[Emcee]
National Incentives for Investing in Global Benefits. Please, welcome your host from Environmental Finance, Peter Cripps.
[Peter Cripps]
Right. Hello, everyone. Hello and a very warm welcome to this, as you’ve heard, solutions talk on National Incentives for Investing in Global Benefits. I’m delighted to moderate this important discussion today. We’re in a very cozy room, but we are actually being filmed. That means that we have an audience also via the World Bank Live and HSC on YouTube. Also, we have a small select audience in the room, and I think it’s important to point out that we will try and take some questions from the audience. We have a lot to discuss today, and just 45 minutes and four speakers, so we’ll try and get through a lot, but I would like to try and leave some time for questions at the end. Do pick your hand up, and I think we’ve got some roving mics. Just first of all, my name is Peter Cripps. I’m the editor of Environmental Finance. We’re a publication that’s been going for more than 25 years, believe it or not. We really write about the ways in which sustainable finance, environmental themes, the risks and the opportunities amid the transition to a low-carbon economy. We write about how that’s material for the private sector. We really write mainly about pension funds, insurers, asset managers. Today we have a panel on a development finance agenda. I’m a bit out of my comfort zone, to be honest with you, so I’ll do my best, but if you want to ask questions from the audience, you may well ask better ones than I do. The premise of this panel is that the world desperately needs investment in global public goods from climate resilience to pandemic preparedness. And yet countries naturally prioritize investments that deliver benefits to their own citizens, quite naturally. This creates a systemic underinvestment in the solutions that we need the most. So, today we’re going to explore innovative financing mechanisms that are changing this equation through the World Bank’s Framework for Financial Incentives, its Livable Planet Fund, and IDA’s new global and regional opportunities windows. Plenty of acronyms for us to try and unpack today. These aim to create real incentives for countries to implement projects with significant cross-border benefits. What we’re going to do, first of all, in just a second, is play you a video, and then I’m going to ask our four panelists to introduce themselves, and we’ll begin with the Q&A. Could we have, first of all, an introductory video, please?
[Video begins playing]
[Video Narrator]
Our planet is on life support. Climate, pandemics, food and water shortages, the hits keep coming. And if we don’t act, inaction equals collapse. No jobs, failing health, broken economies, our planet is in trouble. And here’s what compounds the problem. Every nation fights alone, prioritizing their crises. And we get it, governments have to put their people first. But these crises, they don’t care about borders, and they certainly won’t be stopping at customs. The solution must be global. Introducing the FFI, the Framework for Financial Incentives, the World Bank’s game changer to fund planet-sized solutions in developing nations. Global problems need global solutions with incentives. We’re talking billions in extra funding, longer repayment times, and discounted rates for cross-border wins. Just imagine, restore mangroves here, healthier oceans there, cleaner air everywhere. One project, infinite ripple effects. And some countries are already in. Tunisia is already winning, with 400 million dollars to flip its energy game. Renewables will go up, costs will go down, pollution will be out, and jobs will be in. In fact, 11 projects have kicked off, covering clean energy grids, wildlife havens, and food systems 2.0. Then don’t forget, we also have the Livable Planet Fund, a smart pot of money for big ideas. It turns impossible into mission accomplished with grants and rate cuts. And that’s not all for low-income countries. The IDA GROW,
[video cuts]
it’s opening wide. 15.5 billion dollars over three years to fund Southern regional integration. We are rolling. But here’s the kicker! Scale this now or watch the clock run out. The Hamburg Sustainability Conference is a chance to deliver. It is our shot. Back global action now! Score climate wins, economic muscle, and a livable planet for everyone. Because in today’s interconnected world, the best solutions transcend borders.
[Video ends]
[Peter Cripps]
Right. Well, that’s helped to set the scene for us a bit. First, let’s introduce our panel. Perhaps we could start to my left and work our way around. If you could, in less than a minute, all tell us your role in this space.
