GUARANTEES FOR CLIMATE FINANCE IN THE WORLD BANK-IMF AGENDA - Please join the Atlantic Council’s Global Energy Center and GeoEconomics Center for a discussion on mobilizing private investment in climate mitigation and adaptation in the Global South.

Speakers explore how public and private sector financial institutions can expand the use of guarantee instruments to accomplish this goal. They also examine the World Bank’s latest reforms to expand, streamline, and bring new tools to its guarantee offerings.

There is growing awareness that the use of guarantees is the best way to leverage public funds to bring in major private investors, though they have been used sparingly in the past by the World Bank and other development institutions. The G20’s Independent Experts Group report, Strengthening Multilateral Development Banks, published last summer called for the World Bank to substantially increase guarantee issuances and to expand the role of the Multilateral Investment Guarantee Agency, an international financial institution that provides guarantees against losses from political risk on certain investments in developing countries already backed by the domestic government.

At the G20 Finance Ministerial in Sao Paulo last month, the World Bank announced a major initiative to streamline and triple its guarantee offerings by 2030, to provide one-stop shopping (“one roof, one menu”) for guarantees, and to introduce “new tools” including the possible use of portfolio guarantee instruments. The question is: will it be enough? Developed countries have committed to mobilizing $100 billion per year toward climate action, but there is an urgent need to stimulate private funding by an order of magnitude greater than this pledge.

During this discussion, experts assess several existing proposals and recommendations, including the Emerging Markets Climate Investment Compact, on how innovative guarantee finance structures can be used to bring large institutional investors into new markets.

ORIGINAL AIRDATE: 03/11/2024