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blended finance

Becoming part of a mainstream movement – blended finance in water and sanitation

Ivaylo Kolev's picture
Persuasion does not always involve an epiphany. Often, attitudes are formed and opinions are shaped by the steady accumulation of evidence and examples. And so, it has been for me when it comes to blended finance.
 
While anecdotes of transformation may be catchier, the gradual absorption of the work of experts and practitioners is frequently how one’s thinking evolves. I left the recent 2018 Global Water Summit not feeling transformed or possessed by the idea that blended finance is THE solution for bridging the humongous financial gap required to meet SDG6, but more convinced than ever it has a key role to play. I was also positively surprised that this financial solution is no longer an exotic stranger to our sector and that a significant number of water supply and sanitation (WSS) practitioners are implementing blended finance schemes.
Credit: World Economic Forum

Blended Finance: a key to achieve universal access to water supply and sanitation by 2030

Aileen Castro's picture



What does it take to finance sustainable water supply and sanitation? The World Bank Group takes this question very seriously indeed. That’s why during the recent Global Water Summit, the World Bank Group partnered with the organizer, Global Water Intelligence, to present the key concepts of Blended Finance to participants from all over the world.
 
But what is blended finance and why is the World Bank talking about it?

Lending a hand to transform the energy mix of an island nation

Kruskaia Sierra-Escalante's picture
 IFC
The BMR Jamaica Wind project, Jamaica’s largest private-sector renewable energy project. Photo: IFC


Last month, a new wind farm began spinning its blades in Jamaica. At 36 megawatts (MW) it became Jamaica’s largest private-sector renewable energy project, set to diversify the country’s energy matrix, reducing its high electricity prices and generating significant environmental and social benefits.

Stirred, not shaken: blended finance for climate action

Kruskaia Sierra-Escalante's picture
 Ivelina Taushanova / World Bank Group
Photo: Ivelina Taushanova / World Bank Group


Today, over 80 million tons of CO2 will be emitted from economies around the world. Tomorrow will be the same, as will the day after that. The emitted amounts of CO2 will likely stay in the atmosphere for hundreds, if not thousands of years, further compounding the challenges in reversing the current and expected effects of climate change.

This past December, in Paris, leaders of 195 nations of the world agreed that this trend must be reversed, signaling a historic turning point in the global fight against climate change. The Paris Agreement ratified a global consensus to limit the global average temperature rise to ‘well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.’ Developing nations were at the forefront of this agreement, with almost every one of them setting carbon reduction goals. While the public sector will play a major role in helping achieve the ambitious targets, the sheer volume of investment required to support low-carbon energy, transportation, and agriculture projects throughout the developing world leaves a gap of hundreds of billions of dollars that only the private sector is in a position to fill.

Climate finance: The public sector can't do this alone

Christian Grossmann's picture
A World Economic Forum event at COP20 brought together public and private sector leaders to discuss carbon pricing. Carlos Molina/World Bank
A discussion on carbon pricing at COP20 brought together executives from Unilever, pension fund AP4, and the BVRio Environmental Exchange, and officials from California, South Korea, and the World Bank Group. Carlos Molina/World Bank


​We’re doing a lot of talking and listening here at COP 20 in Lima about climate finance – how hundreds of billions of dollars were invested globally last year to clean up the air, get efficient energy to more people, make agriculture more productive, and build resilience to extreme weather events.

We all know and acknowledge much more still needs to be done – the International Energy Agency and others believe we need at least $1 trillion dollars of new investment each year to address climate change.

There’s no way that public money alone can meet that goal. We need to find ways to catalyze the limited public funds we have to unlock private investment. That, of course, means investors need to have the confidence that the right policies are in place to make long-term investments for the climate.