Growing Green Bank Movement Playing Key Role in Financing Clean Energy, Climate Solutions and Resilience – Natural Resources Defense Council
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Jake Thompson
jthompson@nrdc.org, 301-602-3627
Elizabeth Heyd
eheyd@nrdc.org 202-813-8315
GLASGOW, SCOTLAND – Two new financial institutions from Brazil and Washington, D.C., today joined a growing green financing movement that uses relatively small pools of public funds to attract substantially larger private funds to invest in renewable energy, energy efficiency and other low-carbon technologies and projects aiding the shift from fossil fuels to a climate-friendly future.
The two new members—Minas Gerais Development Bank (BDMG) of Brazil, a state-level development bank, and the D.C. Green Bank of the United States, a city-level green bank created to support a thriving, sustainable capital city for all—joined the Green Bank Network at an official side event held during the COP26 global climate talks in Glasgow.
The event titled, “Banking on Green: The role of green banks and development finance institutions in mobilizing private investments into climate solutions,” was organized by Green Bank Network, Green Bank Development Platform, Inter-American Development Bank, Latin American Association of Development Financing Institutions, Minas Gerais Development Bank and NRDC (Natural Resources Defense Council.)
“All over the world, green banks are pioneering the right financing products and platforms for the clean energy transition. Development banks have a long history of fighting poverty through opportunity and financial inclusion, helping grow strategic new sectors, and supporting small businesses,” said Doug Sims, senior director at NRDC. “Now, the worlds of green banking and development banking are coming together as essential tools of sustainable and equitable development.”
COP26 has four key goals, one of which is on pushing developed countries to step up and increase their financial contributions to a crucial international fund established to help developing countries finance the clean energy projects and avoid harmful impacts from climate change. Green banks are trusted local partners based in developing countries that can leverage and direct this funding to projects that fight climate and build local communities.
Globally, there are 27 green banks in 12 countries around the world, primarily in developed countries. Another 20 countries, including emerging markets and least developed countries, are pursuing green bank development. Public development banks are also looking to transform themselves into green finance leaders.
Green banks—specialized standalone financial institution, separately managed green facilities or renovated development banks —are a proven model that can help rapidly draw private capital toward climate solutions.
Since mid-2021, Green Bank Network members invested or committed $50.4 billion in public funds to leverage private financing that support climate solutions around the world worth a total of $134 billion. These clean energy investments will avoid 48.03 million metric tons of carbon dioxide emissions annually, equal to taking 22.4 million cars off the road.
Green banks are needed because, while public investment in new projects and technologies is critical, it isn’t enough to limit global warming to 1.5 degrees Celsius above preindustrial levels.
“We are excited to join this growing group of green banks and a dynamic network that is focused on building a better future for all,” said Eli Hopson, CEO of DC Green Bank of the United States. “We are committed to learning from our colleagues in the network as well as sharing best practices to deliver critical impact at scale. We know that we cannot achieve this impact and transition to a clean energy and resilient future unless we bring everyone with us, and that is why we invest in line with our core values of Sustainability, Inclusive Prosperity, and Clean Economy. We are looking forward to working with the Green Bank Network to build a future where all investment becomes green investment.”
“We are thrilled to become a member of the Green Bank Network,” said Sergio Gusmão Suchodolski, CEO of Minas Gerais Development Bank (BDMG) of Brazil. “We’re particularly proud to be the first development bank to be joining the Green Bank Network. Green banks around the globe are demonstrating their ability to mobilize public and private investment into green infrastructure, and we are excited to join our allies and add our experience, particularly related to financing clean energy and urban mobility projects that advance both green and social goals at the same time.”
Supporting emerging green bank initiatives through direct capitalization or co-investment and with technical assistance, including through the establishment of a Green Bank Design Platform, would mobilize international and national climate finance, develop local green economies, and help spur a green recovery.
Background on new Green Bank Network members:
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The Green Bank Network (GBN) is a membership organization managed by NRDC and the Coalition for Green Capital that was founded in December 2015 to foster collaboration and knowledge exchange among existing Green Banks, enabling them to share best practices and lessons learned. The GBN also aims to serve as a source of knowledge and a network for jurisdictions that seek to establish a Green Bank. The GBN members are the Clean Energy Finance Corporation (Australia), Connecticut Green Bank (U.S.), Energy Efficiency and Renewable Sources Fund (Bulgaria), Green Investment Group (UK), GreenTech Malaysia, NY Green Bank (U.S.), Rhode Island Infrastructure Bank (U.S), Tata Cleantech Capital Limited (India) and new members DC Green Bank (U.S.) and Minas Gerais Development Bank (BDMG). Visit us at greenbanknetwork.org/about-gbn.
NRDC (Natural Resources Defense Council) is an international nonprofit environmental organization with more than 3 million members and online activists. Since 1970, our lawyers, scientists, and other environmental specialists have worked to protect the world’s natural resources, public health, and the environment. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Bozeman, MT, and Beijing. Visit us at www.nrdc.org and follow us on Twitter @NRDC.
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