Investing in green infrastructure projects is often challenging. Under the theme “From Green Growth Plans to Green Infrastructure Investments”, leading private and public actors discussed solutions to institutional and financial barriers to attract “green” investments. Gathering around 100 participants, the event co-organized by ICC and the Global Green Growth Institute (GGGI), focused on cooperation opportunities in decarbonizing the energy matrix and building sustainable infrastructure. This included the role of public-private partnerships, standardization of project design, de-risking options, and mobilization of domestic and international institutional investors. Panellists also looked at project pipeline generation as well as at ways to address non-project risks and to achieve financial closure.
Moroccan environment minister Hakima El Haite provided introductory remarks on the long-term political signals that accompany a green growth strategy, followed by James Bacchus, ICC Chair of the Trade and Investment Policy Group, member of the High Level Advisory Panel to the President of the COP to the UNFCCC, who outlined enabling framework conditions for green infrastructure investments.
“We put green growth at the heart of economic planning in emerging countries, so we see how infrastructure investments – in renewable energy technology, low-carbon infrastructure – can be limited by incomplete regulations and more generally by inadequate risk/reward profiles. Institutional investors shy away from investing directly in such projects in the absence of adequate vehicles which could rebalance risk and returns and provide the necessary scale and diversification,” said Nikolaus Schultze, GGGI’s Assistant Director-General for Public-Private Cooperation.
Participating companies, banks and international organizations included ICC, GGGI, Alstom, Odebrecht, Bancolombia Group, International Finance Corporation (IFC), Inter-American Development Bank (IDB) as well as Climate Policy Initiative (CPI).
Mr Bacchus also spoke at the Sustainable Innovation Forum (SIF 2014), joining a plenary that discussed “Putting a price on carbon” alongside Lord Nicholas Stern, Chair of the Grantham Research Institute and Christian Grossmann, Director Climate Change at the International Finance Corporation (IFC).
Carbon pricing is one important market mechanism to encourage financial flows towards climate friendly investments. Carbon pricing should help to achieve global net emission reductions and minimize societal and economic costs for the required large scale mitigation actions. It will be critical that governments ensure that carbon pricing mechanisms work also under the rules of the WTO regime to avoid market distortions for the diffusion of clean technologies and solutions, he said.
During the climate weeks in Lima, ICC also co-organized two breakfast forums with partners including the Peruvian government, the Lima Chamber of Commerce, GGGI, the World Energy Council (WEC), and the World Climate Summit. The events provided an opportunity to share the business perspective on COP20 and COP21, explore ways to mitigate non-project risks in Green Energy Infrastructure projects, and share best practices on public-private partnerships.