The announcement came shortly before the start of the UN’s Conference on Climate Change COP24, yesterday in Katowice, where governments are set to finalize the implementation guidelines of the Paris Agreement to hold the global average temperature increase to as close as possible to 1.5C.
Members of the Green Bank Network have collectively closed transactions that are expected to mobilize $41 billion in public and private capital for green infrastructure projects around the globe, effectively meeting their goal of $40 billion by 2019.
Green banks are dedicated finance institutions created to work closely with the private sector to increase overall investment in clean energy and bring clean energy financing into the mainstream. This global group of financial institutions includes founding members Clean Energy Finance Corporation (Australia), Connecticut Green Bank (US), Green Finance Organisation (Japan), Malaysia Green Technology Corporation, NY Green Bank (US), and Green Investment Group (UK) and new member Rhode Island Infrastructure Bank (US). These organizations have appointed the Coalition for Green Capital and the Natural Resources Defense Council to manage the development of the network, with support from ClimateWorks foundation.
Members of the Green Bank Network are investing across the technology spectrum, including wind, utility and small-scale solar, energy efficiency, low-carbon transport, combined heat and power, anaerobic digesters, LED street lighting, geothermal and energy storage. This year so far total investments have reached $10 billion, taking the total value of project investments up to $40 billion.
Reed Hundt, CEO of the Coalition for Green Capital, said, “Meeting climate goals will require an unprecedented and immediate mobilization of capital. Accelerating the formation of Green Banks in emerging economies can provide critical capacity to take on risk and leverage private capital to support large-scale low-carbon investment and enable countries, cities and states to meet their climate goals.”
This network has been formed to foster collaboration and knowledge exchange and share some best practices. An analysis, prepared by the Secretariat of the Green Bank Network found that members are mobilizing as much as $10 in total investment for every one dollar of public capital invested in clean energy projects. These investments in return have resulted in decreasing 25 million metric tons of Carbon Dioxide emissions.
Douglass Sims, Director of Strategy and Finance at NRDC’s Center for Market Innovation, said, “Green banks are financial institutions that have sustainability and low carbon development written into their DNA, which makes them an ideal vehicle to help countries achieve their Paris Agreement commitments and sustainable development goals. From a relatively small capital base, the members of the Green Bank Network are demonstrating that innovative investing in renewable energy, energy efficiency and green infrastructure is good for the climate, economic development and the bottom line.”
The announcement was made at 6th Green Bank Congress held in Shanghai last week. Additionally, the group also announced that a new Climate Finance Facility has been formed in Southern Africa, a first-of-its-kind, path-breaking application of the Green Bank model, adapted for emerging market conditions and that supplemental effort to form new green banks are underway in diverse jurisdictions in Latin America, Africa, Asia, and Europe.
Ilmi Granoff, Director of Sustainable Finance at the ClimateWorks Foundation said, “It is fantastic to see a growing network of institutions, in both industrialized and emerging markets, demonstrating that entrepreneurial public capital with a low-carbon mission is fiscally efficient and an effective catalyst for growth in the low-carbon economy.”