BALI - Speaking at the B20-G20 Sustainable Finance for Climate Transition Roundtable hosted by the Ministry of Finance of Indonesia, Bill Winters, Group CEO, Standard Chartered Bank, reinforced the need for public-private partnership in extraordinary magnitude to mobilise finance and channel funds to financing sustainable transition projects in emerging markets, where they can generate most impact.
Bill also emphasised the critical role of blended finance to scale up investment. Blended finance is a structuring approach that enables public and private investors with different objectives to invest alongside one another. Blended finance addresses perceived and real risks, as well as poor risk and reward ratios – the main barriers for private investors – through concessional capital and guarantees for development.
The Bank’s “Just In Time” report also showed that the funding gap in emerging markets today is huge (USD95 trillion), but there is also a USD83 trillion opportunity to invest into emerging markets through a just transition. Emerging markets funding this on their own could have an impact on the income for local people. Without support, populations in emerging markets could be USD2 trillion poorer annually. Developed markets must help emerging markets find the financing they need. A combination of public and private sector financing is therefore needed.
Bill added, “I am encouraged to see how committed the nations of the world are towards delivering a just transition to a low-carbon economy. It is about channelling funds to those who will be able to generate the greatest impact – and requires public-private partnership of extraordinary magnitude. We need to ramp up the amount of public sector funding and leverage it far more effectively to catalyse private sector capital. At Standard Chartered, with our longstanding presence in Asia, Africa and Middle East, we can and will continue to play a key role in enabling these fund flows.”
Standard Chartered announced its net-zero commitment last year, targeting to achieve net zero in its own operations by 2025, from financing by 2050, and mobilising USD300 billion in green and transition finance between 2021 and 2030. Last year, Standard Chartered Indonesia served as one of the financing partners for a project to build 145 MWac Cirata Floating Solar Power Plant (PLTS) in West Java, Indonesia. Once completed, the power plant will generate enough electrical energy to power 50,000 homes and emit 214,000 tons of CO2. This floating solar power plant is planned to be the largest in Southeast Asia, and will be a step forward for Indonesia to achieve its target of 23% sustainable energy mix by 2025. (LM)