Why gather public development banks mid-November 2020?
Audrey Rojkoff: The International Development Finance Club (IDFC) came up with the idea in 2019. This club is chaired by AFD and gathers the 26 largest national and regional public development banks in the world. They wanted to make a substantial contribution to UN climate change action and sustainable development, so they asked us to organize the first ever summit of the world’s 450 public development banks. It was the start of an adventure!
The first aim of the Finance in Common Summit (FICS) is to raise the profile of public development banks. They are quite diverse in that some operate at the local level, others at national or international level; some are generalists, others specialists in a sector; and their sizes vary considerably. However, what they have in common, is that they all have financial and legal autonomy while serving their governments; they can scale up the resources entrusted to them and have a mandate to support development projects.
Public development banks want to be instrumental in addressing the emergencies of health and environmental crises. We will discuss what we can do to free up their potential by giving them the means to make a more effective contribution to the international climate agenda and Sustainable Development Goals (SDGs). All the banks have joined the initiative.
Is this an auspicious time to organize this summit?
The Covid-19 crisis makes our initiative more necessary than ever, at a time when it is essential to boost public investment, as the Managing Director of the IMF has said. (She will attend the summit.)
With private financing drying up, sometimes drastically in developing countries, public development banks have a major role to play. During the crisis, they have all deployed instruments to restart the economy and seek to reconcile this financing with the longer-term objectives of nature conservation and the reduction of inequalities. They are all trying to mobilize the private sector for the same purpose.
What are the common interests of these banks?
They are all seeking solutions to make their investments more sustainable and inclusive. They are devising methodologies to verify this. They must measure the impact of their actions so that they can report on the implementation of these SDGs. The banks very much need to work more closely together, both during and after the summit. This is what they are telling us loud and clear.
So, we have proposed forming a major coalition of all the public development banks. It will allow them to discuss, share and reinforce their strategies. It will give them more power and a stronger voice on the world stage. It will also help to advocate for stronger multilateralism. It all amounts to a new vision of collective action.
What else can we expect from this summit?
We will publish a study on public development banks and the accompanying database. We’ll highlight projects with potential for concrete results, and will present new forms of support for banks to help them develop their investment methods. And at the closing of the summit, bank representatives will sign a joint declaration.
This summit marks the beginning of a dynamic that is set to gather pace. With COP26, COP15 on biodiversity, the summit announced by President Macron on financing for Africa and the Gender Equality Forum, public development banks will be present throughout 2021, in more ways than one!