UK's Green Finance Institute and US NGOs to develop Green Bank Design Platform in order to help governments set up financial vehicles to support climate and environmental solutions
The UK's Green Finance Institute has teamed up with US environmental groups the Natural Resources Defense Council (NRDC) and the Rocky Mountain Institute in a bid to help governments attract private investment for low-carbon, climate-resilient solutions by establishing green banks.
As with the UK's former Green Investment Bank - which was initially set up in 2012 a the first institution of its kind in the world, before being sold off to the private sector five years later - green banks are specialised public finance institutions, or separately managed facilities, which act as the focal point for scaling up domestic investment in climate solutions. Such vehicles have since slowly gained further interest globally, as they are seen as a useful means of de-risking green infrastructure such as renewable energy projects in order to mobilise private investment into green economy solutions.
Yet national green banks remain realtively rare, however, and the three organisations have therefore announced plans this week to develop a Green Bank Design Platform, which is aimed at supporting governments and institutions around the world in setting up green banks and financing vehicles in support of shifting to a low carbon economy.
In order to initially identify the finance, technology and policy requirements needed to expand the use of green banks globally, a comprehensive review of the current global impact of green banks across 34 countries is planned as part of the project, the results of which are earmarked for relaease in an upcoming State of Green Banks 2020 report in November, the organisations said.
The findings will then be used to help inform the development of the Green Bank Design Platform, they explained, in order to help governments around the world identify the challenges in setting up green financial vehicles in both emerging and developed markets, and to map out the skills required to support the successful formation of green banks. Funding for the initial review and platform development is being provided by the ClimateWorks Foundation.
"Green banks have a track record of accelerating low-carbon, climate-resilient development, and are especially well-positioned to drive green recovery programs," said Paul Bodnar, managing director at the Rocky Mountain Institute. "It is no surprise that so many countries are actively pursuing the model, which is why we are exploring a forum that would connect them with the expertise, best practices, and capital sources to succeed."
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