BALI, Indonesia – July 23, 2015 – The Council of the Global Green Growth Institute met today to discuss policy barriers to green investment in developing countries and how sound policy can open countries up to investment and job creation, particularly in green infrastructure.
The strategic discussion was held during GGGI’s 7th Council meeting, held in Bali, Indonesia, which consisted of officials from GGGI Member countries and Chair and President Susilo Bambang Yudhoyono, former president of Indonesia, as well as Director-General Yvo de Boer.
Between now and 2030, the world will require an estimated $90 trillion investment in infrastructure if we are to meet and maintain global economic growth targets. The question is not just what kind of infrastructure will be built. Some infrastructure locks-in patterns of inefficiency, like poorly planned roads and sprawling cities that implant private transportation dependence or poor housing stock. Conversely, infrastructure, if built right, can also lock-in efficiencies and facilitate de-carbonization, energy efficiency, and pollution reduction.
The GGGI Council met with experts from the Overseas Development Institute, the World Business Council for Sustainable Development, as well as experts from GGGI Member countries to discuss some of the barriers to the right kind of infrastructure investment in developing countries, such as weak institutions, weak regulations, small tax bases, and poor credit ratings that make investors think the risk is too high.
“It is critical that we identify what are the barriers to overcome and convert mindsets globally, nationally, and locally,” said President Yudhoyono at the opening of the discussion.
The experts discussed how to overcome these barriers to spur investment in green infrastructure, which includes political commitment, restructuring incentives, increasing technical knowledge and capacity, and developing new financial products aimed at long-term investors with an interest in green economic initiatives.
“Most of the time the problem is not the lack of capital, indeed there are more than adequate resources for massive green infrastructure investment around the world,” said Yvo de Boer, Director-General of the Global Green Growth Institute.
“The problem is that many countries have an investment climate that makes investors hesitant, so through this discussion with our partners here today, GGGI will be better able to develop bankable projects that can help unlock these vast global capital resources and channel them to better, greener investments,” Mr. de Boer added.
GGGI Member countries participated in the discussion and added an array of inputs on what GGGI can do to help countries overcome these barriers. The notions of working as a neutral advisor on what investment vehicles countries could use to get projects financed, helping governments understand the true high cost of brown development versus green growth, and helping to mainstream green growth in the civil service were all offered as possible areas where GGGI could add value.
GGGI’s Strategic Plan 2015-2020 places great focus on providing green investment advisory services to developing and emerging countries to help them develop sound project proposals that attract international finance for green infrastructure and other green growth initiatives. Today’s strategic discussion was a key knowledge-sharing activity to discuss the kinds of strategic initiatives GGGI might engage into help unlock infrastructure investment.
Based in Seoul, GGGI is an intergovernmental organization founded to support and promote green growth. The organization partners with countries to help them build economies that grow strongly, are more efficient and sustainable in the use of natural resources, less carbon intensive, and more resilient to climate change. GGGI works with countries around the world, building their capacity and working collaboratively on green growth policies that can impact the lives of millions.