The Green Development and Investment Accelerator: Promoting Investable Green Infrastructure Projects

To stay below 1.5 degrees of warming, emerging markets and developing economies excluding China (EMDEs) will need to spend US$1 trillion a year by 2025 and US$2.4 trillion per year by 2030. Much of this investment will be needed for ‘green infrastructure’, and especially for low-carbon power systems and decarbonised industrial processes. Less than 20 percent of the capital required is currently flowing. Much of the required capital could come from the private sector in the future into opportunities that are – or soon will be – commercially attractive as technology tipping points make these investments viable. This will require solving two critical barriers to mobilising private capital: (1) real and perceived risks which increase the cost of capital in EMDEs; and (2) the lack of bankable project pipeline which limits deal flow. This Policy Brief proposes tackling these two barriers through the launch of a Green Development & Investment Accelerator (GDIA). This would help accelerate access to risk- sharing instruments and streamline the flow of bankable projects. The GDIA would work in partnership with existing regional financial institutions. It could also build on the track record of the G20 in pioneering blended finance mechanisms through the Global Blended Finance Alliance under Indonesia’s Presidency in 2022 and the Global Infrastructure Hub and Facility launched under Australia’s Presidency in 2014.