Jakarta – In the “Just In Time” report issued by Standard Chartered, it is stated that the funding gap in emerging markets is currently very large (95 trillion USD), but there is also an opportunity of 83 trillion USD to invest in emerging markets through a fair transition. .
“In this case, developed countries are recommended to help developing countries in terms of the required financing. This is where there is the need for a financing partnership between the public and private sectors,” said Standard Chartered Bank Group CEO, Bill Winters, when speaking at a B20-G20 round table themed “Sustainable Finance for Climate Transition” organised by the Indonesian Ministry of Finance in Bali, Tuesday. (19/7).
Last year, Standard Chartered announced a net-zero commitment by targeting net zero achievement in its own operations by 2025, and in terms of financing by 2050 by mobilising green finance of USD 300 billion and transition efforts in the period 2021 and 2030.
Winters said Standard Chartered Bank is pushing for large-scale public-private partnerships to mobilise finance and channel funds to finance sustainable transition projects in developing countries, where funding will have the most impact. He emphasised the importance of the role of mixed finance or blended finance to increase investment. Blended finance is a structuring approach that allows public and private investors, each with different goals, to invest together.
“Mixed finance overcomes the difference between real and perceived risk, as well as poor risk-to-reward ratios, the main barriers for private investors through soft capital and guarantees for development,” he explained.
Developing countries that are self-funding the transition process will feel the impact on people’s incomes. Without support, poverty in emerging markets could increase by USD2 trillion annually.
“In this case, developed countries are recommended to help developing countries in terms of the required financing. This is where the need for a financing partnership between the public and private sectors,” said Winters.
He praised the Indonesian government’s initiative in launching a national platform for an energy transition mechanism. “It is very encouraging to see how committed the nations of the world are towards a just transition. This reflects getting funds into the hands of the people who will be able to make the biggest impact, and it will take an enormous public-private partnership to achieve this,” Winters said. (Hartatik)
Banner photo: Standard Chartered Bank Group CEO Bill Winters speaks at a B20-G20 round table themed “Sustainable Finance for Climate Transition” held by the Indonesian Ministry of Finance in Bali, Tuesday (18/7). (Hartatik)