[Axel van Trotsenburg]
I’m Axel van Trotsenburg. I’m a Senior Managing Director at the World Bank. I’ve been there for 37 years. I’ve managed regions, finances, and currently, I have been in charge of the whole Knowledge Bank as well as the IDA, the fund for the poorest countries, the whole replenishment.
[Peter Cripps]
Would it be helpful just to quickly explain what that is?
[What]
that acronym stands for?
[Axel van Trotsenburg]
IDA?
[Peter Cripps]
Mm-hmm.
[Axel van Trotsenburg]
That is the International Development Association. It was created in 1960. That was a fund where we needed to provide for the poorest countries concessional resources. Concessional resources means less than market rate and much longer repayment periods like 40, 50, even 60 years. This is actually the second largest lack of the World Bank. We are replenishing these resources on a three-year basis. In the last round, we mobilized about 100 billion dollars. We get from the donors around 24 billion. The rest is leveraged through capital markets and repayments. So, it’s quite a lot. 70% of the resources go now to Africa. Previously, it was Asia
[that]
was the main beneficiary, but they no longer need all those resources.
[Peter Cripps]
Well, that’s actually quite useful for people like me who find the World Bank confusing, so thank you very much. Yeah, please, Mr. Situmbeko.
[Situmbeko Musokotwane]
Yeah, I’m Mr. Situmbeko Musokotwane. Minister of Finance and National Planning from Zambia. That is somewhere in Central Africa. I’m very delighted to participate in this because your question is, there’s some global challenge out there, what solution do you bring to the table? And as we progress, in the limited time that is available, there will be two specific proposals that I will make to some global problems.
[Peter Cripps]
Good. Well, I look forward to hearing those during the course of the next half an hour or so. Thank you. Go ahead.
[Johann Saathoff]
Yeah, I’m Johann Saathoff. I’m Parliamentary State Secretary of the Ministry of Economic Cooperation and Development. I’m a State Secretary for three weeks now, so I’m quite fresh at the moment, but I was a State Secretary in the Ministry of Interior before. Before that, I was an MP responsible for renewable energy, for example, in building up the energy grid and the renewable energy in Germany. I recognize that climate policy is not only a national policy, you have to think worldwide. I’m coming home to this Ministry, to my topics, to my heartfelt things I want to foster a little bit. Before I became an MP, I was a Mayor of my home municipality, which was a 13,000-soul community in the outer northwest of Germany, and very much linked to renewable energy onshore wind, PV on the rooftops, but as well a community where gas pipelines go through and so on and so on. That was basic. As being a Mayor, I knew that all politics is local. That means fighting against climate change as well as suffering from climate change. I think fighting against climate change and getting up, setting up the right financial framework is a better way than to suffer from it.
[Peter Cripps]
Yeah. Well, thanks for coming and speaking just three weeks into the job. It’s commendable. Thank you. Joyelle.
[Joyelle Trizia Clarke]
Joyelle
[Trizia]
Clarke. I’m from Saint Kitts and Nevis, and hopefully more persons know by now where that is. I’m the Minister of Sustainable Development, Environment, Climate Action, and Constituency Employment. While I’m not doing that, I find some time to work with Global Fund for Women and their Caribbean Climate Justice Program, which allows flexible grants to be passed to women-led groups working on climate justice.
[Peter Cripps]
Excellent. Thank you. Okay, so we were going to talk about these innovative new instruments. Axel, perhaps we could come to you first of all. Talk to us about the FFI, the Framework for Financial Incentives. What will that allow the World Bank to do, which it could not do before?
