World’s leading financial institutions to invest more than $400bn for Sustainable Development Goals
Group including EIB, IDB, World Bank and IMF will invest more than $400bn over the next three years to support the UNs SDGs
The world’s leading financial institutions will invest more than $400 billion over the next three years in climate and sustainability projects to help achieve the Sustainable Development Goals (SDGs).
Multilateral development banks (MDBs) including the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, World Bank Group along with the International Monetary Fund (IMF) announced their plans in the lead-up to the Third International Conference on Financing for Development in Addis Ababa, July 13-16.
The United Nations’ SDGs call for billions of dollars in support of official development assistance (ODA) and all available resources to attract, leverage and mobilise trillions in investments of all kinds—public and private, national and global.
ODA, estimated at $135 billion a year, provides a fundamental source of financing, especially in developing countries most vulnerable to the impacts of climate change.
MDB development finance has grown from $50 billion in 2001 to $127 billion in 2015 and for each dollar invested by its shareholders, MDBs are able to commit $2-5 in new financing each year.
The MDBs’ own direct private sector investments have increased fourfold over the same period and they mobilise an additional $2-5 in private investment for every dollar they invest directly in private sector operations.
The pledge to increase their contribution to more than $400 billion over the next three years also reflects efforts to make even better use of their balance sheets.
Additional steps to leverage more resources include the development of new approaches and tools to help developing countries play a stronger role in harnessing national resources.
The MDBs and the IMF are partnering with countries to introduce a new toolkit to assess and improve tax policies and expanding instruments such as e-procurement to achieve more efficient government spending.
Through their policy advice and technical assistance, the MDBs and IMF support nations in designing economic policies to achieve sustainability objectives; through MDB policy support loans and IMF-supported programmes, these institutions provide general financial support towards meeting budgetary and balance of payments needs.
Werner Hoyer, President of the EIB said: “Sharing technical and financial experience is crucial to successfully tackle climate change and ensure that sustainable development can benefit future generations. The European Investment Bank has worked closely with the other MDBs for many years to strengthen climate action, infrastructure and private sector investment that improves lives around the world. We share the firm commitment of the world’s public banks to further support investment in the years ahead that contributes to achieving the SDG’s by unlocking green growth, supporting transition to cleaner energy and fostering innovation.”
IDB President Luis Alberto Moreno said: “It’s essential for multilateral banks and the IMF to work closely with each other, as well as with governments and the private sector to mobilize the additional resources needed to achieve the Sustainable Development Goals. We all share the same goals, which include reducing poverty and inequality, promoting economic growth and productivity that creates well-paid jobs, improving social and physical infrastructure, pursuing sustainable energy policies, ensuring food security and protecting biodiversity, among other pressing challenges. The IDB’s recent decision to create a separate entity to deal exclusively with our private sector portfolio shows our commitment to tapping all possible sources of development funding.”
Christine Lagarde, IMF Managing Director said: “This year marks a once-in-a-generation opportunity for global development. The only way to seize it is through partnership. To go far, we must go together. The IMF—with its global membership and mandate to promote economic growth and stability—is a committed partner. In this pivotal year, we have targeted areas where providing additional support will have strong payoffs: we have just increased access to all our concessional loan facilities by a full 50 percent; we are set to expand our large program of support to developing countries in mobilizing domestic tax revenues; and we will deepen our policy engagement with countries on key development issues such as addressing infrastructure needs and promoting equity and inclusion.
World Bank Group President Jim Yong Kim said: “We must cast away the stereotypes of aid and think about development differently. It’s about creating opportunity for all, giving people an equal chance to succeed in life, and preparing the world to deal with the challenges of climate change and the next pandemic. We need trillions, not billions, of dollars to accomplish these goals, and the money will come from many sources: developing countries, private sector investment, donors, and international financial institutions. By working together, we can help people build better lives with good education, quality health care, clean water, and proper sanitation. Those investments in people will help end extreme poverty in just 15 years.”