- IMF has called for a major shift to harness public and, especially, private sector financing.
- The IMF stated that all countries need robust climate policies to accelerate the green transition.
As countries intensify the search for massive global investments to reduce emissions and boost resilience, the International Monetary Fund has called for a major shift to harness public and, especially, private sector financing.
The IMF said this must include substantially more concessional finance that can lower risk and drive private sector finance more efficiently to emerging and developing countries.
This was the outcome of a roundtable discussion hosted at the IMF headquarters in Washington DC to urgently discuss actions needed to accelerate climate action and finance.
Kristalina Georgieva, Managing Director of the International Monetary Fund, Dr. Sultan Al Jaber, COP28 President-Designate, and Mark Carney, UN Special Envoy for Climate Action and Finance and Co-Chair of the Glasgow Financial Alliance for Net Zero (GFANZ), co-chaired the roundtable session.
Participants at the roundtable included representatives from governments, international financial institutions, development banks, philanthropic organizations, and private financial institutions. Climate change is one of the most critical macroeconomic and financial policy challenges that IMF members face in the coming decades.
Vice President Prof. Yemi Osinbajo launched Nigeria’s Energy Transition Plan (ETP) on August 24, 2022, establishing the country’s strategy to reach a net-zero emissions energy system by 2060. Nigeria’s energy sector accounts for about 65 per cent of the country’s total greenhouse gas emissions.
The IMF said a major shift to net zero also requires that the public and private sectors finance all components of the energy transition, including the scaling of clean energy and the managed phaseout of fossil fuels on an accelerated time frame. To achieve this objective, the IMF stated that all countries need robust climate policies that accelerate the green transition and stronger mechanisms to promote cooperation and risk-sharing among stakeholders.
For example, it stated that improved policy, regulatory, technological and information frameworks and financial toolkits could support private capital mobilization and broaden the investor base, especially in emerging and developing economies. The IMF Boss said that by working together, countries could help scale up climate finance so the needed trillions of dollars become available as fast as possible.