DID YOU KNOW?
$6 trillion per year is required until 2030 to finance the global pathway to sub -2°C
THE PROBLEM
There's presently only 1/6th of that amount being raised.
To resolve this, blended finance solutions need to be created at speed in great numbers. Different parties need to cooperate effectively to make the climate finance supply chain work and create those solutions – this need is not being met.
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Finance providers are typically highly ‘silo-ed’, operating in their traditional comfort zones
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Their funding mandates/agendas/strategies are highly idiosyncratic and often difficult to align with those of others
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There is little mutual understanding of these agendas, nor of the different cultures that arise within institutions as the result of implementing a certain type of strategy or mandate
As a result, there are many opportunities for misunderstandings and misalignments to occur, meaning that the collaborative blended finance efforts that do exist more often than not become complex and protracted, with the inevitable consequences for at best, poor resource utilisation and high transaction costs, and at worst failure of transactions to complete.
Company Profile
THE SOLUTION
For the situation to change, there needs to be a wider and deeper mutual understanding between stakeholders of their agendas, constraints, risk appetites and ways of working.
To achieve that understanding, there needs to be more personal relationships at the right levels. The fastest way to achieve this would be for people to spend time in organisations other than their own, in a structured way.
This could be delivered via an institution-to-institution secondment/exchange scheme. For example:
Investment Bank
Multilateral Development Bank
Philanthropy
Development Finance Institution
Development Agency
Commercial Bank
Depending on geographical proximity, placements could on a periodic (e.g. 6-12 months)
or proportional basis (i.e. 2 days per week)
THIS WILL DELIVER:
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Better mutual understanding of institutional agendas, cultures, ‘languages’
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New technical skill sets and capabilities
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New personal relationships at senior levels
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Lasting network providing a legacy of continued understanding between institutions deploying capital for climate finance
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Significantly increased numbers of completed mitigation and adaptation transactions and projects
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Resultant benefits for un(der)served and at-risk populations