Joint Statement
Washington, DC
April 11, 2013

Ministers and senior officials from more than a dozen donor countries met in Washington, D.C. on April 10-11 to discuss ways to meet the challenge of scaling up low-carbon investment in developing countries.

The meeting was convened and chaired by the United States. Participants included representatives from Australia, Canada, Denmark, the European Union and Presidency, France, Germany, Italy, Japan, New Zealand, Norway, Poland, Switzerland, the United Kingdom, and the United States. Attendees included ministers and senior officials from a broad range of government entities, including ministries of foreign affairs, environment, finance, and development, as well as representatives from development finance institutions and export credit agencies.

The chair emphasized that mobilizing climate finance is an inherently complex task that will require a range of delivery channels, instruments and tools, and implementation strategies. With the aim of coordinating efforts among ministries, the meeting sought to build a common understanding of approaches to use public funds to leverage significant private sector investment in low-carbon infrastructure and adaptation in developing countries – including lower income countries, not just emerging economies.

Participants underscored the importance of mobilizing additional finance, in line with our long-term finance commitment, to enable the rapid transition to a low-carbon, climate resilient economy that will be necessary to avert dangerous climate change. They discussed the importance of developing methodologies for tracking mobilized private finance, and noted the newly established research collaborative led by the OECD on this subject.

Participants also agreed on the importance of engaging with developing countries as broader strategies and approaches for mobilizing climate finance are considered.

All agreed on the importance of a sustained commitment to public and private finance as core to a broader climate finance strategy. At the same time, the emphasis on mobilizing private resources was viewed as desirable and practical for several reasons. Mobilizing private markets to address environmental challenges can greatly improve outcomes and cost effectiveness. The resources of global capital markets – if properly incentivized and engaged in the climate investment challenge – far exceed the public budgetary resources available. Also, more efficient leveraging of private investments enables greater focus of public resources in areas where the private sector is unlikely to invest yet there is a great need.

Participants discussed the economic drivers of climate investment and surveyed the landscape of current flows to developing countries. They reviewed the barriers to mobilizing greater investment in low-carbon, climate-resilient infrastructure in developing countries, including generic investment environment risks, risks specific to low-carbon technologies, and technology cost gaps. They discussed the range of tools used to address these barriers, including technical assistance, risk mitigation instruments, debt and equity instruments, and incremental cost financing. They discussed innovative private sector investment structures. They also surveyed the range of institutions through which donor countries deliver these tools, including the multilateral development banks, multilateral climate funds, bilateral aid agencies, development finance institutions, and export credit agencies. The importance of developing country action to invest domestically and improve enabling environments was also emphasized.

A series of presentations by donor countries focused on examples of innovative bilateral programs delivered via development assistance agencies, development finance institutions, and export credit agencies. This was followed by a discussion of recent developments in multilateral development banks and multilateral climate funds.

Participants heard perspectives from private sector project developers and financial institutions on the effectiveness of the public tools and instruments discussed earlier. They also reviewed a range of new approaches to mobilizing climate finance that have been proposed by private investors and think tanks.

Having considered the range of current efforts and their effectiveness, participants discussed how they could enhance action through private sector engagement and improved donor coordination in various multilateral and bilateral climate finance channels. Several countries volunteered to convene discussions in these channels to explore strengthening the relevant institutions’ contributions to climate finance while also examining new ideas for leveraging private investment. Participants agreed to take stock of these and other coordinated efforts and private sector efforts at a ministerial meeting in the fall prior to COP-19.