hear from Julie about how we can work more together, but let me also say that we embarked on an evolution roadmap-related work about a few months ago at the call of the shareholders and the community at large. The effort, of course, is to see how we can evolve our mission or enhance our mission to include a focus on these global challenges alongside the twin goals. The twin goals remain at the core, of course. This will also mean significant impact for our operational model and our financing capacity and model. That work has started, we are also looking at all the recommendations that the independent panel, which was commissioned by the G20, for capital adequacy frameworks. We are trying to enhance resources, we are trying to enhance our operating model so that we are fit for purpose for these current challenges which the global emerging market and developing economies face.

[Jorge Familiar]
Thank you so much, Anshula. Minister Anshula just talked about global challenges and how an MDB like the World Bank is trying to respond. How does this look like from the perspective of Egypt? I understand also that we have a new country partnership framework between the Bank and Egypt. How does this new strategy set the path for sustainable development for Egypt?

[Rania Al-Mashat]
Thank you very much and good morning everyone. It's a pleasure to be on the panel and it's a very important juncture in the World Bank's history as well with the evolution roadmap. Let me get to Egypt and say that any middle-income country needs to leverage on the partnerships it has with the global community, our relationship with the World Bank, our relationship with the EBRD, relationship with the African Development Bank and many others. Each MDB has a comparative advantage, but nonetheless there's so much complementarity and that's how to leverage at a very tough time, whether it's the climate urgency, whether it's the pressure on emerging markets, it's very, very important to have partnerships. That's where the CPF, our new CPF, Country Partnership Framework, with the World Bank comes in. It was approved at the board on March 21st and it comes after a very detailed consultative process internally among government, but also with our World Bank counterparts. And let me say that it's an effort with the One World Bank. So, it has IFC, it has MIGA, and this is also in the spirit of the discussions that are taking place with the evolution. The CPF to us is extremely important because it is underpinned by national strategies. Country ownership is very important in setting the partnership and the next steps that we will do with the Bank. If we're looking at the CPF, three very important pointers, the human capital component, the second has to do with private sector engagement, and we just saw in the first fire chat that in order to achieve climate goals, SDG goals, it is impossible for public finances alone or for a concessional alone, there has to be private sector engagement. And then the third, of course, is climate resilience. Egypt has hosted COP in Sharm El-Sheikh last November, and therefore; climate action has become a priority for all countries. But as Anshula mentioned, the transition has to be a just transition. When we talk about just financing, it is to ensure that we have our historic responsibility, but at the same time there is quality and quantity of climate finance which also is distributed in an equitable way. These are very important principles for us in the CPF, the human capital part, the private sector part and climate resilience, and they are linked. When we talk about the next phase, private sector engagement is very important. And when we take a look at the work that we have done with the Bank in the previous few years, be it through green bonds with IFC, sorry, I mean green bonds that IFC has done with commercial banks in Egypt, or also in our mitigation projects that rely very much on the private sector, that type of financing has been available. The CPF covers the next five years, it comes at a point where we are also trying to integrate a lot of the new discussion with the Bank evolution within our framework as well. So, we look forward to a very engaging five years. We work very closely with the Bank on different sectors, and they have been very impactful. If we're looking at the social impact at Takaful and Karama, when we're looking at education, if we're looking at sustainable transport, if we're looking at, also, adaptation projects. The Bank has really been a very strong partner to Egypt. We look forward to pushing this further with the CPF being the framework that defines this engagement in the period ahead. Let me just conclude by, the CPF also allows for engagement with other IFIs and other bilaterals, and this is very, very important. This goes back to my first point, that there is complementarity, but it has to be underpinned by country vision, be it our climate strategy, be it our vision 2030, integrated energy strategy. All of this is laid out in the document itself and, as I mentioned, has been formulated through a very consultative and inclusive process.

[Jorge Familiar]
Thank you so much, Minister. I hear both from Anshula and from you that climate is very present on our minds, maybe, or rather, without a doubt, the biggest challenge facing humanity. Lots of effort going to sustainable development and with increased intensity and increased frequency of natural disasters like, for example, hurricanes, progress that is hard-won and that takes many years to build can be destroyed over a few hours.
Lia, can you share with us the experience of the Philippines in preparing to face natural disasters, which are a part of reality and will be more so with climate change? It seems to me that a critical element is counting with a safety net, with different components, that helps countries face the emergency when it presents itself. Lia.