[Axel van Trotsenburg]
Just to explain to everybody, we are providing to middle-income countries, basically market-related terms, and then to the poorest countries, IDA, which is very large. Now, for the middle-income countries, we talked about the global challenges and the global public goods like on climate change, like on health prevention, particularly pandemic prevention. You will need resources. First of all, it’s always also with the multilateral resources. This Framework for Financial Incentive doesn’t solve that. There are other measures, so you need quantity, but you need also what are the conditions. One of the challenges for middle-income countries is that they don’t get actually grants or they don’t get concessional financing, largely also because governments don’t have unlimited resources, the poorest countries. So, that’s an issue. Therefore, what we have been looking at, what can you do with this financial framework? So, first of all, we are pushing for quantity. That is what they need. Secondly, a condition. That can be that you lengthen the repayment periods. Normally, they are much shorter index, but now we can get up to 50 years even for middle-income countries. The other thing, what we are trying to do is to get actually concessional resources in there. There are what we mentioned, the Livable Planet Fund, where we would like to see, can we actually get some concessionality so that you can actually grease this and that makes it more interesting for governments also to undertake these investments. So, the ideas have existed, but what is missing is, do we actually have the resources? Can you also, within your own financial framework, try to do some of those things? There are additional things that we have been trying to do, for example, expanding the guarantees system, and that may also be interested for the investments. This is one part that is largely focused on the middle-income countries, a huge amount to do. I’m arguing, actually, when we are looking at the concessional, we don’t mix very well different funds. There is the World Bank or other multilateral institutions that provide quantity, but there are also
[others]
like the Green Climate Fund, which is a financial intermediary fund. That got actually a lot of resources. How can you more smartly connect that? That is where then actually these countries could also make investments at scale. In the other areas is for the low-income countries. There we have more flexibilities, that can be grants, that can be, in general, long-term financing, 40, 50 years. You have there more flexibility, and the interest rate is usually zero. That helps the poorest countries to benefit also from those resources.
[Peter Cripps]
It sounds like the financial terms are improved, but if I’ve understood correctly, there’s this concept of global public good, which is trying to encourage less on the national side of things, but more...
[Axel van Trotsenburg]
No, I think there remains a global responsibility. You already alluded that this is not something that this is a system, “Okay, now we’ll do that ourselves.” Therefore, other governments don’t need to do something. No. It is basically all governments are unfortunately under stress, but also the global public goods agenda is under stress because the financing is missing. Therefore, you need to think, can we actually create some incentive frameworks that can actually allow these governments to do it? If you look at it, there was the example of Tunisia. They have actually severe economic challenges right now, also fiscal challenges. Within that framework, everything being equal, they wouldn’t undertake these investments. Then, can you actually bring some more incentives in there so that they can make that compatible with a rather difficult fiscal situation? There comes this framework into play.
[Peter Cripps]
Okay, yeah, thank you. Johann, if I could turn to you. Why is this agenda important from Germany’s perspective?
[Johann Saathoff]
I think it’s very important to have a broader approach and the possibility of financing climate action for at least all countries in the world, but at least for the countries who are not able to do it without the World Bank. So, Germany was convinced to support this project of the World Bank, and we’re very happy with it, that it is possible to set up a broader approach. Saying that means that not only finance structure is one of the hindering points of building up renewable infrastructure, of course, but it’s one of the crucial points. We’re quite happy that the World Bank makes it possible that these countries can join from the benefits. On the other hand, we have to focus all the other things, companies, and countries are dealing with when it comes to climate action plans or renewable energies, which means a safe access to the electricity grid. If you’re producing electricity, for example, feed-in tariffs which are sure for at least the next decade, I would say so, otherwise you wouldn’t be able to finance all the things and so on and so on. There are lots of things we are focused on from the German government. One of the major points hindering renewable projects was financing, and that’s one of the steps helping companies and countries in financing renewable action.
[Peter Cripps]
Presumably, a renewable project would have come under the remit of something which is good for the national benefit rather than the public good. What would it be an example of projects which would fall under that public good? Would it be like a mangrove restoration project or…?
[Axel van Trotsenburg]
Yeah, or we have right now a huge project together with the African Development, where we try to get 300 million people in Africa access to energy, and that will be largely through renewable investments. And so, what you want to combine is, first of all, facilitate this access when you know that 600 million Africans still don’t have access, we will need to work at scale and then combine that, of course, with smart investments, and particularly if that can be through a climate-smart investment like renewables, then it’s even better. Then you facilitate the access to energy and you have it also on a renewable basis.
