The New Financial Pact Summit private sector recommendations called for the mainstreaming of Institutional Investor-Public Partnerships (IIPPs) in its recommendations to mobilize private capital at scale, to close the financing and investment gap in emerging markets and developing countries (EMDCs).
IIPPs are innovative infrastructure investment partnerships between a government and an institutional investor or investors, to mobilize private capital at scale and deploy that capital at speed in respect of climate-focused infrastructure investment programmes and projects to deliver a country’s NDC and SDG commitments.
The recommendation(s) specifically called for the mainstreaming of the use of Institutional Investor-Public Partnerships (IIPP) Legal Regulatory Framework, noting the Institutional Investor-Public Partnerships (IIPP) Legal and Regulatory Framework (launched by the African Union, the African Green Infrastructure Investment Bank and global institutional investors at COP27) provides the framework to deliver greater public-private climate finance alignment and creates more catalytic private investment and blended finance models and pathways to significantly fast track, scale, and de-risk private capitals’ participation in the green and fair transition.
The New Financial Pact Summit championed and hosted by the President of France, H. E. Emmanuel Macron, convened Heads of State and Government, Heads of Multilateral Development Bank (MDBs), Heads of International Organizations, and hundreds of civil society, private sector and investment leaders, to transform the world’s financial system through the curation of a new financial pact, which equitably redefines the mandates of Multilateral Development Banks (MDBs) to better deliver the mobilisation of private climate capital at scale, green infrastructure and finance solutions related to debt for emerging markets and developing counties (EMDCs).
The Summit’s website stated that to rebuild credibility in the international system, we need a new pact that offers a level playing field, shares the burden of climate change, and builds prosperity and security for every country. The New Global Financing Pact will help define the principles and steps needed to reform the financial system and to combat the high levels of debt that tie governments’ hands when they come to implement ambitious climate action to reduce the climate, economic and technological gaps that threaten to divide up our world.
The Public Private Partnerships (PPP) legal and regulatory architecture is, in its current form, incapable of delivering the demands and needs of NetZero targets, in terms of capital formation at scale, and accelerated capital deployment – fostered through fast tracked procurement, and an unprecedented acceleration of financial close (rate and volume), for bankable and investable green public and private infrastructure projects and programmes.
The International Energy Agency (IEA) states that fostering the financial conditions for a rapid deployment of clean energy in emerging markets and developing countries, and the creation of new regulatory frameworks that will allow for the mobilisation and deployment of private capital at scale and at speed, is one of the defining challenges of our time.
Speaking at the Summit, Dr Hubert Danso, CEO and Chairman of Africa investor (Ai) Group and Member of President Macron’s Private Sector Task Force, welcomed the call for the mainstreaming of IIPPs, stating that there is no single NetZero Pathway to address a Just energy transition, the SDGs, and the Paris Agreement’s multi trillion-dollar financing gap for emerging markets and developing countries (EMDCs), without exponentially increasing the scale and speed of global institutional investor allocations (representing over $150trn) that can be deployed and perform at the project level.
Dr Danso went on to say,
“There is no question we need to urgently mainstream Institutional Investor-Public Partnerships (IIPPs), to make mobilizing private capital at scale for emerging markets and developing countries the expectation and not the exception.”
Heads of State and investment leaders will advance the implementation of The New Financial Pact Summit recommendations, at the Africa Climate Action Summit, championed by the President of Kenya H.E. President William Ruto, which will be hosted by the government of Kenya in Nairobi Kenya on the 4th-6th of September 2023 on the road to COP28 in the UAE.
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