[Rosalia V. De Leon]
Thank you, Jorge. First of all, good morning to everyone who's joining us here on site at the atrium, and, of course, here with us also online, hearing us and listening to the three beautiful women I'm sharing the stage with, trying to solve the biggest problems of this Earth.

Anyway, Jorge, in the case of the Philippines, Philippines relies on what we call the Typhoon Belt and the Pacific Ring of Fire. We're visited by, like, 20 typhoons a year. It's really a massive rehabilitation work that the Philippines would have to do to be able to, again, bring back where we were pre-pandemic, pre-typhoon or pre-disaster. We have developed what we call Disaster Risk Management Framework, or short, DRM. It's on the national level, on the local level and the individual level, and this would be able to address some of the policy actions that we'd like to implement. On the national level, we'd like to make sure that we insulate the fiscal health and also make sure that we maintain that financial soundness to be able to provide for the immediate recovery and rehabilitation post-disaster. Also, on the local level, we have to make sure that our local governments would have the resources to be able to that immediate liquidity, to be able to implement also projects to help their constituents. On the individual level, we're also protecting the most vulnerable and the poorest segment of society. Part of that DRM framework is a risk layering methodology that we have also adopted, so the risks that are more frequent but less severe so that we are retaining it, meaning to say the government will be providing for the liquidity mechanisms. We have what we call the Quick Recovery fund. And of course, the World Bank has provided us with contingency financing like the CAT-DDO. Now for those that we are also transferring to the market, so these are what we call now adopted the CAT bond, the catastrophe bonds, and of course we've also done the parametric bonds. We cannot be retaining all this risk, otherwise it would crowd out the more priority programs of the government. We have to be able to transfer some, I say some, because we cannot also transfer all, otherwise the cost would be very massive for the government. That's how we have developed these risk transfer mechanisms and, of course, that's true also, the assistance that the bank has provided to the Philippines.

[Jorge Familiar]
Thank you so much, Lia. We will want to hear more about CAT bonds and transferring risks to capital markets. But Julie, Citi is no stranger to development, a truly global financial institution, a very close partner to the World Bank. Can you share with us Citi's views on the importance of private capital facilitation and what Citi is doing to address global challenges in sustainable development?

[Julie Monaco]
Sure. First of all, thank you for having me here today, Jorge. It's a pleasure. As you know, Citi for over 200 years has been committed to economic development around the world in the emerging markets. Our view is that businesses and banks like Citi need to step up to really help with these complex global problems that have already been discussed. But when you think about it, in the last three years we've seen a global pandemic, we daily see climate impacts from disasters that are happening around the world, and now in the last year we've been dealing with a war and the fallout from a war that we never thought we were going to be dealing with. All of those things have made these targets even harder to achieve, so we're going to have to sort of double down. But what we see at Citi is the health of our business is intrinsically linked to the health of the planet, to the health of the communities that we serve, and we can't succeed without each other. The public-private partnership, there is existential threats that we're facing in the world that is only going to be solved by the public-private partnership. There's a sense of responsibility that we feel deeply at Citi that continues to shape our decisions, our business strategy, and we're driving a multitude of what we consider our ESG initiatives that are firm wide, that are impactful to the emerging markets, but I'll just highlight three of them quickly. One is just accelerating sustainable finance. Citi has made this commitment very public, a trillion-dollar commitment to sustainable finance. It's closely aligned with the sustainable development goals, that's how we're mapping it internally at Citi. Through this effort we're financing and facilitating a wide range of activities and everything from renewable energy, clean tech, healthcare, affordable housing, it goes the whole gamut. We've made significant progress on that goal in the last three years, but we're about to be issuing our ESG report, so I'm not going to share the number. You can look for that report soon.

The other is we have a long history of having a social finance. It used to be called inclusive finance because we focused on inclusive finance for individuals around the world, but it's now our social finance and it's increased its scope recently. In 2021 we issued a first of a kind, a 1 billion dollar social finance bond to support the social and economic development efforts that increases opportunities and access to essential basic services in the emerging markets, and it is part of our overall focus. Just one example of that is that we aim to invest in 15 million households, which include 10 million women. We're going to do that globally by 2025 with that billion-dollar bond. We saw that as a real commitment.

And then the third area is driving the transition to a low-carbon economy, and we're talking about climate. We're working to reach the net zero emissions target. Jane Fraser, on her first day as CEO of Citi in March of 2021, committed that Citi will be carbon net-neutral by 2050 and that we will reduce by 50% our carbon emission exposures by 2030. That really is us reducing the exposures to the loan portfolios of the hard-to-abate segments, and that is energy, power, auto manufacturing, commercial real estate, steel and thermal. So, what does that mean? In my role, we're working very closely with governments, my team is working very closely with governments to get them to understand the NDCs that they've committed to and how to work with the private sector and how to organize the projects. We had the honor of working last year, our team, with the government of Egypt in preparation for COP. But what we continue to do and focus there is on how we can bring the public and private sector together, since we have a full view from both sides and say how are we going to work together to actually achieve these goals.

[Jorge Familiar]
Thank you so much, Julie. Pretty impressive accomplishment so far, and looking forward to a more detailed conversation of some of the things that we have done together. Minister, you mentioned green bonds. A little bit of history, the World Bank issued the very first green bond in 2008. It was a very humble experiment, it was a 150 million dollar issue. Today there are more than 3.8 trillion dollars of green and sustainable bonds that have been issued in international markets. When it comes to green bonds, Egypt has a fantastic story to tell. Can you share with us a little bit about that experience?

[Rania Al-Mashat]
Thank you very much. Yes, we're the first country in the Middle East to issue a green bond. This happened in 2021. The initial idea was it to be for 500 million, but it was oversubscribed, so it's a 750 million bond. What is significant about the green bonds is the work that goes behind it and then the work that you have to do in the future, because you need to have projects which call for climate action, you need to be able to report on the outcomes of these projects in your relationship with investors. It's a very important tool. It's an all-government effort because even when the Ministry of Finance is issuing the bond, but the projects themselves that are tied to it could be sustainable transport, could be water treatment plants and other projects. It's an all-government effort when it comes to green bond. And then the monitoring of the projects, to be able to report to the investors that have invested is also very, very important. It's important, as Julia mentioned, their links to the NDCs and also to the climate strategy of the country.

The other significant impact of the green bond is that it opens up for the commercial banks also to issue their bonds. And this is what I mentioned that we have one of Egypt's private banks, CIB, also issued 100 million bonds working with IFC. So this sets the tone for regulations, it sets the tone for more investment in green, and it also sets the tone for, and this is what we saw after COP and I'll be talking about it a little bit, the ability for many companies, not just Egyptian companies, but foreign companies, to benefit from guarantees from the World Bank, through MIGA, or also get financing from IFC and so forth. The green bond is not a destination, but it's part of a journey where it is encouraging public-private partnerships, it encourages private sector investments, not just in debt, but later on in equity as well. There is more than a financing goal for the green bond. It's a signal, it fosters partnership and it also is extremely important when it comes to the after, which is the monitoring, or sorry, the reporting on the project itself. Let me link it also to, once we had the green bond, we also found that the lending opportunities for SMEs and for startups in the green space also increased because it's a very important signal that the government is taking the climate action and the green transition seriously. So, these are some of the positive implications beyond just the immediate financing that this bond provides, and then there's exploration on other types of instruments that could be availed in the green transition or to support the green transition.

[Jorge Familiar]
Minister, it sounds like a lot of work is behind it. It appears that it requires lots of coordination. Is it worth it?

[Rania Al-Mashat]
If you ask the minister of finance, sometimes he says it's easier to go and get a euro bond because then I don't have to follow through. But again, as the world has moved and the narrative around climate has changed, today if you are a big business, an SME, a government, to have a more compelling story to secure financing, green element, climate elements have to be in that rhetoric. I think that despite the extra effort on the finance side, the positive outturn and the spill-over with the climate story, the transition story, and then in our case, June 2022, we launched our 2050 country climate strategy. It has the sectors that we want to open up for investment because by no means can public finances or debt only achieve the goals that the country wants when it comes to climate projects, this has to be intertwined with private sector engagement and also public-private partnerships. Having the country strategy for climate, having a green bond, later on I'll talk about our country platform that also is designed to bring in private investments. All of these points put together, again, are extremely important at this juncture as investors are also looking at countries from their climate standards, if you will.

[Jorge Familiar]
What do you think about this, Julie? Do markets care? Do investors care about…?

[Julie Monaco]
Absolutely, yes.

[Jorge Familiar]
Let me now go to you, Lia. You mentioned transferring risks to markets and CAT bonds. We have worked together in this. Three years ago, the Philippines and the World Bank together embarked on a CAT bond experience. Can you share with us your thinking about this experience and what came out of it?

[Rosalia V. De Leon]
Yeah, but let me remind you, Jorge, that it's been a long journey with the Bank. We started way back in 2015 and I see Miguel over in the audience, so he's very much familiar how we have put together the structure for the CAT bond.

First of all, Philippines again is on this Typhoon Belt and that Ring of Fire that are more frequently visited by typhoons and earthquakes, so we really have to be looking for creative and very innovative solutions to be able to provide that kind of financial protection. At the time then, the CAT bond, it's very complex in nature and at the same time, even in terms of the concept, and at the same time also, it's very hard to understand because it's a novelty. We're very happy that the World Bank has been very persistent and at the same time patient with us in doing the structuring for the bond. We were able to successfully put together the structure way back in 2019 and put that in the market. But then it also required a lot of grip and of course, a lot of communication to our public that, why are we providing this on a part of the budget for premium payment? And if nothing happens, then what? You lost the opportunity cost in providing more services for our constituents. But nonetheless, we went ahead with our own excess income from the treasury. It did not require any budget appropriations. But the next thing to do is to understand the structure. What do you mean by 1 in 19, 1 in 100 events? All these things, together with the World Bank, we have conceptualized what are the risks that we will have to put into this CAT bond. So luckily, there's also the grant that we were able to get from the monetary authority of Singapore that also defrayed the upfront costs. At the same time, also, for the CAT bond, when we were doing this, the Philippines was viewed as a diversifier in the CAT bond market. There's a lot of those going already, like the likes of Mexico. Going into the CAT bond market, then we provide that kind of diversification of risks to the market. With that, we're able to get the biggest bang for our buck because in terms of the risk coupon, so it's even lower than the market average at that time. That's another achievement for the Philippines. And of course, it was triggered. I'm not saying that it's very fortunate to have triggered that, it proved a concept that it is really something that emerging countries like the Philippines, who are very vulnerable, can really have this kind of structure to be able to have that immediate liquidity. It was triggered by one of the strong typhoons that visited the Philippines. I think 35% of the one that we allocated for the typhoon because we also split the structure. About 150 million dollars was allocated for the typhoons and of course, the rest of the 20-25 million dollars we allocated it for earthquake. But then there would have to be some communication to be done to our public. Why are we venturing in this unchartered territory? But also, luckily for us in the credit ratings, this is something that proved to be positive because we are providing that protection. We are providing that kind of financial shield to our budget, to our fiscal position. So that also sent good signals to our credit rating agencies that Philippines, while we are vulnerable, we are also doing something with that kind of risk.

[Jorge Familiar]
Thank you so much, Lia. Two takeaways from what you mentioned. The first one, when one thinks about disaster risk preparedness and disaster risk management, it shouldn't be an instrument-by-instrument conversation, but rather building a comprehensive system and different instruments play different roles and CAT bonds are there. Second, I think it's an interesting instrument because first, it involves capital markets, it allows for the transfer of risks. For investors, it has two layers of development because this is a World Bank bond that supports our activities, hence investors are being exposed to sustainable development from that perspective, and then helping a country manage disaster risk, so interesting from that perspective, interesting structure. I mentioned that the World Bank and Citi have a very strong and long-standing partnership. We have partnered in green bonds, in sustainable bonds, in CAT bonds, in Rhino Bonds, more recently, as you saw in this video, also on carbon-linked bonds. Julie, can you share your perspective on all of these innovative financial structures and why they are important?

[Julie Monaco]
First of all, we are aligned on the development objectives across the entire network. Our long-standing partnership with the World Bank is we're serving the same clients in the same countries all over the world and we share the same value that economic progress and development go hand in hand. We've been strategic partners for a long time. I think that going back to 2008, us being together on the first green bond just shows that we're always willing to push the envelope together on something that is innovative and do that at a smaller size and then actually create a market. So, when you look at the three bonds, you're talking about the UNICEF, the wildlife conservation, and the emission-linked carbon bonds, they're all truly first of their kind transactions. They're small sizes, but I know, as we know when we've worked together in the past, that we're actually just sort of breaking glass and going out on a frontier and that over time, these will be incredibly important instruments for reducing that gap around the financing. I know you want me to share a little bit of each of the details on each of them. So, the UNICEF bond was a 100 million, five-year bond for which Citi acted as the sole structurer and manager. It was unprecedented because it enabled UNICEF to benefit from the World Bank's access to the capital markets and then not have to have the debt directly. The structure was really unique in that the World Bank leveraged UNICEF's brand and drew in the market's sort of interest and attention, but not only from institutional investors, but we worked very closely and got the Citi private bank clients involved. Citibank, we have a sustainable investing team in our private bank, and this was the easiest conversation they had to have because there was this great impact associated with it and every investor wanted to know more. Our private bank platform has given this access to this bond to high-net-worth clients, and so this is sort of an innovation that we'll be able to work on for future sustainable development bonds in other areas. And now on the wildlife conservation, which everybody's nicknamed the Rhino Bond, it was a five-year, 150 million dollar sustainable development bond, and again, it was a small bond, but it was the largest ever US dollar denominated bond issued by a supernational. The innovation in this transaction represents outcome-based, so we're looking at an outcome-based approach in a conservation financing that passes project risk to the capital market investors and allows the donors to pay for conservation at the same time. I think that the bond itself was small, but it can have a big impact going forward. And then, instead of coupon payments to the investors on this particular bond, we'll make the conservation investment payments activities to these two parks. If it's successful, it's going to be measured, it's going to be measured by the rhino population and the investors will receive a conservation success payment at the end of it, which made it very innovative. And then finally, I think you actually already saw the carbon-linked bonds, son the interest of time I won't go into the detail on it, but this one I think was really important because it's showing the power of private capital to scale the voluntary carbon market. This is something that's still in its infancy, it's still in its early stage, it was innovative for us to do this together, but it's the very beginning of how we're going to use carbon credits and the voluntary carbon credits as a way to fill that gap on sustainable finance.

[Jorge Familiar]
I couldn't agree more. Maybe in the next round we can talk a little bit more on how we can scale this up and how we can use issues like the carbon-linked bond to further development and to support other structures. And you talked about small sizes and that's what happens when you're thinking on trillions of dollars that are needed to meet the challenges. But 150 million, 50 million, amounts are sizable. The other takeaway is you refer to the Rhino Bond, that’s Wildlife Conservation Bond, which is the proper name of it. I have already been told that I need to be careful when I'm talking about CAT bonds and Rhino Bonds together, because then people start asking, what type of cat are you supporting? I will take that advice going forward.

Anshula, MDBs are called to play a very important role in bridging this gap between the financing needs and sustainable development. These Spring Meetings have really been centered around finance. Our development committee a couple of days ago… I've been participating in development committees for 20 years and I have never heard a Development Committee focus so much and talk so much about the importance of our financial capacity. You have been leading the way in these efforts. Can you share with us a little bit what are the agreements and how do we move forward in implementation?

[Anshula Kant]
Before I do that, Jorge, I think I found this segment of this conversation so interesting with Minister Lia and Julie. I think what really stood out through listening to all of you is the power of partnerships. You mentioned it in your opening remarks. We need the government, we need donors, we need the private sector, and we need institutions like ourselves to intermediate. This is the power of four of us or five of us sitting, if we can come together as institutions, as governments, as donors, as shareholders, then that 150 million maybe has the power to get translated into trillions that are needed really. From the World Bank Group perception, let me just remind everyone that transactions like the ones we talked about, whether we do it in an advisory capacity or a technical assistance capacity to support our governments and clients to raise green financing, sustainable financing, or it is to plug the… Some at least showed up, some disaster risk management liquidity needs post a disaster happens or it is these innovative transactions. What does it do for the countries that we serve and we help in this manner? It saves on capital. There is no capital that is used up in these transactions from the World Bank Group. Capital is the most precious resource today. That's this whole evolution roadmap conversation around financing capacity is how to increase resources, means how much more capital you can have to leverage. The other thing it does is it's a little bit of an internal matter, but you would know that, Minister, and so would Lia, that transactions like this do not eat into the country exposure limits that we have. These are outside of that, the risk management and the risk transfer happen to the private capital markets. So, the risk doesn't sit on the World Bank Group balance sheet. It's a win-win situation for everyone. I think this is how we need to scale up and that's the way forward, I think.

Now, coming back to the evolution roadmap work, I will not go into the gory or micro details, but what we have done so far, we are pretty happy, actually, with the progress made over the last few months. Where we are today is there is a broad acceptance of which way the mission statement should be amended or enhanced. There is agreement of in which direction we should do our work related to the operational model. On the financing capacity side, today we are at a point which three or four measures that we have actually got approval from the board and our governors, they have the potential to add up to about 50 billion dollars in additional capacity over the next ten years for IBRD. One of those is key, and this is, I think, fit to discuss in this audience, is that one of those initiatives is the IBRD issuing a private investors focused hybrid capital transaction. Issue hybrid capital from IBRD into the capital markets, which has features of both debt and equity, which will allow us to leverage those funds to deliver more to our client countries. If we are successful in doing this well, it will open doors to bring in the private capital into development needs.

The other thing, of course, going forward, having done all of this, the next question is what next and what are we going to get up to in Marrakesh. That is the question before us. Again, there are many things that we are exploring, things like callable capital, things like shareholder-supported hybrid capital. We are exploring actively risk transfer arrangements. We've done some of those already up to the Spring Meetings, we will do more of those. But one thing, Julie, that we are really trying to explore is co-financing arrangements, how we can scale that up. Co-financing is not something new, but we've done it multiple times, many times in the past with other development partners, but we would also love to explore options and possibilities with the private sector. In some ways bringing efficiency of delivery of resources to client countries where we don't repeat efforts that are made, due diligence effort, project efforts, etcetera, where we can share some of the efforts that we make in that direction. I think going forward, Jorge, it is all about partnerships and what more and how we can do this. That's the only way we'll be able to scale up, really.

[Jorge Familiar]
Thank you so much, Anshula and I fully agree with you, and I think that this panel very well represents that partnership that we continue to build on. Minister, we've talked about the needs and the resources available. You have a wealth of experience. Before your current role as Minister of International Cooperation, you were Minister of Tourism and you were mandated with running this sector with private sector approach. What would be your advice for other countries embarking on the same journey? What are your views on what are the critical interventions that governments can do to make the private capital flow more effectively to sustainable development?

[Rania Al-Mashat]
Today, any sector and this is the beauty of SDGs, SDGs, the 17 are so real in the sense that any investment, any sector, you can link it to more than one SDG, or there could be one designated to it, be it tourism, be it agriculture, etcetera. The first thing that you mentioned, tourism. Tourism is a sector that has an employment multiplier of one to four. The impact on decent jobs, the impact on gender equality, the impact on also life above water, life below water with the different sites and so forth, is very real. Private sector today, and Julia talked about that, the ESG metric is also linked very much to fulfilling SDGs as well. Even when we talk about the financing needs to close the SDG gap, it also cannot happen without the private sector. It's also very much linked to the climate goals as well. There's a lot of, I don't want to say there's double counting, but all of the goals are more or less aligned if we make an effort to tell that story. This is extremely important. As policymakers, when you are designing a policy, when you are trying to attract private capital or foreign capital, you also need to be very mindful in setting the framework that allows both the government and the private sector to achieve these goals. Because at the end of the day, it's very important if we're trying to finance or if we're trying to tell a story, that it is a story of sustainability, job employment, no hunger, trying to eradicate poverty, that's the whole idea of having a successful sector, be it tourism or be it a wind plant that you have, or solar plants, etcetera. So let me put it also in the context of MDB financing. I want to speak particularly about a country platform that we put together that has adaptation mitigation. The idea was to leverage on concessional finance to be able to draw in private sector, and in this platform, the Nexus of Water, Food and Energy, NWFE, again, for each of the pillars there's a lead MDB working with us on that. The concessional element is there to be able to blend private sector engagement, and we worked with Citibank on this as well. This is, again, a way to say MDBs, private sector, but at the very first level it's government with its policy. That's what opens the door to be able to leverage on the power of partnership. There needs to be a very clear awareness of this. You can be our partner or the partnership can be as strong as each one wants to invest, invest in policy, invest in innovative financing tools, invest in trying to make sure that our narrative and our story is one where climate and development are not mutually exclusive, on the contrary, they push in the same direction. These are some of the… you mentioned over the years, this has been very much entrenched in my thinking. When I was Minister of Tourism, I said we want sustainable tourism and there's 17 SDGs with tourism in the middle, and for each one of them, it's very much linked to the sector in a certain way and also ecotourism, what happens on coasts and what happens in the desert and so forth, all of these also are SDGs, as well as climate goals as well. There are many interlinkages, and we need to be aware of those, talk about them a lot, and try to find the partnerships that actually push the message forward.

