The European Commission received today the final recommendations of the High-Level Expert Group (HLEG) on scaling up sustainable finance in low-and middle-income countries., in the presence of International Monetary Fund Managing Director Kristalina Georgieva.
Dr Nicola Ranger, Executive Director and Programme Leader at the Environmental Change Institute, is one of 20 experienced senior, high-level members who make up HLEG along with a further 20 observers.
Since 2022, emerging markets have experienced the worst ever capital outflows. The report provides concrete and innovative actions the Commission can take to mobilise private capital for sustainable investments in Global Gateway partner countries.
It outlines ten recommendations, with a focus on establishing an enhanced strategic engagement model with partner countries while ensuring increased flexibility in leveraging the EU's external financial support instruments. Furthermore, the HLEG recommends innovative solutions to mobilise private capital and the increase of fiscal resources for sustainable investments, alongside measures to strengthen the size and depth of local sustainable capital markets.
The recommendations in the report feed into the wider debate on how to crowd in more private funding for sustainable development in partner countries through innovative models, in a context of constrained public funds and limits to concessional finance. For this to happen, partner countries need to continue working on developing their sustainable finance ecosystems and sustainable capital markets. In parallel, ongoing discussions of the mandates of multilateral development banks and development financial institutions will also be instrumental to bring the private sector on board.
Dr Ranger said:
We cannot achieve our net zero and sustainability goals unless we bring the whole world with us. Emerging and developing economies alone require additional investments of 4 trillion a year to meet the sustainable development goals, including a 2 trillion climate investment gap. Closing this gap is a win-win for society and investors and requires action at all levels, from removing artificial barriers in regulations of high income countries, to investing in better data and analytics and exploring new models of partnerships between the public and private sector.
Fundamentally, we need to power up the global financial system to support the transition to nature-positive, resilient, green economies in all countries. It’s been a huge pleasure these past 18 months to work with the European Commission and experts and financial institutions from around the world to develop solutions. Now is the time to put words into action.”
International Monetary Fund Managing Director, Kristalina Georgieva, said:
Constraints on public finance coupled with high interest rates worldwide are making it ever more difficult to close the investment gap for low- and middle-income countries. This report is a valuable contribution to the ongoing international reflection on how to mobilise private capital for these countries and resonates with the IMF’s own ongoing work in this area. The IMF will continue to work closely with the European Commission in supporting our partners in developing their capital markets, attracting private investors, and overcoming financial obstacles to secure a bright, more prosperous future for all.”
Read more on the announcement.
Read the High-Level Expert Group on scaling up sustainable finance in low- and middle-income countries (HLEG) final report: