Public-private mix needed for large scale low carbon investments
- 06 April 2011
The discussion focused on the challenges and opportunities associated with raising private capital for low-carbon projects in developing countries at the scale needed to address climate change.
Minister Barker discussed his recently launched Capital Markets Climate Initiate (CMCI), which aims to catalyze investment from the private sector by demonstrating replicable low carbon projects in the developing world that show viable returns, build investor confidence, and create systemic learning about what is possible.
Participants, including over 20 private investors and asset managers, explored solutions for overcoming the current lack of large scale private investment, including the need for government involvement to help reduce the risk associated with unproven low carbon technologies and to create the conditions under which private capital can flow.
Participants agreed that successful financing models would require an innovative mix of government and business involvement, highlighting the importance of public-private partnerships in addressing this important challenge.
Amy Davidsen, US Executive Director, The Climate Group, said: “There remains a significant gap between the amount of private capital that is needed to help countries transition to a low carbon economy and the amount of capital that is actually available. Closing this gap will require work from the public, private, and NGO sectors to identify financing models that work, and then to replicate them around the world."
Evan Juska, Head of US Policy, The Climate Group said: “The international climate negotiations have acknowledged the need for private sector involvement in financing mechanisms like the Global Green Fund. But to date, too little attention has been paid to the question of how to actually get the private sector involved. The CMCI, with its focus on actual projects and its ability to create a high-level dialogue between investors and policymakers, is a promising start towards answering that question.”