[Jorge Familiar]
I think that this is a very interesting framework and a very appropriate framework. I would even call it a holistic approach, where one intervention generates more than one benefit, has a positive impact on more than one SDG. In fact, at some point, we transitioned from focusing on issuing green bonds to sustainable bonds, precisely because multilateral development bank interventions tend to generate benefits with respect to more than one SDG at a time. I think that this is a very valuable framework to keep in mind. I was recently in Hong Kong listing a CAT bond for Chile, a very interesting transaction as well, half insurance, half CAT bond. It was interesting to see the power of markets at play. The pricing was driven by the CAT bond element of the transaction. It ended up being even more successful than we expected. Asian markets like Hong Kong, like Singapore, are trying to establish themselves as hubs for insurance-linked securities. Lia, you shared with us your experience so far. Given everything that's going on in Asia, can you share with us a little bit of your plans for the future?

[Rosalia V. De Leon]
So, what's next, Jorge? When you talk about disaster risk management, you always think about financial resilience. But I've came across what Nassim Taleb has also mentioned. It's not just being resilient, because resilience, you resist the shock, but you stay the same. You have to be more antifragile, because then you become better. How do we make ourselves better, the Philippines better? For that, I think information would be king. So what we have done is put together what we call our National Asset Registry. Here we have an inventory of all our strategically important assets. These are the hospitals, our school buildings, our roads and bridges, which are really very prone and very vulnerable, and of course, the social cost of the destruction from disasters would be very massive for us. We are putting together that registry and at the same time leveraging it with information, because information is king. Now, how do we get more information? Through technology. We have used our archives, meaning to say we have been able to profile the risk of these different assets and also be able to provide the risk management mechanisms to be able to protect. How do we rehabilitate and provide the funding for all these assets? So that's one, and also in the government, we have established what we call the Philippine Government Asset Management Policy Group. This group is in charge of formulating guidelines on how, again, to provide that financial resiliency to these assets from the whole virtual cycle of asset management, from procurement to construction and to the maintenance of these assets. The other thing that we're also doing is being able to have a deeper dive into our agricultural insurance, because our farmers are also facing poverty, so we have really to provide the most protection to our farmers. We are also leveraging on the private sector to be able to provide that partnership with the government to give the biggest bang for the buck for this initiative. I think Philippines, we'd like to continue to replicate what others have done, but at the same time on our own backyard, provide some examples, what we can contribute to other emerging countries like the Philippines.

[Jorge Familiar]
Thank you so much, Lia. Julie, Anshula mentioned the importance of partnerships, you talked a little bit about some of the innovations that we have done together. I shared with you that the green bond experiment, the labeled market experiment, started with a humble 150 million transaction that today is a trillions of dollars market. What's next?

[Julie Monaco]
I think that as private institutions, we have to continue working with the MDBs to understand all the products and services that you have globally and how to use them more. Within my team, we are doubling down on that. We have a history of doing that, but we want to spend more time really understanding how the various products, and you brought up co-lending, we have some examples with IFC and across other parts of the World Bank with IFC around doing more co-lending. Last year, we did co-lending to women-led households and enterprises in Panama with the IFC, and we partnered to provide mortgages to small and medium enterprises to women. The joint initiative offers… it was a first of
a kind co-lending transaction. The proceeds of the loans were either used for low-income houses where women are the head of households or the head of businesses, and also Global Bank, which was the bank we worked with on the ground, they then partnered with IFC to do the advisory work for how they could build up services for women. It was a really good partnership. And it is an example of mobilizing private and public funds together to deliver sort of robust financing. I think that you're right that we could be looking at more opportunities to do co-lending. We had another example, we did a risk sharing facility with the IFC for banks in Turkey where they were able to co-finance with us on the syndication of a loan facility to allow more funding into import and exporters at a time when their economy was stretched. I think that these are the types of things we have to be looking at doing more.

