EGYPT - ICF 2022 & African Ministers Meeting

PANEL 3: REDUCING THE COST OF GREEN/ SUSTAINABLE BORROWING

Liquidity constraints remain some of the foremost barriers to allow African countries to invest towards climate resilience and the SDGs. To unlock the financing required, the cost of access to market based sustainable finance nees to be lowered, and this green borrowing needs ot be explicitly linked to climate resilience. The panel will consider a Sustainability-Linked Sovereign Debt Hub in process of being established to support the transformation of debt markets through the development of nature and climate performance-linked sovereign debt. The hub intends to enhance resilience to emerging risks, reduce the cost of borrowing to sovereign debtors who make conscious investments that yield sustainable development outcomes, and establish innovations that allow sovereign debt markets to be suited to a world of external shocks. The session will also examine other tools for reducing the cost of green borrowing including for example the issuance of full or partial risk guarantees, first loss equity among other risk mitigation forms. Successful projects which have benefited from such tools should be showcased and used as a model for additional funding. The panel will also consider the technical assistance requirements of African countries.