[Gregor Schwerhoff] To hit net zero by 2050, emerging and developing countries will need substantial amounts of additional renewable energy investment. So, is clean energy just a matter of money? Not quite. But because domestic financial resources are limited, Foreign Direct Investment or FDI is key. FDI unlocks funds for renewable energy projects like solar and wind energy. So, how can these countries attract more FDI. Domestic policy choices have an important role to play. Countries with strong climate policies attract more FDI. Developing them further could triple the ratio of green investment to GDP. These policies alone could bring in as much as 40% of what’s needed from private investors. And of course, potential financers are more motivated by a low risk, high reward return on their investment. Countries can lower risk and create ongoing revenue streams through power purchase agreements and feed-in terms. Investing in complementary public infrastructure such as electricity grids is also helpful. But more standard reforms also make a difference. Countries can support investment by fostering more openness when it comes to trade and capital accounts and improving the quality of financial institutions. For instance, sub-Saharan Africa has immense potential for solar and wind power, but so far, turbines and panels have only just started to gain traction. What’s holding them back? The high cost of initial investment and other structural constraints deter development of what would otherwise be a win-win opportunity. Energy, generate renewable electricity and help meet energy needs, all while driving economic growth and creating a return on investments. Investing just 25 billion dollars every year into Africa’s renewable sector could transform energy access, create jobs, boost electricity production by 18%, and increase GDP growth by 0.8% points each year over the next decade. Advanced economies have pledged at least 100 billion dollars annually under the Copenhagen Accord to support the green transition. A new goal is expected at COP29, but that international cooperation will remain critical. Policies can drive significant change. Reforms in governance, the external sector, and business regulations can boost climate finance and electricity generation. In sub-Saharan Africa, ambitious reforms could increase climate finance by 20% and electricity generation by 7% over five years. Emerging and developing economies with strong climate policies are benefiting from increased foreign investment and a booming renewable energy sector. Investments in electric vehicles and green hydrogen are also rising, helped along by national strategies and international partnerships. The path to a sustainable future relies on smart investments, strategic policies, and international cooperation.
[Pilita Clark] Well, welcome, everybody. It’s great to see so many of you here today. My name is Pilita Clark. I’m an Associate Editor and Business Columnist at the Financial Times. I’m very pleased to be here to discuss one of the central questions that is being tackled here at COP29, namely, how does the world manage to get enough green finance delivered to emerging market and developing market countries in order to achieve a green energy transition? I’m extremely pleased to be able to welcome our panel here today. We have Kristalina Georgieva, who is the Managing Director of the International Monetary Fund. We have Ajay Banga, who is the President of the World Bank. Nadia Calviño, who is the President of the European Investment Bank. Mohamed Jameel Al Ramahi, who is the Chief Executive of Masdar, which is the UAE’s very fast-growing renewable energy group. Welcome, everybody. Let’s go straight to one of the very big questions that everybody is talking about here in Baku, namely the US election result. Let me ask each of you, what difference do you think that this election result is going to make to your work on the climate? Kristalina.
[Kristalina Georgieva] Welcome, everybody. Great to have you with us. We look forward to be working with the new US administration. We have great tradition of working with everybody in office, and actually an administration ago, we worked with a similar administration. They have a mandate from the American people. Well, let me make one very important point. When I look at US, private sector, innovation-driven economy, it has the largest number of green patents in the world. It is a business proposition to stay ahead the curve, and I have no doubt that this will continue.
[Pilita Clark] Okay. Ajay.
[Ajay Banga] As I said in a panel a little earlier today, he’s won by a margin and a historic margin, so you have to start with that and respect for what that represents. The reality is that what we’re trying to do with the Bank is to make ourselves faster, make ourselves more efficient, work better with the other MDBs, and get involved with the private sector and get things going on jobs. In general, as I’ve said for the last two months, that should transcend administrations, but he’s going to have opinions. We’re going to talk to him. That’s our job. In the 17 months I’ve been on this role, I’ve had a change of government in Japan, a change of government in Germany, a change of government in France, a change of government in the UK, and now in the United States. My five biggest donors. It’s life. We have to deal with it and work the right way.
