GGGI Side Event At the Asian Development Bank Annual Meeting: Green Growth and Regional Cooperation

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May 2 2018 - What: The Global Green Growth Institute (GGGI) will hold a knowledge sharing side event during the 51st Annual Meeting of the Asian Development Bank (ADB) in Manila that will look at opportunities and challenges in mainstreaming green growth. The side event will also look at enabling policies for regional cooperation for inclusive and sustainable growth, green investment and eradicating poverty. China’s Belt and Road Initiative is an example of how regional infrastructure initiatives can be used to pursue the United Nations 2030 Agenda for Sustainable Development.

Where:

ADB Lecture Theater 1

Asian Development Bank Headquarters

6 ADB Avenue, Mandaluyong City

Philippines

When: May 4, 2018 at 10:30-12:00

Who:

Dr. Frank Rijsberman, Director-General, GGGI

Mr. Ayumi Konishi, Senior Advisor to the President, Asian Development Bank

Ms. Guo Dongmei, China ASEAN SCO Center for Environmental Cooperation

Mr. Winston Chow, Country Representative for China, GGGI

Mr. Suki Atwal, Country Representative for the Philippines, GGGI

Mr. Pierre Amilhat, European Commission Director for Asia, Central Asia, Middle East/Gulf, and Pacific

Mr. Robert Guild, Chief Sector Officer, Sustainable Development and Climate Change Department, ADB

Other Speakers TBC

Officially launched in May 2016 at the first Belt and Road Forum in Beijing, China aims to invest USD150 Billion in the next 5 years to support projects which will help address significant regional infrastructure gaps in agriculture, water management, electric power, communications, and transport of the countries along the Belt and Road Initiative (BRI) route. GGGI supports China’s commitment to align the objectives of the Initiative with the development goals of the United Nations 2030 Agenda for Sustainable Development.

Background

GGGI and ADB

Collaboration between GGGI and the Asian Development Bank  are aimed at unlocking financing for sustainable green growth projects. In Mongolia GGGI and ADB partnered to assist the country to meet its National Green Development Policy objectives.

What is crucial in these partnerships is that they champion green growth pathways by identifying areas of intervention in countries and how to replicate those at local, provincial, national and regional level.

Belt and Road Initiative

Regional cooperation and integration (RCI) deepens connections among the national economies. Trends in the Asia region have shown that RCI yields positive benefits for the countries involved.

The growth of intraregional supply chains and stronger financial links can assist less developed countries to accelerate their growth. This in turn helps them address structural problems such as high unemployment, inequality and to eradicate poverty faster.

The  Belt and Road Initiative is an opportunity to scale efforts at extending regional cooperation benefits to include Africa and Europe. It involves the participation of more than 65 countries, more than 60% of the world population is part of the initiative.

This broad cooperation platform is projected to mobilise about $150bn in investments over the next five years. The initiative brings together the objectives of two regional trade corridors, the Silk Road Economic Belt and the 21st Century Maritime Silk Road.

The Silk Road Economic Belt:

The Silk Road will link PRC with the Persian Gulf and the Mediterranean Sea through Central Asia and West Asia. Its three routes of the Belt include:

1. China—Central Asia—Russia—Europe (the Baltic)
2. China—Central Asia—West Asia—Persian, Gulf—Mediterranean Sea
3. China—Southeast Asia—South Asia—Indian Ocean

The route is fashioned on the ancient Silk Road that allowed trade across Central Asia.

On January 18 2018 the first freight train from the People’s Republic of China arrived in London, it travelled about 7,500 miles through seven countries for 18 days. The route has the added benefit of being considerably cheaper than air travel and faster than shipping.

The 21st Century Maritime Silk Road

The main priorities of this route is port construction, transport and logistics and ecological protection. It stretches from the South Pacific Sea to Europe. The two routes of the Silk Road are the following:

1. Coastal China—South China Sea—Indian Ocean—Europe
2. Coastal China—South China Sea—South Pacific

Development finance institutions and green growth

The role of development finance institutions is important in following a trajectory of development and economic growth that does not sacrifice the environment. They have central role to play in assisting countries to develop sound legal and policy frameworks to mainstream green growth.

Development banks have the new obligation of ensuring that there are enough bankable development infrastructure projects to attract private sector resources. They also have to factor in environmental considerations into strategic planning and approaches to regional integration.

National development banks can use their unique operational advantages in their host regions. They can have a bigger involvement by including sustainable development imperatives to infrastructure project planning.

The unique position national development banks occupy allows them to take part in structuring successful regulatory and investment frameworks for Public-Private Partnerships. They are also well placed to increase the pool of available financing from both the public and private finance sectors.

Challenges in scaling up sustainable projects

Infrastructure projects can have proven benefits for environmentally sustainable growth but there are still obstacles to replicating them in other regions or national spheres. The major challenge to scaling-up the transition to increased use of renewable energy is a lack of consistency and policy certainty.

Other challenges relate to a lack of diversified funding resources. To complement public and international sources of climate finance a domestic financing sector needs to be nurtured by working closely with local financial institutions.

GGGI supports and facilitates the design and implementation of financial products that de-risk private investments into infrastructure and renewable energy projects.

Green Bonds

A new impetus needs to be put in growing the green bonds market. Green bonds are bonds with proceeds that are specifically earmarked for projects with environmental sustainability benefits.

Green bonds encourage responsible investment into projects that are aligned with the attainment of the SDGs. They broaden the pool of actors involved in climate action and poverty eradication.

The social benefits of increased responsible investments lie in three factors. First investors look at the environmental impact of investment decisions and how they will contribute towards sustainability. Secondly they look at social aspects like gender inequality and other social factors. The third aspect relates to good governance.

When countries develop financial instruments to mobilise finance for inclusive growth it is important that they have clear frameworks and green investment guidelines. These provide the necessary policy harmony for banks and institutional investors.

Green bond frameworks are governance regulations based on the four main aspects of Green Bond Principles. To qualify bonds to be green aspects the use of proceeds, project evaluation and selection, management of proceeds, reporting are looked at. Green bond volumes are estimated to reach $300bn of issuance by 2018.

Additional Information

For more information contact:

Erika Calayag
Sr. Assistant
Knowledge Development
+63 977 827 3267
erika.calayag@gggi.org

Darren Karjama
Head of Communications
+82 10 9530 9995
darren.karjama@gggi.org

About GGGI

Founded to support and promote the mainstreaming of green growth, GGGI programs and projects target economic growth that is environmentally sustainable and socially inclusive. Headquartered in Seoul, Republic of Korea, GGGI has 28 Members with operations in 27 countries.