Public finance: development banks and sustainable infrastructure
This work examines how to strengthen the architecture of public finance resources and institutions to deliver sustainable development and climate action at the scale required. Focus is placed on the central role of the international financial institutions in supporting the creation of an enabling environment for blended finance.
The programme seeks to raise policy ambitions around public finance for climate action, including in the multilateral development banks, climate finance funds and domestic resources, and promotes its use to leverage private finance to achieve action at scale.
Work focuses include
- Supporting international financial institutions, including multilateral development banks, to invest in sustainable infrastructure.
- The role of middle-income countries and new investment programmes in financing sustainable infrastructure, in particular the role of China through the Belt and Road Initiative.
- The development of a supportive policy environment for attracting finance for sustainable infrastructure investment and low-carbon development in developing countries.
Why is this work important?
Over the next 20 years the world economy, at current growth rates, will roughly double in size and investment in infrastructure will need to more than double. Around US$90 trillion-worth of investment by 2030 will be made. How this finance is allocated and how the infrastructure is built will determine if we are able to meet the climate change challenge – or if we are locked into a high-carbon growth path that risks long-term development.
Public finance resources are critical for infrastructure investment, with multilateral development institutions playing a key role. However, public finance alone will not be enough: it must be used to enable and direct private sector resources towards climate action.