[Peter Cripps]
So, the cross-border part is maybe they’re like regional grids rather than on a national?
[Axel van Trotsenburg]
That would be absolutely with a regional grid. Yeah, absolutely.
[Peter Cripps]
Okay, good. That’s interesting. Thank you. Minister Musokotwane, perhaps I could turn to you next. How is your government working with the idea to design projects that explicitly link national goals as energy security to regional stability?
[Situmbeko Musokotwane]
Thank you. I think... Let me start off putting it in the broader context, as you said. One of the challenges facing the Earth is how do we decarbonize it. To decarbonize the Earth, of course, lowering the temperature, you require the critical minerals. We have the critical minerals in substantial quantities, mostly copper. For us, our contribution to decarbonizing the Earth is to produce more and more copper, but to do that, you need investment. Part of the money, of course, is for public infrastructure. Some of it, we may have to go to public institutions such as our friends in the World Bank, but most of it is actually private sector money. Our contribution there, for this problem is to make the conditions attractive in the country so that private sector money through private investments can come through. That will lead to the increase in the copper production from the less than a million tons now to our ambition of 3 million tons in the next 10 years or something like that. It is not necessarily about public money. It is about creating the conditions for the private sector to thrive. This is where we have been collaborating with our colleagues in the World Bank to see what we can do to create the ecosystem that is attractive for private sector money. I must say that with the discussions and the dialog that is taking place, we’ve made lots of good progress. We have private companies coming in in droves to look for the copper. In the last two years, we’ve seen the production coming from 707,000 tons. This year, we are looking at about a million tons. Those incentives are working. Why are they important? It’s important to decarbonize the Earth, but we’re also saying that to get this large production possible to the markets, we need the infrastructure. This is where I believe working together with our colleagues, the European Union, we are talking about the Lobito railway corridor from the part of Africa where we are, Central Africa, to the West Coast in Angola for the West hemisphere market. There’s another railway corridor on the east to the Eastern hemisphere. That is happening, and we hope that, again, using more or less private money, we can get an opportunity to work with the European Union, African Development Bank, and the European Bank, and others to make this into a reality. Decarbonizing the Earth, that’s our solution. Secondly, we have the problem, or you have the problem here in Europe, of illegal migrants. It is a problem for all of us. What is our solution? Our solution is to ask you, colleagues in the West, to do more value addition in Africa. This copper production in Africa is taking place. Some of the costs will go wrong, but as much as possible, there must be value addition in Africa. For us, these colleagues, the Germans, they have car factories in South Africa, BMW, Volkswagen, and Mercedes. You have factories in South Africa which export all over the world. You are telling them to produce electric cars. What is an electric car? Copper. Because the engine is a motor. So surely it would make economic sense to do more of those engines through value addition of one type or another within Zambia, Congo, DRC. Shift the components in your factory in South Africa, value addition takes place. Why is value addition important? Because you need to create jobs. You need to create a middle class in Africa. If we don’t create that middle class in Africa, I’m afraid those who want to swim, come across the Mediterranean and look for jobs here, you’ll find it tough to deal with that. I think those are two concrete solutions that we’re putting on the table to help with decarbonizing, help with illegal immigration.
[Peter Cripps]
That’s fascinating. Thank you. With regards to the first example, the private money is coming in for the mining, but you need help with the infrastructure to deal with the actual goods produced. The second one, just to help me understand, when you say value addition, what do you mean? Because the jobs are already being created. What is it in particular that you’re asking for?
[Situmbeko Musokotwane]
The jobs are already being created, yes, but remember, the mining of today is different from the mining of 20, 30 years ago. It is going high tech, so the labor requirements have reduced. Therefore, labor absorption can no longer just be restricted to the mining. Labor addition, labor absorption must also take the form of value addition of one type for another. This is why it becomes important to do some value addition. No one is going to force you to do something in value addition that doesn’t make economic sense. It must make economic sense. But we also believe that the opportunities are there, and we must exploit those opportunities so that we can solve the problem at hand.