[Pilita Clark] Well, you will become President of the World Bank when there’s an historic mega election year pending. So, can’t blame all of these. [Ajay Banga] That’s all right. [Pilita Clark] Nadia.
[Nadia Calviño] Well, I think that beyond politics and debates and noise, the reality on the ground is quite clear. The cost of climate change is becoming increasingly unaffordable. The examples are clear throughout the world, most recently my home country in Spain, but also in the US, very often. At the same time, there is an energy revolution in full swing, and climate action is becoming more and more a good business proposition as Kristalina was saying. I think the private sector is getting on with it, and citizens are increasingly aware of the cost of climate change and asking their leaders to tackle it effectively. That is the reality on the ground. We can spend time just discussing issues, but I think it’s better to get on with it, and ourselves, as we are doing, work as best as possible together to mobilize green finance, public and private finance, and have maximum impact on the ground.
[Pilita Clark] Mohamed, Masdar has got a lot of investments in the USA. This question is an interesting one to hear you answer.
[Mohamed Jameel Al Ramahi] The US, for us, is a key market, it has been a key market for almost 10 years. We experienced several administrations, as you can imagine. We deployed 5 billion dollars in the US already, and we will continue growing our footprint in the US. In fact, a lot of the red states in the US, they deploy a lot of renewables. They are very supportive of renewable energy. We don’t really see any impact, honestly, within the US.
[Pilita Clark] Yeah, because you’ve got quite big plans to expand in the US, and you don’t think that that’s going to be affected, essentially. That’s what you’re saying. [Mohamed Jameel Al Ramahi] Indeed, yeah. [Pilita Clark] Yeah. Okay, let’s dig into this question of finding more climate finance for developing economies. We all know how hard this task is. We’ve been talking about this at COP after COP. I didn’t go to the 1995 COP, the first one, but it wouldn’t surprise me if it was probably very much focusing on exactly this question. Particularly in recent years, I guess, and not even that recent, there’s been a big focus on how much private finance can be mobilized. It really hasn’t happened to the extent that people have been hoping for and have been calling for. In fact, there’s a really interesting book that’s just come out by a former World Bank economist who says that private contributions to developing country infrastructure projects peaked at less than 160 billion in 2012, with only about 10% going to lower income nations, and the number has fallen since. But I just wonder, Kristalina, what do you think is really the key to boosting the role of the private sector when it comes to funding the green transition?
[Kristalina Georgieva] Well, the most important thing is good policies. The research we have been presenting tells us that if you have good policies, you attract more Foreign Direct Investments. In fact, when you look at the countries that are record-setting in this regard, Chile, Uruguay, Vietnam, how do they do it? By having predictable regulatory environment long term, by moving in purchasing power agreements that say you are investing in renewables, I’m sure you would agree with that, you’re investing in renewables, they would be paid back for you. This is what we excel at the Fund, to work with countries, to help them have good policies that would make them more attractive for private investment. But it would be unfair to stop here because we also need the international financial institutions to massively step forward. I have been working in international finance for as long as I remember. What I can tell you is that there is a dramatic improvement in the way we work together. Unprecedented cooperation. Why is this happening? Because of the urgency of what needs to be done. What we all recognize is that emission reduction is slower than it has to be, and most of it has to come from emerging markets and developing economies, whereas risks from climate shocks is bigger than we thought it would be. Imagine where we are. We have to mitigate and adapt at the same time with the same sense of urgency. This is what is making us, here on this panel, much more aware of our collective responsibility. We have many examples that show how the way we work has changed. I’ll give you just one at the Fund, we have a long-term financial instrument for climate action. It’s called Resilience and Sustainability Trust. We have 48 billion and 20 programs so far. The best programs, when we do it together with Ajay, when we create fiscal space and good policies, and then the Bank makes a massive transformative investment. This is how we do it. [Audience laughs] [Pilita Clark] Okay. That’s going to be a tough one to follow Ajay. [Ajay Banga] I’m used to following Kristalina.
