Bridging the climate finance divide

For our 14^th episode, I invited Dr Mahmoud Mohieldin to discuss the climate finance divide and how to overcome it. The climate finance divide is the gap between the funding needed and funding available to tackle the global climate crisis. It is particularly stark in developing and emerging economies, as these countries face high levels of debt and limited sources of public revenue. Because developing countries are responsible for far less of the Co2 emissions than developed countries yet suffer more from the consequences of it, bridging the climate finance divide calls for international solutions.  My guest just returned from COP29 and shares his insights from there and from his career dedicated to finance and international development. Dr Mahmoud Mohieldin is an economist who has held roles as Executive Director of the IMF Group, Senior Vice President at the World Bank and Minister of Investment of Egypt. Currently, he is UN Special Envoy for Financing the 2030 agenda.

• There is an annual investment need of USD 1 trillion of external climate finance in emerging and developing economies (excluding China) until 2030. A large part of these funds needs to come from bilateral and multilateral development banks. These institutions need to get better at leveraging or de-risking private sector finance to meet overall financing needs.
• Multilateral development banks need to get money out of the door more quickly – a fact that has even been acknowledged by the President of the World Bank. At the same time, the pipeline of bankable projects also has to be increased through capacity development on the demand side.
• Even though the Paris agreement calls for a balance between adaptation and mitigation finance (article 9.4), adaptation finance remains particularly underfunded. The Sharm-El-Sheikh Adaptation Agenda has been the first framework to help spell out investment opportunities.

• Mahmoud Mohieldin’s website
• Remarks by World Bank Group President Ajay Banga at the 2023 Annual Meetings Plenary
• The Guardian’s analysis of the operationalization of Article 6 of the Paris Agreement at COP29
• 2024 Implementation Report on the Sharm El-Sheikh Adaptation Agenda

Financing Impact is a podcast about funding and scaling societal impact. This podcast is brought to you by SciFi, the Societal Impact Financing Initiative at ESMT Berlin. SciFi is supported by the Gates Foundation, among others.

For feedback on the show or to suggest guests for future episodes, contact us at scifi@esmt.org