The 2018 Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) took place in Washington D.C. on April 16-22. During the meeting of the Development Committee on April 21, the World Bank Group’s shareholders agreed to increase the paid-in capital for International Bank for Reconstruction and Development (IBRD) by $7.5 billion and the International Finance Corporation (IFC) by $5.5 billion respectively.

The proposed financing package would allow:

  • IBRD to “deliver climate co-benefits averaging at least 30 percent over FY20-FY23;
  • IFC to increase climate investments to 35 percent by 2030 (mitigation and adaptation included);
  • The WBG as a whole to focus on climate smart investments.

The Report to Governors at 2018 Spring Meetings “Sustainable Financing for Sustainable Development: World Bank Group Capital Package Proposal” also reaffirms a number of policy measures on climate change, such as:

  • The implementation of the Invest4Climate platform – which brings together national governments, financial institutions, investors, philanthropists, and MDBs to identify investment opportunities, support policy reform and crowd in private investment.
  • The presentation of a stock-take of the WBG Climate Change Action Plan 2016-2020 as part of the Global Public Goods Agenda and announcement of new commitments and targets beyond 2020 at COP24 in Poland in 2018;
  • The support of small states particularly vulnerable to climate change.

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Supporting Institutions at the Spring Meetings

At this year’s Spring Meetings, the new Blended Finance Taskforce presented its Action Programme “Mobilising private capital for the SDGs at scale”. The Taskforce describes its role with the Action Programme’s “Investor Club” as coordinating and building on “existing initiatives in the climate space including RE100, TCFD, Climate Action 100+ and the recent ‘Green Bond Pledge’”. By aiming at overcoming the SDG financing gap, while addressing climate issues through the Investor Club the Blended Finance Taskforce highlights the links between development and climate finance.

UBS and the World Bank launched financial benchmark indices for debt issued by the World Bank and other development banks. The indices aim to allocate more private capital to sustainable fixed-income instruments and thus to increase sustainable investments made by institutional investors and corporate treasuries.

The European Investment Bank’s (EIB) announced its plan to launch a Sustainability Awareness Bond. The bond will initially focus on the water sector before being developed to other areas, such as health and education. The first issuance is expected this autumn.

Linking climate finance and development

Side events addressed development issues on a broader level but some of them linked development to climate-related financial issues, such as:

Creating Markets for Climate Business: Mobilizing Private Sector Solutions

Representatives of the public, private and philanthropic sectors discussed together ways of scaling up private finance for climate investments. If green bonds are especially popular among public actors and corporations, notably for large investments such as infrastructure projects, blended finance can present a tool to de-risk climate investments.

Protecting Latin America and the Caribbean’s Future against Climate Risks

Over the past decades, the LAC (Latin America and the Caribbean) region has found itself increasingly exposed to the effects of climate change. Indeed, since 1970, natural disasters have tripled and are most probably going to further increase. Finding innovative solutions to become more climate-resilient is therefore highly important for the region.

Building a Climate-Resilient South Asia

Climate change can heavily affect South Asia, potentially decreasing standards of living and incomes of half of the region’s population. According to an upcoming report by the World Bank, even areas today relatively immune to the consequences of climate change, could be affected by the middle of the century. It is thus necessary to better prioritize financial resources in view of climate adaptation.

The Future of Resilience: Banking on Cities

The Resilience Dialogue discussed ways of overcoming the estimated yearly $5 trillion resilient financing gap of cities. One way of doing so would be for development agencies to help cities structuring projects, which would be attractive for the private sector, as resilient projects in the past have often demonstrated problems regarding return on investment.