[Peter Cripps]
Are you talking about bringing more manufacturing in-house?
[Situmbeko Musokotwane]
Absolutely.
[Peter Cripps]
Okay. Yeah. Okay, that’s really interesting. Thank you. Joyelle, to turn to you. A similar question, really. What incentive from additional IBRD volume, long tenets, that kind of thing, would you need to encourage you to do more projects?
[Joyelle Trizia Clarke]
Great. Thank you for that question. I’ll start by providing some context for a small island developing state. Let’s say we have 1 dollar, and it’s a tourism dollar because that’s where most of our monies come from. We have to decide if we’re going to spend 75 cents of that dollar on health and social protection and housing and paying our employees, or if we’re going to split it in half and work towards a project that has some global good. The decision is difficult when you don’t have excess capital to invest. For us, the incentives would have to be around the financing whether or not Saint Kitts, even though Saint Kitts and Nevis is described as a middle, high-income country, it’s not really the reality on the ground, is it? It’s not. We have a few high-income economic citizens that make our GDP seem high, our per capita seem high, but the reality on the ground is that we have to deal with poverty. We have a serious percentage of our budget is in social protection, and we have to transition not just our economy, but we have to be more climate resilient. To do that, we need faster access to green financing. We need some risk-sharing mechanisms. We need to ensure that there is co-financing and grant-based financing, concessional financing. Oftentimes, we sit in meetings and we hear, “There’s funding available, but not for St. Kitts and Nevis, not for Antigua and Barbuda, not for Barbados.” And that’s a problem, and we understand that the challenge is how we assess vulnerabilities. And that’s why our CARICOM leaders are pushing for the adoption of the MVI, look at our vulnerabilities more holistically, but also at our assets.
[Peter Cripps]
What does that mean?
[Joyelle Trizia Clarke]
Multidimensional Vulnerability Index, which it uses more than just the GDP as an indicator of your status. We also expect that when you provide that co-financing, that it has to come with results-based financing. So, there are times when persons say, “The smaller islands can’t absorb the capital, you can’t absorb the financing.” Then embed your experts in our systems, not like, come for two weeks and, “Hi, how are you?” “What’s this project?” Six months, two years. Stay with the country. Ensure that the systems are in place so that the financing that’s provided for us works. And that’s why I really appreciate your commentary and this FFI framework because it means that Saint Kitts and Nevis could finally access financing to transform our economy and then more readily say, we’re ready to do a project that has global benefit.
[Peter Cripps]
That’s really interesting. Thank you. So, if I understand correctly, the problem is your categorization.
[Joyelle Trizia Clarke]
It’s a challenge.
[Axel van Trotsenburg]
That’s a really serious problem for island countries, that most people don’t understand that the GDP per capita is not a relevant measure or it gives the wrong impression. Many of the countries look like upper middle-income countries. Barbados has 22,000 per capita, but if you visit Barbados, that is not the reality. That is one of the problems. We have been trying to deal, particularly in the Pacific, we have made all the countries IDA eligible. We’ve been trying to do that also with a certain number of countries in the Caribbean, but not everybody is accepting from the donors that other countries could be IDA eligible. That is a problem for these countries because they are hit regularly by hurricanes or typhoons. Then the damage is not half a percentage of GDP. You talk about 10% to 50%, 60% of GDP in damages. That has, of course, huge consequences on the debt situation, so they get into a vicious circle.
[Peter Cripps]
That’s a very good point about the physical impacts of climate change. Does adaptation or resilience fall under the eligible project categories?
