I have really been thinking a lot about how we could green the financing of infrastructure, given the amount of investments in infrastructure that will be flowing in via : ADB, World Bank, AIIB and NDB. One of the ideas I had was actually linking sustainability criteria with procurement, greening sources of finance and ensuring infrastructure was climate resilient.
I wanted to know whether you all had chanced upon any practical examples of this?
Also the attached document highlights some ways the Belt Road Initiative is leading in the green finance space. Interesting read- wondering whether this uses legitimate green finance instruments or a green wash. Keen to know your thoughts.
UPDATES as of 14.12.2017
Here are some interesting updates :
Forbes published an article evaluating the 'green' belt road initiative - excerpt from the article - https://www.forbes.com/sites/energyinnovation/2017/12/04/the-china-belt-and-road-initiative-could-help-or-hurt-clean-ene…
"China’s Belt and Road Initiative, the broad infrastructure and market-building initiative of the world’s second-largest economy, has a different feel than trade agreements initiated in the West – and it could have major implications for the future of energy across many parts of the world.That’s partly because unimpeded trade and financial integration are just two of five pillars of China’s ambitious plan for international collaboration. The other pillars are policy coordination, infrastructure connectivity, and people-to-people bonds. And in this program, the Chinese central government has issued guidance on promoting “Green Belt and Road,” to highlight how to incorporate the principles of resource efficiency and environmental awareness into the whole program, touting the need to “develop global energy interconnection and achieve green and low-carbon development.” The question is: Are the environmental protections real?"This question largely remains unanswered - however an interesting statement - China intends to spend more than $360 billion through 2020 on domestic solar and wind power, but given the current policy and market framework in China, energy from these new resources is often crowded out on the grid by coal-fired generation, despite being less expensive on a marginal cost basis. Another similar message :A report published this month by the Global Environment Institute (GEI) showed China is involved in 240 coal-fired projects totalling 251GW across the “belt and road” countries. That figure includes 52 in planning stages and 51 under construction, as well as those built since 2001.
Some notable actions/ proposals to see the green strategy materialize ;
1. proposal to establish “an international coalition for green development”, support adaptation to the impacts of climate change and boost science cooperation. Source
2. To support the innovation agenda, China will set up 50 joint laboratories, train 5,000 foreign scientists and fund 2,500 short-term research visits to China from abroad. Specifically on ecological and environmental protection, Xi promised “a big data service platform”.Source
3. Launched inaugural One Belt One Road (OBOR) Green Climate Bond that also carries Climate Bonds Certification.The bond will be listed on the Luxembourg Green Exchange (LGX (link is external)) of the LUXSE. Source
The use of proceeds for this bond will be dedicated to ICBC's global financing and refinancing of eligible green assets in four categories:
- renewable energy,
- low carbon & low emission transportation,
- energy efficiency &
- sustainable water resources management.
“ICBC officials said that the bank will push green credit business as a long-term development strategy, actively practice the "green development" and "green finance" concept and has committed to building into a leading green credit bank internationally with a good reputation.”