I'm going to end on the one that we focus on a lot, which is MIGA. I think that MIGA is an incredible tool that the World Bank has for unlocking more capital. But I do believe that MIGA needs to be scaled, and MIGA needs to have its mandate broadened so that it can apply to more things than the private capital, and then the private capital will come. That is part of some of our recommendations around some of the adjustments that can be made and changes. Because I think in the end of the day, and I said this on the Global Infrastructure Facility panel yesterday, we're not short of innovation, we have a lot of ability to innovate together. The challenge is scaling it.

I think there's two approaches to the scaling it, it's us getting in a room and really having dedicated focus on what are all the constraints that you have and the constraints that we have that are keeping us from scaling it? And how do we work systemically together to peel away that onion and get the help we need, whether it's from our regulators, whether it's from the donors to really remove those obstacles for scaling it? Then, the other thing is, when we do something innovative, it's amazing how we can come together to do these incredibly innovative transactions. We need the same sense of urgency, of replicating it and scaling it, that we… I think we may be exhausted after we get through doing one of these innovative transactions and everybody takes a breath. We don't have time to take a breath. We have to be able to say, what are the next ten? How are we going to replicate this? How are we going to share this? And we do that because we don't believe that development banks should be competing with each other. Any best idea, we should get it out to as many as possible because we need everybody to be working off the same song sheet to achieve what we want to get accomplished.

[Jorge Familiar]
Anshula, what's next?

[Anshula Kant]
I've been in a listening mode, actually. Minister, you talked about that platform where the beginning happens with policy enablers. I think, Jorge, if you look at all the roles that the World Bank Group is trying to perform, this is one of the key roles that we play, that is private capital facilitation, not simply just mobilization. Work with our sovereign governments and our client countries to see how we can improve the policies, the frameworks which can facilitate private capital. In the earlier section, when David and José were talking, he talked about the governance risk as one of the risks, why private capital hesitates to go into some of these markets. For me, I would say technology is the one big game changer. Lia, you mentioned how you use technology for information on assets, etcetera. But technology has the power to scale up sustainable pathways for development, so cutting edge technology, transfer of technology from developed markets into the developing countries. The other is the digital aspect of it, the digital technology and access to Internet, which can make growth more inclusive, there will be financial inclusiveness, but above all, it helps in transparency and improved governance. I think the power of the digital, and here again, it's not that the MDBs or World Bank Group can do it on their own, private sector plays a huge critical role, not only as a provider of finance, but as an active participant in this story of how we can propagate growth, which is more transparent, which is more governance oriented. And, of course, being a woman and seeing the gender balance on this stage and this dais, I cannot resist saying that the participation of women in the labor force will be a great trigger for growth as we go forward. Without growth, there can actually be no poverty reduction, there can be no sustainable development. I would say that together, the power of partnerships, and Julie is really very keen to make this work and work together so that we can do this in a pragmatic way and we can scale. Scale is important, and we don't have time to waste now. I’m very happy with this partnership, and may this prosper and take things forward.

[Rania Al-Mashat]
Shared prosperity.

[Anshula Kant]
Shared prosperity, yes.

[Jorge Familiar]
Anshula, I don't think I can summarize this session any better. I think that we've talked about the importance of partnerships, the opportunities ahead. It's not all about what can be done with the capital of multilateral development institutions, but rather how we can facilitate other interventions. There are many actors which share the same objectives. If we work together, if we continue to be creative, if we continue to innovate, if we strive to scale up, we will fill this gap between the enormous needs that we have and the limited resources that we have. And then this final point you made, when you have the appropriate gender balance, the outcome is even better. I don't know what that says about me, but I want to thank you all for this fantastic panel, for these very strong partnerships, and I look forward to continue working with all of you to turn all of these things into more realities. Thank you so much and thanks to all of our audience.

[Audience applauds]

[Anshula Kant]
Thank you to the audience.

[Jorge Familiar]
So, you will be able to watch the replay of this session as well as our other events throughout the week on live.worldbank.org/springmeetings2023. We hope you've enjoyed hearing from all of our distinguished guests at today's event, and please continue sharing your comments online with the hashtag #ReshapingDevelopment. We'd love to hear from you. Again, I'm Jorge Familiar, and thank you for joining us.

[Audience applauds]

[Music]