[Axel van Trotsenburg]
Absolutely. In general, we have been doubling our climate finance. We’re now at around 42 billion dollars, about 45% of total commitments that we’re making. I think we will have to continue that. What we hope is that everybody continues this. What is a big problem is that there is a lot of withdrawal. You saw that also in the club now with many private enterprises all of a sudden no longer being interested in this, and these investments are absolutely needed. We need to work much, much harder on the adaptation agenda. I think certainly for the low-income countries, we’re getting to the 50-50, but I think we need collectively to make sure that this is also done for the middle-income countries, and that is still a big challenge. And on the private sector side, what you’re seeing is the private sector tends to be more in the mitigation.
[Joyelle Trizia Clarke]
Yeah. And that’s a challenge as well. We want to commit to greenhouse gas emissions, but we have roads that need fixing. We have countries like Dominica experience 110% GDP loss due to a hurricane.
[Axel van Trotsenburg]
They go to IDA.
[Joyelle Trizia Clarke]
Yes. We want that to be a more holistic approach for the Caribbean. If we’re going to really focus on mitigation projects, global projects.
[Peter Cripps]
Well, I’ll turn to questions from the audience in just a minute, but perhaps I could just come back to you quickly. You mentioned a problem of accessing capital. What projects would you hope to get off the ground if you could access it?
[Joyelle Trizia Clarke]
I’ll use our Minister of Energy’s statement, and he makes it all the time. For us, we’re a fossil fuel-based economy. If we’re going to transition, we need to solve energy. So, we need renewables. We have geothermal reserves on Nevis that can power Saint Kitts and Nevis, and all the neighboring islands up to Puerto Rico. Now, if we’re going to do that, we need to connect Saint Kitts and Nevis via on-the-sea cable and then we need to upgrade the grid, and we need to connect all the households. Now, if we do that, we can solve water because we can also provide water through desalination, through the geothermal reserves. And then, we can solve food because one of our major challenges is we are a water-scared country. And then, of course, it means that manufacturing, just like you mentioned, would be better because the cost of power is less. More jobs, more livelihoods. And that cycle is what’s needed for Saint Kitts and Nevis, but it needs a serious injection of concessional financing for geothermal energy in the billions. And we don’t have that. So, we need private money, private sector money. We need the World Bank’s financing, and of course, the government’s commitment.
[Peter Cripps]
You said in the billions, can you put a finger on how much it would all...
[Joyelle Trizia Clarke]
Billions, experts would say it, but so far, we’ve gotten commitments from the Green Climate Fund, 17 million for production wells, and of course, the Caribbean Development Bank, and the GCF had a regional dialog in Saint Kitts just in March, and the Executive Director was there, and she visited Nevis, the geothermal plant, and made another commitment, 35 million once we have the framework to absorb the fund. That’s just the beginning of that transition, and that’s a 10-year transition, but billions.
[Peter Cripps]
Okay. I have other questions, but I would like to offer the opportunity. Does anyone else want to put a hand up? I think we have some roving. I think there’s a question here. Any others at all?
[Axel van Trotsenburg]
One behind you.
[Peter Cripps]
Oh, and one here as well. Yeah, there’s a couple of questions. If you could say who you are as well, if that’s all right before you.
[Pilar Hernández]
Absolutely. Thank you very much for the discussion. I’m really enjoying it. I’m Pilar Hernández. I work for the Sormas Foundation. We have been talking about public goods in general, as for example, the understanding of natural resources, mangroves have been mentioned, energy and so on, but I would like to ask a question. Well, yeah, a question addressed to anyone who wants to respond. We work with digital public goods. There is a number of organizations that are working very hard to make digital tools available for anyone. In our case, we work with a tool that it’s open source on purpose so that anyone can access it. In different topics, we work with disease surveillance, but there are many others. But the problem is that there is not enough awareness. When these organizations working with digital public goods developing and maintaining, we search for funding, there is either not enough awareness or not enough understanding. My question to anyone who wants to respond is, is there anything like digital public goods funding in the agendas? Has this been considered? Yeah.
[Peter Cripps]
Well, you mentioned not enough awareness. That includes me. What is a digital public good? Can we, first of all, describe that?