[Pilita Clark] Well, what I wanted to ask you, Ajay, was about this Private Sector Investment Lab that the Bank launched about 18 months ago now. That was basically been co-chaired by Mark Carney, UN Special Climate Envoy. It was basically specifically going to look at what sort of improvements and reforms could be made to try to boost private sector input here. It came back with this series of recommendations, including greater use of World Bank guarantees, measures to cut foreign exchange risk and so forth. I just wonder if you can briefly just tell us what’s the Bank doing to implement those recommendations and what impact ultimately do you think they might have?
[Ajay Banga] I mean, look, first of all, ever since I came here 17 months ago, you’ve heard me talk about the importance of getting the private sector into this because there are not enough resources in the fiscal systems of governments or in our balance sheets to make this transition happen the way it needs to. You have to get the private sector in. The reality in the case of that private sector lab is that it was aimed at renewable energy in the middle-income countries. Very focused on that. We would end up trying to create a limited space we could work on. If solar and wind per unit are now cheaper than fossil fuel, then why is it that there aren’t billions of dollars waiting on the doors of these middle-income countries beating the door down to go in? It turns out there were five recommendations. All of which we’re working on. The first one goes back to what Kristalina was saying. It’s the regulatory policy certainty. Almost every investor needs to know that they can look forward with clarity of what’s the climate policy in this country, what’s the investment climate, land acquisition, tariff policy, laws and court laws and so on. If you provide that, it makes a big difference. While we’re doing it in different ways, a tangible example is the 300 million people we’re trying to reach in Africa with electricity by 2030. Fifteen countries right now, heads of state, are preparing energy plans, compacts, that will be presented at the end of Jan in Tanzania to private investors and other MDBs, including the IMF and other folks here so we can talk about what is it that they’re going to commit to do to make it more attractive for the private sector to come to their country. That’s the first piece. The second piece is guarantees. We pulled all our guarantee platforms together across the World Bank, put them in one institution, are simplifying the product and pricing, simplifying the due diligence so that people can get access to these quicker. We’ve already doubled the amount of guarantees we’re doing. The first quarter was three times last year’s, and we’ve only just begun the simplification. If we do this well, we should be able to scale our guarantee platform so that even if you get regulatory policy clarity, you may still have political risk as a private investor. That’s what this guarantee does. For the third thing we’re trying to do is to put ourselves… The recommendation was, can the Bank become the first risk taker? Meaning, can you take junior equity? If I’m a private investor and you take junior equity, you might put me over the edge. In terms of convincing me that this is a good investment because I’ve got lower risk. What we’re doing for that is creating something called the Frontier Opportunities Fund, which is funded partly from the IFC’s own retained earnings. We’re going to go to philanthropy and take funding money from them if we can and use that as the way to absorb the ups and downs of taking a first loss position in such a place. This should be ready within the next 60 days to launch. It’s going through our board right now. The fourth item is foreign exchange. So, you’re investing in a solar energy plant. It’s got a 30-year payback, and you can’t hedge the Indonesian rupiah for 30 years. You can’t hedge the euro for 30 years or even the pound sterling. Certainly not other currencies. It’s hard. How do you manage that exposure? There are two or three ways. One of those is to do swaps with the extra currency that local commercial banks have. If we take India, India has 8,800 branches in the State Bank of India. They have tens of billions of dollars of surplus deposits every day, which they park with the central bank at a few basis points of return. If we can offer them 5 and 10 basis points and get that to work for an investor, effectively, I take away the FX risk from the investor and bring it back to me doing swaps with the central bank, which I can do. IFC is already at about 35% of its originations coming in local currency. So, this can work. There are other ideas, like a multi-layer risk, and not enough time for that, but there’s stuff to do. This is the hardest one, by the way. Then the fifth one, to me, is actually the one with the most potential, but probably the longest time taken to get it going. That is the idea of taking these kinds of loans and making them into an asset class. If you could take loans on energy or water and so on, let’s say I went to BlackRock and said to Larry Fink, “Hey, Larry, wouldn’t you like exposure drinking water in Africa?” He would say, yes. Then I give him 22 projects from 7 million to 100 million. He has to underwrite each of them. They have different covenants, different structures. It’s not going to work. You have to standardize these loans, put them into a wrap up, create a rating agency wrap up around them, and then you can start creating a market in these securities. We’ve got Doug Peterson, who’s just stepped down from Standard and Poor’s to run this for us. He, along with a few institutions like BlackRock and a bunch of commercial banks, HSBC, Deutsche, JPM, and a few pension funds, are going to work on this idea to see if the MDBs, not her so much, but us and others like us, can originate loans with standardized covenants and the right kind of wrapper for a rating agency wrapper. This, to me, is the real opportunity out 2 to 3 years. [Applause]
[Pilita Clark] Okay. That is quite a long list.
