Scaling Up Green Investment in the Global South: Strengthening Domestic Financial Resource Mobilisation and Attracting Patient International Capital

There is an urgent need to scale up climate and other sustainable investment in the Global South. Yet, developing countries’ access to international sources of capital is more challenging than ever. 

It becomes increasingly clear that the Agenda 2030 and the Paris climate goals cannot be met without strengthening domestic financial resource mobilisation and finding better ways of attracting patient international capital.

Channelling more domestic savings into domestic investment holds substantial potential for improved outcomes. Trillions of developing country savings are currently invested – often at low or negative returns – in financial centres in advanced countries. These capital exports are often channelled back to developing countries in the form of high-yielding, short-term debt, which increases financial vulnerabilities. Over the last two decades, the foreign asset and reserve acquisitions of developing economies other than China amounted $15.5 trillion. This is money that could in part be invested domestically to foster climate action and enable progress in achieving the SDGs.

A new study published by the SOAS Centre for Sustainable Finance calls for a much larger role of public development banks at the national and international level in developing sustainable project pipelines and in financing these. It puts forward proposals how multinational development banks and international development finance institutions can support national development banks and empower them to play a much more prominent role in mobilising domestic capital and channelling it into sustainable investments. It also highlights the potential of digital approaches to build capital market infrastructures and develop debt instruments that better meet the specific needs of developing economies and broaden the investor base.

At the event, a presentation of key takeaways from the study will be followed by comments from panellists and an open discussion.

All are welcome, with no registration needed.

Header Image Credit: Joshua Wilson via Unsplash.