[Pilar Hernández]
So, digital public goods are basically digital tools that are made available. Usually, they fulfill some criteria. Some of these criteria are that they are open source, of course, so that organizations do not to pay licenses for using them. They have a community approach, they are scalable, and they contribute to sustainable development goals. That’s basically a very rough definition. We see that there is no awareness of that anymore.
[Axel van Trotsenburg]
No, our concerns were so big that we actually created a digital VPU, a Vice-Presidency, to deal precisely for this. There is a huge concern about the digital divide. If you are looking at Internet access between a low-income country and a high-income, that is huge. If that is not enough, these countries also risk an AI divide, and so they may risk to fall completely behind. We have actually quite a bit of programs that can be digital government, e-commerce, digital IDs, where we are supporting it, but digital is now getting in every area on this. We are looking at this. It can be digital infrastructure, it can be also digital services. Then, of course, clearly, how you get also the private sector because here there could be private sector activity. We are certainly quite supportive on it. What I would say is there are enormous competing demands, and in this is an area where you indeed could mobilize much more the private sector.
[Pilar Hernández]
Thank you very much.
[Peter Cripps]
Any other thoughts on digital public good?
[Johann Saathoff]
May I add one thought to this because it’s focused on the digital resilience of the countries, too, which is a topic I had to deal with when I was State Secretary in the Ministry of Interior, because we wanted to know where are all the data of our municipalities, 11,000 in Germany, are going to. How do we deal with it in a situation where we don’t know... Let me say it politely, where the ties between two countries sometimes strengthen, sometimes loosen. In this situation, which is getting more and more uncertain, it’s very important to have a strategic digital resilience in your own country. Of course, it’s the main task of the government of a country on the one hand, but if it is not possible to realize somehow, and there are lots of products which are open source, which is absolutely inevitable, we have to find a solution how to get in finance it. You may be right that there is not enough awareness because we are always thinking about, “Oh, wow, how can we save CO2 or whatever?” But digital resilience is for a country a crucial point, and every country has to find good solutions for their own digital resilience.
[Peter Cripps]
Great. Thank you. There was a question over here if the microphone could find its way there.
[Colincia Levine]
Good afternoon. I am Colincia Levine. I am the Permanent Secretary at the Ministry of Environment, Climate Action, and Constituency and Parliament with the Honorable Dr. Joyelle Clarke. My question is for the World Bank, and the presentation made was extremely compelling and very much in line with the thematic focus of the conference thus far. It’s very hopeful. So, I am here, and I would like to know, when this session is over, how can we engage the World Bank towards accessing these facilities? Is it that we can engage? Is there an email, a phone number, or is it
[that]
the World Bank is the one who assesses the landscape and then makes a connection? How do we make your presentation real for Saint Kitts and Nevis?
[Axel van Trotsenburg]
We have, of course, a whole Latin American region. We haven’t a department only for the Caribbean. The country director is based in Jamaica. They are in contact with the individual governments, and it depends on how many requests are coming. I am not aware that you have been taking much money from the Bank on this. Barbados, for example, left actually the borrowing from the Bank. They just came back two years ago. It depends also on that engagement with the World Bank to deal with it. These are countries that are eligible for borrowing. My suggestion is you would talk with the Country Director, what are actually the programs if you want to reactivate on the program. Then, I just want to point to manage expectations a little bit. The billions of dollars, everybody needs billions. The problem is that we are all short of money. Despite the fact that you are dealing, for example, 100 billion for IDA, that is an enormous amount, but there are 78 countries that are benefiting from this, and we need to keep that in mind. I just want to say that in many areas, the island countries, they will get substantial allocations on a per capita basis. We’re looking at that as well, but I would certainly suggest to be in touch with them and see also what your plans are.
[Peter Cripps]
Thank you. There was another question just here.