[Ajay Banga] This is real work. What I’m trying to say to you is the idea that the private sector should enter in like six months because you tell them to, is not going to happen. They’ve got places to invest their money. You have to make that money predictable as a return and a good enough return so it chooses to come here. This is not going to be a magic wand. It’s hard work. It’s blocking and tackling, but it’s eminently doable with the right kind of patience.
[Pilita Clark] Yeah. So that’s a really interesting list. Nadia, as you’re listening to that, and obviously you’re already very familiar with it, what’s going through your mind? At the EIB, is there any similar process that’s been going on?
[Nadia Calviño] This is a joint process that we work in the Multilateral Development Banks, working as a system, as I was referring to at the beginning. But I would add to Ajay’s five points, I would add three more things that we’re actually doing. First is investing in those public infrastructures that are absolutely indispensable for the private sector to thrive, like energy interconnectors, electricity interconnectors, without which it cannot have the balancing of the investments that may be put into renewables or others. Secondly, we’re being innovative and creative in terms of financial instruments, from the Green Bond Fund to buy green bonds, to debt for climate swaps and conversion programs like the one we just did with the Inter-American Development Bank and Barbados. We’re bringing in the private sector in those programs. We are effectively being innovative, I would say, in de-risking and trying to mobilize private finance. But the third area, and actually, Ajay, you and I, we’re leading this, it’s the GEMs project, which is what we’re doing is we’re providing very valuable data to the investment community, 40 years’ worth of detailed data on all the countries around the world and the experience of multilateral development institutions, financial institutions. We have put it all together, and it leads to two very interesting conclusions. First is that the likelihood of default is lower and the probability of recovery is higher than one would have expected from less developed economies. Actually, investors can be attracted and can find a good business this proposition in investing in these countries, better maybe than one would have thought. Secondly, that diversification throughout the world makes sense. That is also a very important message to investors. We are also, I think, leading the way showing which are good investments, we de-risk, and so they can come afterwards. Then we can also provide very valuable data, which we just disclosed some weeks ago, and we continue to improve this database to the benefit of international investors.
[Pilita Clark] Yeah, because that is something that investors have been asking for some time. That is now coming out. Mohamed, I just wonder, from your perspective, Masdar is doing a lot of work and making a lot of investments in emerging markets and developing countries. I just wonder, from your perspective, what do you think are the main barriers to private sector investment there now when it comes to green and clean energy projects?
