A technician walks between the photovoltaic panels during the inauguration ceremony of the Bokhol solar power plant in Senegal, October 22, 2016. This project has benefited from a loan of 34.5 million euros from Proparco (an entity of the French Development Agency).
SEYLLOU / AFP
The “Common Finance” summit is being held from Monday to Thursday on the sidelines of the Paris Peace Forum.
The 450 public investment banks, which represent 10% of investments in the world, will be gathered there (online, Covid requires).
In a context marked as much by the climate crisis as by that linked to the Covid, these 450 financial institutions will seek to strengthen their capacity to make the link between the short-term emergency and a sustainable recovery.
For its part, the Climate Action Network (RAC) is awaiting concrete commitments on how financial aid will be allocated to the most vulnerable countries.
By themselves, they inject 2.300 billion dollars each year.
That is 10% of the total amount invested in the world.
This shows whether public investment banks weigh on the global economy.
Not always very well known to the general public, there are 450 of them around the world.
“Most of them are national banks,” explains Thomas Mélonio, executive director of research at the French Development Agency (AFD), one of the 450. Their sole shareholder is their government, they work mainly in their country, and sometimes a little abroad.
But there are also some international ones, the best known being the World Bank, whose shareholders are all the countries of the world, and which works in all developing countries ”.
A summit to bring them together
As of Monday, they will all meet at the first edition of the “Finance en commun” summit, organized by AFD and hosted by the Paris Peace Forum.
But which, Covid obliges, will take place 100% online.
Never before have public development banks come together for a summit.
“We started working on it before the health crisis in order to prepare for the two major international meetings of 2020 which should have been COP26 in Glasgow [on the climate] and COP15 in Kunming in China [on biodiversity], says Thomas Mélonio.
The economic crisis linked to the Covid-19 pandemic has been added to the agenda and further increased the need for this summit.
Make the connection between short-term emergency and sustainable recovery
This is because public development banks have three main missions:
Manage public savings by directing investments towards infrastructures or economic sectors considered by States as priorities
Support activity to save businesses and jobs during crises
Address market imperfections by intervening in areas where private actors do not invest spontaneously, although they are essential for the general interest.
Education, health, but also ecological transition, the preservation of biodiversity ...
This first summit must "show the capacity [of these banks] to provide immediate reinforcement in the face of the crisis while preparing a lasting recovery, aligned with the 2030 Agenda", summarizes Rémy Rioux, director of AFD and chairman of the summit. .
Three thousand participants are expected at the various round tables, and several heads of state are announced from the rostrum.
And by way of closure, the summit promises a declaration signed by the 450 establishments.
At the Climate Action Network (RAC), a federation of several French climate NGOs, we will look at this first edition closely.
"Our main fear is that this summit will give birth to small measures and that nothing will change in the way in which financial flows are allocated", details Lucile Dufour, responsible for "international policy" at RAC.
Climate finance not yet up to the task?
It is already a question of the amount.
Rich countries invested 78.9 billion euros in 2018, including 62.2 billion in public funding, to help developing countries adapt to climate change and reduce their greenhouse gas emissions, said Friday the Organization for Economic Co-operation and Development (OECD).
We are still a long way from the 100 billion euros in annual assistance promised by the countries of the North to the countries of the South.
The commitment was made in 2009, during the COP in Copenhagen, and was to be kept from 2020. “It's not just a question of solidarity, but of climate justice, insists Léa Vernhet, in charge of advocacy at Care France.
The G20 countries emit 80% of greenhouse gases when the poorest half of the world emitted only 7% of greenhouse gas emissions between 1990 and 2015. Yet they are the first to suffer the consequences. , now.
Léa Vernhet points to two other limits.
“The climate finance allocated to poor countries is today mainly dedicated to climate change mitigation issues [enabling these countries to initiate their energy transition], while they also have considerable needs in terms of adaptation to climate change. already real consequences of climate change * ”, she begins.
The second ?
“This aid is mainly paid in the form of loans, not grants, which only inflates the already unsustainable debt of these vulnerable countries.
Another downside is the financial support that a large number of public development banks continue to provide to fossil fuels [oil, coal, natural gas, etc.].
“It varies from one bank to another, tempers Thomas Mélonio.
AFD, for example, has not been financing coal projects for years and no longer projects linked to hydrocarbons.
We are also committed to making our activities 100% compatible with the Paris Agreement by 2022. Others are following this movement.
Banks that still support fossil fuels
But there are also bad students, the RAC lingers, speaking of the G20 countries, including France, which continues to provide financial support for fossil fuels via export guarantees.
"This mechanism allows the Public Investment Bank (BPI France), via its export insurance subsidiary, to guarantee loans from French companies to commercial banks," explains Cécile Marchand, campaign manager "climate / actors public ”to Friends of the Earth France.
It thus allows them to borrow at a lower cost and to carry out very risky projects on the political and financial level and in areas not always compatible with the Paris Agreement.
"In 2017, the State provided a guarantee of 500 million euros to the French company TechnipFMC for a gas exploration project off Mozambique, a real climate bomb," she illustrates.
At the beginning of September,
also revealed that the State was considering the possibility of providing support for a gigantic gas project in the Russian Arctic, led by Total and the Russian group Novatek, still via export guarantees.
"Develop new coalitions of actors"
The RAC then expects from this summit "concrete commitments from the banks present, measurable and limited in time," insists Lucile Dufour.
Both on the end of fossil fuel financing - by 2022 at the latest - as well as on the increase in financing for the just transition, respect for human rights or even on the problem of the sovereign debt of the most vulnerable countries.
These commitments will be difficult to include in the final declaration, to listen to Thomas Mélonio.
“Once again, development banks work for a government, so that they can only commit if the latter authorizes them to do so,” he recalls.
On the other hand, this summit can create new coalitions of banks committed more strongly to the ecological transition and push other still timid countries to realize that this is the direction that a growing number of actors are taking.
In short: move the lines a little more.
Climate: Rich countries broke promise to help poor countries deal with climate change
Climate: Pollutant emissions of the richest 1% pointed out by Oxfam
* The construction of dikes, the elevation of habitats, weather warning systems. This lack of interest in adaptation to climate change had already been pointed out by NGOs on the occasion of the first edition of the One planet summit, in December 2017.
* The construction of dikes, the elevation of habitats, weather warning systems.
This lack of interest in adaptation to climate change had already been pointed out by NGOs on the occasion of the first edition of the One planet summit, in December 2017.