[Monika Froehler]
Hello, hi. I’m CEO of the Ban Ki-moon Centre for Global Citizens. My name is Monika Froehler, and thank you very much for this interesting discussion. Your Excellency, Minister, I do have a question for you. Zambia was hit by massive droughts in the year 2023 and 2024, and the ripple effects can still be felt adversely. Particularly hard hit are the smallholder farmers, so the agricultural sector in your country. And only 0.8% of climate finance goes to smallholder farmers. So, now you are in the presence of Germany and the World Bank. What would be your appeal to donor countries, how they can actually invest better into the agricultural sector for adaptation purposes?
[Peter Cripps]
That’s our three-minute warning. We’ll take this question, and then I’ll ask everyone just to give their final closing thoughts afterwards.
[Situmbeko Musokotwane]
Yeah, thank you very much for that question. I think our approach is indeed to look at our colleagues from the World Bank who provided us with a lot of support. I think the challenge is much more about how would we narrow down to the priorities given these changes that are taking place so that catastrophes like the one you’re talking about are focused. Finally, I want to say that the reality today is that cheap public money is getting less and less, so we have to find ways of how we can draw in the private sector where appropriate. Let me stop here since there’s a little time left.
[Peter Cripps]
Yeah, we do have little. I’m just going to quickly whiz around and ask for any final thoughts in the last two minutes. Perhaps we could start with you, Joyelle.
[Joyelle Trizia Clarke]
I think it’s important to end by saying that. if we’re going to bridge the gap between national action and global goods, SIDS, in particular, we need access. We don’t lack ambition, we lack access to financing, and we appreciate the framework that’s presented by the World Bank because it means there’s hope and we can do things.
[Peter Cripps]
Wonderful. Thanks very much for that, Joyelle. Johann?
[Johann Saathoff]
Yeah, I want to put a point in. I discussed the discussion before, which is looking on the situation in Germany. We had, 30 years ago, only a few producers of energy. Now, we have hundreds of thousands of producers of energy. What does that mean? That means that the energy sector is somehow democratized. That is a very important point, not only saving CO2 and building up infrastructure for the people, but to get people involved in the function of a state is a very big point.
[Peter Cripps]
Thank you very much. Situmbeko.
[Situmbeko Musokotwane]
Yeah, the first point is to agree with what my colleague has said. In Zambia, we’ve had a lot of energy reforms, which include the fact that now you can put solar, and if you are producing excess, you can sell it to the grid, and that is helping to, as you said, democratize the energy. But my final point is, I talked about value addition earlier on. There is sometimes a fear in Europe that this will take away jobs from Europe. The opposite will happen because when incomes rise in Africa, in the poor countries, they’ll be able to buy more from you. For today, we can only watch nice cars, but we can’t pay for them. If there’s absolutely no fear to say because there will be some value addition, their jobs will be lost, the opposite will happen. Thank you.
[Peter Cripps]
Wonderful. Very quickly, Axel, and then we’ll--
[Axel van Trotsenburg]
I think this should be once a topic here for a Hamburg Conference is how to put manufacturing in Africa. It is simply unacceptably low and there are huge opportunities. If you are looking at the demographic trends, this is absolutely what needs to be considered. I think what we are pointing out is, there are frameworks of what the Bank can do, but it has to go beyond the Bank. We need enormous amount of money, and that includes a lot of private money. Every institution should look, can we actually do better in terms of responding to the needs on this? That may be some concessionality, but ultimately, we need to undertake these investments. That requires that everybody stays engaged. I think there we need to be joined on this because there are enough forces that want to chicken out of this. We need to basically stay engaged, invest, and have a long-term commitment. That is what the Bank is trying to do, and we will stay committed to it, but we cannot do it alone. It has to be in concert with others, other multilaterals, other bilaterals, and the private sector. Then, you may have a fighting chance.
[Peter Cripps]
Well, they’re very strict on timekeeping here, so I’d better wrap it up there, but I’m sure a panelist will hang around afterwards to answer any questions we didn’t have time for. Can you please help me to thank the panel?
[Applause]