[Mohamed Jameel Al Ramahi] I’m lucky to be sitting here as an investor, and I thank all of you for supporting investors like us and ensuring that we deploy our capital to where it should go. Obviously, looking at the emerging countries and developing world. We’ve developed projects in 40 countries. We are active in 23. Half of these countries are emerging or developing countries. We started our journey in an emerging country based in Abu Dhabi. Here in Baku, two days from now, we will be doing the financial clause for two solar farms, around 700 megawatts. Last year, we inaugurated the largest solar farm in this country, 230 megawatts. What happened? We started the journey in Azerbaijan in 2019 with the support of the likes of EBRD, the IFC, working closely with the government. The government did not have regulation nor they had a policy. They had never had an independent power producer as a foreign direct investor here. Most of the power generators are state-owned. They don’t have PPAs. Even if they have a PPA, this PPA is not bankable. It literally took us almost four years to work with the government, but the reality is the government should be ready for a change. Leadership is important. Without a leadership, there is no business. When we started with Uzbekistan, same thing in Uzbekistan. Today, Uzbekistan in Central Asia is one of the largest countries that is deploying renewable energy. In Uzbekistan today, we have at least 2 gigawatts under construction or operation, 2 gigawatts of renewables, where that grid, before we started, it was a fossil grid. We have decarbonized the grid. With whom? With the leadership. I’ve been going to Uzbekistan… At Masdar, we started our journey in Central Asia almost 20 years ago. Closed country. Regulation, policy doesn’t allow anybody. We left the country. We came back with a leadership that is open for a change. They did not only make change a reality, but also they’ve worked with the World Bank, they’ve worked with the IMF, they’ve worked with the EBRD. The first project in Uzbekistan that we commissioned, and the President commissioned in Uzbekistan, was a project [that] was done with IFC through what we call the Solar Scaling Program, 100 megawatts. We started with 100 megawatts. But imagine a country, all state, they don’t understand what is the need of bankability. When I am an investor, I go to the government, I go to the minister, I told them,” I need a Power Purchase Agreement that is bankable.” Tells me, “Okay, Mohamed, I sign a PPA with you? No problem. I sign a PPA with you.” But this PPA is not bankable. How do we work with the government? The key to a successful journey in our industry, to decarbonize the world, particularly in developing countries, is regulation, policy, and leadership.
[Pilita Clark] Which goes back to the point that you were making right at the start. Yeah, well, you’ve all been making that very clear. I just want to move on just in the interest of time. But I just think it really is a great point and great examples that you’ve just given there because I think people often miss that in this debate. Let’s look at another big issue here in Baku, and that is basically the negotiations on a new goal to channel climate finance from richer countries to poorer ones. That’s going to replace the 100 billion a year one when it runs out in 2025. Multilateral Development Banks were obviously key to eventually reaching that 100 billion dollars a year goal. They were really very important and made up a large chunk of that. In fact, climate finance from the key Multilateral Development Banks has more than tripled since 2013. Now, the World Bank and the EIB were today among the 10 MDBs that said that they were basically confident, I think is the right word to use, that you’re going to be able to ramp up climate finance to low and middle-income countries to 120 billion dollars a year by 2030. You also have an aim to mobilize 65 billion dollars from the private sector. Now, the 120 billion dollar a year figure, I think, is up from 75 billion dollars in 2023, correct? Okay, so it’s quite a jump, and that’s 75 billion dollars was up from around 60 odd billion dollars the year before. All going in the right direction. Just one question that I was getting besieged by on the way to this panel was, is the 65 billion in private finance that is hoped to be mobilized, is that an annual figure as well? Yes. Yeah, good. That’s what I thought. Now, the question everybody’s asking is, what does that mean for this new collective finance goal? Because it looks as though we’re talking about potentially 185 billion dollars a year by 2030, which people are saying, “Well, does that mean that 200 billion, maybe even 300 billion is potentially feasible?” The answer to which is I don’t know because, again, we’re expecting the MDBs to do a lot of the heavy lifting here. But what do you think? Help me out here. How should we understand these figures in relation to the overall climate finance goal that’s going to be agreed, we hope, here in Baku?
