Thank you very much Charlotte and welcome back to the Global Partnerships Conference.
You came back – this is good! It must mean you had an okay time yesterday.
As Charlotte said, yesterday was – I found it – an amazing day, had many wonderful conversations.
And today is when we really get into it and work out how we’re going to do some of the things that we talked about yesterday.
I’ve just come this morning from the London Stock Exchange where we launched a brilliant new Finance Hub with the World Bank Group.
Every investor there and everyone in this room knows that there is finance out there and it’s looking for a home, and the challenge is helping it to get flowing.
We all recognise that the global need for development finance is rising and that’s not surprising because the scale of the challenge has increased dramatically, but so has the scale of the ambition of our partner countries.
Rapidly growing populations require more investment in education, infrastructure and other public services.
Covid-19 and the war in Ukraine together reversed hard-fought development gains, particularly in countries already affected by conflict and fragility.
And the vast costs of climate change are hitting the poorest hardest.
The Iran crisis is compounding these challenges – with the effective closure of the Strait of Hormuz hitting fuel, food and fertiliser.
At the same time, public finances are under pressure everywhere, with less ODA available.
So this is a really tough context.
But it’s pushing us to rethink how we do things.
How we transform the global financial system to mobilise new sources of development finance at the scale that’s needed.
That’s the problem that we really need to solve.
To do that, we need to harness strengths from inside and outside government, build modern partnerships and new coalitions and share risks and accountability – because that’s when scale becomes possible.
We’re already seeing progress in this direction.
G20-led reforms to MDBs have unlocked more than $30 billion of additional finance each year and this is being complemented by new financial innovations in areas like guarantees and hybrid capital.
UK guarantees have generated $6 billion in new MDB lending for climate and development in Africa and Asia, plus an additional $5 billion to support Ukraine.
And we’re working with MDBs to strengthen their crisis response and scale pre-arranged finance so emergency funding can get to countries more quickly.
Supporting greater ambition in how the MDBs approach to working in fragile states is vital.
In a more volatile, uncertain world, it is absolutely essential.
But public funding is just never going to cut it.
So we’ve got to focus on getting more private finance flowing to developing countries. When the development gap is in its trillions and we’re getting money even with the work we’re doing with MDBs into its billions, we have to face up to the fact that we need to change the way we’re working.
Recognising the immense volumes of private-held assets that could be directed towards investments in development, under the right conditions is I think where many of us have now got to.
The City of London is the pre-eminent centre for mobilising global development finance and that’s why the World Bank has chosen to expand their presence in London – helping to channel more investment to emerging markets and developing economies.
Last year, the UK’s MOBILIST programme supported a landmark transaction in partnership with the IFC – packaging loans to companies in low- and middle-income countries and selling them to investors via the London Stock Exchange.
This draws in private sector capital and it frees up the IFC’s capital to make new investments.
And we will hear shortly from John Gandolfo on how this has opened up new opportunities for a much broader pool of private capital.
We’ll also hear from Hendrik du Toit about the Emerging Markets and Developing Economies Investor Taskforce, which is an industry-led initiative I help to convene and it’s got potential to do a huge amount. We’ve got one year left so let’s see what we can do.
Bringing together public and private partners, it is doing some great work to resolve the barriers to investment in emerging and developing markets.
I am pleased to make two key announcements to support this agenda.
First is a UK hybrid capital investment will help the African Development Bank to unlock an additional $250 million to lend to African governments and businesses – which will increase the resources available for development finance. And we will be hearing from President Tah shortly on the impact that this is having.
And we will also deliver an eight-fold increase in the UK’s shareholding in the Inter-American Bank’s private sector arm – IDB Invest – to bolster private-sector investment and growth in Latin America and the Caribbean.
James Scriven will be speaking further about IDB Invest’s work on this, and as part of its new five-year strategy, British International Investment, the UK’s development finance institution, is also scaling private capital.
Diana Layfield will talk us through BII’s plans to invest over £1 billion through its new British Climate Partners initiative, aiming to unlock a further £3.5bn from the private sector for Asia’s climate transition. And really thank you so much to BII for co-hosting this conference.
But the capacity of financial systems within developing countries is also just as important.
So I look forward to opening the domestic capital markets session later, where we will hear more on global south efforts to mobilise domestic pools of private capital, and develop new domestic investor task forces as well.
The FCDO’s Finance Community of Expertise will help bringing together UK government and specialist partner expertise to help countries mobilise and manage public and private finance, build resilience to predictable disasters, and counter illicit finance.
But there is much, much more that needs to be done.
And That means bold steps from governments, the MDBs, private investors, philanthropies to transform international development finance.
It means going further, it means going a lot faster on MDB reform to unlock even more financial firepower; ensuring they can be more responsive to countries’ needs, including the most fragile states.
It means accelerating efforts to crowd-in private sector finance into emerging markets to support the climate transition.
It means building closer links between the MDBs and investors.
And it means taking action to build resilience into the system so that we are prepared when – I think most of this, we’ve said already this conference, we see future crises, there’s things we should just learn to expect.
And I began by talking about the scale of this challenge.
And we should be really clear-eyed about this.
If we get this right, the rewards are truly enormous, by strengthening the MDBs, tearing down barriers to investment, building closer links with private investors and accelerating investments into developing countries.
We can build a bigger, better, fairer and faster global financial system.
One that supports growth, jobs and prosperity for everyone.
And I’m sorry I can’t stay with you for the whole discussion. Trust me, I really really would like to but I have to be at another session.
But I am so pleased, can I now pass over to our chair for the panel who is Dr José Vinals and who is the co-Chair of Global Investors for Sustainable Development Alliance.
I’m delighted to welcome our panel of leading voices to discuss the progress we have made, and what we need to do next.