[Ajay Banga] I have no clue. You got to ask the people who are going to add up the number on top of that. This is just what the MDBs have put forward. I’m not going to speculate what the total comes to be. What we’re talking about is 120 billion, and that’s what we’re saying. The 65 billion of private capital mobilization is based on the way it works today. If all these things we are talking about, the five things that I talked about, actually come to fruition, that’s a different game altogether. But this is where everybody is working really hard to get to today. I don’t know what the bigger number will be, but this is what the MDBs as a system are happy to put forward as a way of showing that we are keen to make things happen.
[Nadia Calviño] Let me jump in here because there’s so much discussion, and we are right at the place where the discussion is about numbers. So, full respect, but we have this obsession of looking at the needs and talking about humongous numbers which are really inapprehensible by citizens. People don’t understand the billions and the trillions. I think we should get the motion going and think not only about the numbers, and it is important, and we will make this effort, European Investment Bank is one of the key players here, and we’re absolutely committed to ramp up our financial support. But it also is about effectiveness and working together as a system, and so we deliver more for every dollar that we invest in a country or a strategic project around the world. It is also about setting in motion the necessary changes in the rest of the economy. This was my point at the beginning, and I think you have very well illustrated what an energy revolution in full swing looks like. There is a change which is already happening around the world. We are on the right track. As Kristalina was saying, we need to accelerate, we need to stay the course, and accelerate if possible, but we’re on the right track. A lot of progress is being made, which we need to really pay tribute to and recognize. It cannot be summed up just by a number. I know this is very difficult for a journalist, but I would really urge all of us to look at the full picture and not just one number.
[Pilita Clark] I guess I would say it’s not just journalists. I mean, we’ve got a lot of countries here are saying that that number we’ve seen from various reports over many years now should be in the trillions. I guess this is what we’re seeing here. Kristalina, you’ve spent so many years in this field. I think we probably need to try to confide the discussion to what multilateral financial institutions can contribute, but I mean, how do you see it?
[Kristalina Georgieva] First, I agree with Ajay. It is a matter of accountability. We pledge to do this, hold us accountable. But I also see the rationale why there is a concentration on how much can we raise so there is predictability for emerging markets and developing economies, they can count on funding that can flow into transforming their own economies. Nadia is correct that there is a little bit too much of throwing numbers around that we got accustomed to. We have to be focused on who makes a pledge, hold them accountable, and then, it is the role of the negotiators to sum up all the pledges and say, “Here we are coming with whatever the number is going to be.” I have only one comment to make when we talk about these big numbers, to put them in perspective. And the perspective to me is the size of the world economy. We have over 100 trillion dollars GDP world economy. When we say we need 2 trillion, it is actually 2% of that size on one year basis. So yes, it is big, but it is doable. I’m always on, gear yourself that it can be done. Because when we are in the ditch of, “Oh, it’s so hard,” then that weakens our resolve. We actually don’t do as much as possibly we can. That’s my contribution. Get in the job of doing and then good things will happen.
[Ajay Banga] I would just say the trillions aren’t going to come from multilateral banks. That’s not going to happen. It has to be from that private sector. Don’t take the 65 billion that the multilateral banks are talking about as mobilizing as the total of the private sector. We cannot claim credit for every single private sector decision. There is going to be a ton of things that the private sector will do if the right environment exists. Let me walk you through an example which will explain the point. We said we’re going to reach 300 million people in Africa with energy by 2030 with the African Development Bank. Here’s how it’s going to happen. It takes 30 billion dollars of money from IDA, from the World Bank. It’ll take between 10 and 15 billion from the governments of the countries. They don’t have the fiscal space. But Kristalina has RST, SDRs. She and I are working together with them where she has a program with those countries, can she step in to encourage them to create the fiscal headroom with her ability to provide the financing to them so they put the money to work along with the project financing we do? In addition to that, we’re going to need about 15 billion of private sector investing in these very countries. That’s what that January-end summit is about, about the regulatory policy clearance to make it happen. It’s a mix of things. When you take a number by itself and you hold that on a pedestal, it’s just the wrong way. You have to look at this not just for the number, but also for the enablers that allow you to climb to the top of that pedestal. That’s what we are trying to create, the right circumstances and the right enablers for this to happen.
[Pilita Clark] Yeah. I mean, it’s a relatively new initiative that... What is it? Mission... [Ajay Banga] Mission 300. [Pilita Clark] Mission 300, yeah. Presumably, you’ve just started on that, I guess, but it is quite an ambitious goal that you’ve got. I mean, I think it’s… [Ajay Banga] You noticed. [Pilita Clark] Well, I’ll tell you why I think it’s really ambitious, because something… [Ajay Banga] It’s half the number of people in Africa who don’t have access to electricity today. [Pilita Clark] Right. [Ajay Banga] We’re talking about fixing it by 2030. That’s what people should be giving claps for, not the stuff about some number that somebody produces. [Pilita Clark] Yeah, I mean, well, just while we’re on Africa, and I realize that we’ve... Oh, no, we’ve got a bit of time left. Sorry, I thought we were getting close. Last year Fatih Birol from the International Energy Agency made this really telling observation about Africa, which is basically that there are more solar panels or more solar power capacity in Belgium, not a particularly sunny country, than there is in the whole continent of Africa, which is quite extraordinary. I guess to what extent is Mission 300 going to be addressing that enormous gap is my question to you, Ajay. Then I want to come on to everybody else. [Ajay Banga] I’m not in the business of addressing a gap between Belgium and Africa. I’m just not. No, that’s not correct. [Pilita Clark] I meant to the extent to which green energy projects are going to be part of that.
[Ajay Banga] As I said, the 300 million people we’re going to reach with this collection. The work that’s going on right now clearly establishes that a large part the work will require distributed solar energy to be installed. Not only are we installing that, we’ve got experience in doing it in a number of countries. I’ve visited distributed solar energy plants in Nigeria and other places. We know how to do this. We can get that done, but every time we put one of those up, we’re also going to put a cell phone tower. We connect the people to the internet while also connecting them to power, which I think is quite useful. In addition, money is going to have to go to fix the distribution lines and the utilities involved in these countries, because without that, you can’t make the progress that someone like him needs to make. That’s part of the money. That’s why we said 30 billion from IDA, 10 or 15 from the countries, and about 10 or 15 from private investors. That’s the combination that will work. Absolutely. But I don’t know if that will address the difference between Belgium and Africa.
[Pilita Clark] No, I’m just meaning that… That’s why I wanted to ask you, Mohamed, actually, because last year, you, Masdar, actually committed to mobilizing, I think it was about 10 billion dollars to unlock about 10 gigawatts of clean energy projects across Africa by 2030. I was just wondering, in the interim, I think that was at the Africa Climate Summit last year, but what progress are you making towards that aim?
[Mohamed Jameel Al Ramahi] Well, I mean, broadly, we are through our platform called Infinity Power Holding, which, by the way, EBRD is a shareholder, as well as the African Financial Corporation, we are the largest shareholder, we incubated this platform around 10 years ago. Today, we are, I would say, the largest or the second largest renewable energy platform across Africa. But let’s be clear. Everybody talks about money. I always say, and it’s true, because I’ve been developing renewable energy projects for 20 years, everywhere. Money is available when the opportunity is there. But let’s also put things into perspective. We are building power plants. We are building infrastructure projects. These are complicated, particularly in sub-Saharan Africa. There is no grid in sub-Saharan Africa, and some of these countries, they don’t have access to power because there is no infrastructure. You are absolutely right, sir. We need to invest in the infrastructure. Yes, this beautiful project that we all financed, C&I, solar home systems, most of them are already bankrupt because they are getting paid in local currency and they cannot fund their growth. They are poor villages, have no access to power. We are trying to provide them solutions. We thought it works. Honestly, we thought it works. It doesn’t really work, honestly. The only solution is to build the right infrastructure for the benefit of the continent of Africa so we can deploy renewables at scale and distribute these electrons and fuel the growth of these economies. It is extremely difficult. We’ve been in Africa for a long time and we still pledge more capital into Africa. But honestly, in some countries, we’ve been discussing, and this goes back to the leadership. I have access to the funds from the IFC, EBRD, Asian Development, African Development. One of our shareholders is the African Financial Corporation. They are willing to finance projects if projects exist and they are bankable, correct? We’ve been in some of these countries without referring to any countries. For four years, we are trying just to figure out where is the land. We will fund the environmental studies. We, Masdar, I don’t need any development fund. We will fund the feasibility studies. We will fund the grid assessment, if you like. Until now, we are trying to get somebody to leave from the office to come and to show us what land is appropriate. This is the reality on the ground. We have to also appreciate the complexity. The money is available. I can tell you the money is available from the private sector. We are there, and our partners are there.
[Pilita Clark] It really goes back to the points that all of you have been making about the need for regulatory certainty, about the need for climate policies, strong climate policies. Nothing basically happens, I guess, is the fundamental message that you’re having. But that’s easy to say and not necessarily all that easy to do, right?
[Kristalina Georgieva] And yet I can tell you that there are countries that are making really great progress. We are going to issue today a press release on Côte d’Ivoire, a country that has put in place over many years good policies and good institutions. Remember, Côte d'Ivoire had a civil war. So, it is possible, your point about leadership is so relevant. We have seen in Africa a number of countries recognizing that they have to be good on counts of institutions and policies, and then good things would happen. The question is, why not everywhere? When you look at the African continent, there are two very big problems. One is conflict. When you have a conflict in a place, investors would be very reluctant to come. The second one is, frankly, a history of corruption and bad management. I think we need to call it the way it is, and then shine the exalt examples that make a difference. Over the last years, we have had programs with 20 countries. In some of these countries, I am so joyful because I see what a difference it makes in the lives of people. I think that gathering, to just plainly say it, you can do better. Here are examples of that, and then get countries to follow. I think it is more precious than actually money. You have good policies, money is followed.
[Ajay Banga] That’s why those 15 energy compacts at the end of January, these are real. 15 countries are coming with their energy compact plans, which starts with the regulatory policy and predictability they’re going to provide. It’s going to be very important to do it systematically, building block by building block. Really important.
[Pilita Clark] Okay, we’re unfortunately, annoyingly out of time. But just before we go, we will, I’m sure, be assembling at COP30, and I’m pretty sure that I could say with some confidence that it’s very high likelihood that all four of you will be in Brazil next year as well. What’s the one thing that you would like, that you would hope to see that you’re not seeing now, but you hope that we might see in a year’s time in Brazil?
[Kristalina Georgieva] Closing the ambition’s gap. Be more ambitious because if you are not, we go to a place that I do not want to name, and it’s a bad place. Close the ambition gap.
[Ajay Banga] I’m very focused on hoping that between now and then we can sort out the voluntary carbon market in the sense of creating the right regulatory policy as a foundation for that voluntary carbon market to get going. I think the best way to really make money move from the developed world to the developing world in return for what they do is to have it move voluntarily. That market needs help with regulations, with clarity of purpose there. The Article 6 negotiations that are going on here are going to be mission critical to getting that done.
[Nadia Calviño] Well, I’d like to talk about something completely different so that I complement what they have been saying, which is technological innovation is making incredible breakthroughs. What I would like to see next year is that we can talk about real success stories that are revolutionary from the perspective of technological development, and that we can start to see the light because we keep talking about the challenges, but where are the opportunities and how are they really delivering to the benefit of the global community and humankind? I would like to have that positive story out there.
[Pilita Clark] Okay. [Mohamed Jameel Al Ramahi] I’m a very simple man, so we’ll go back to basics. Interconnectivity, infrastructure, grids, and tripling renewable energy. [Pilita Clark] Okay. All right. Well, thank you very much. Please, join me in thanking our wonderful panel. [Applause] [Pilita Clark] Thank you very much. [Music]
