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An Inclusive Green Recovery

A report on the P4G Seoul Summit Pre-Event on 19 April 2021, by Lottie Moore and Dan Male of Public Policy Projects

John Murton, the UK Government’s COP26 Special Envoy opened the P4G pre-summit conference explaining how the global 2021 P4G Seoul Summit is a key milestone on the way to COP26. He outlined the significance of the summit in demonstrating the role of business and investors as “fundamental enablers in facilitating the global transition to low carbon economies and helping us to achieve net-zero.”

Hosted jointly by the Embassies of South Korea and Denmark in London, the pre-summit explored P4G’s alignment with COP26 goals, specifically delivering on NDCs in developing countries with innovative partnerships and financing models. The session highlighted examples of P4G’s pioneering green partnerships, which demonstrate an innovative and effective approach to sustainable and inclusive development, including the crowdfunding platform Energise Africa and SSEZ/Sustainable Industrial Clusters.

A crucial year for climate action

Ambassador of the Republic of Korea, Enna Park, began by stressing South Korea’s position on climate change. Asserting that bold action without delay was necessary, she said: “it was with a sense of urgency and responsibility that Korea declared our vision of achieving carbon neutrality by 2050.” She highlighted how P4G will increase political momentum on the fight for climate change in the run up to COP26. Concluding that a greener world is only possible with global collaboration, Ambassador Park asserted: “No single country or player can cope with climate change alone. All stakeholders – developed and developing countries, business and civil society together – must act in global solidarity.”

Ambassador of Denmark, Lars Thuesen, agreed with Ambassador Park. Highlighting that Copenhagen was the location of the first P4G summit, Thuesen emphasised how the key message of the 2018 summit – ‘action now’ – remains as applicable as ever. Reiterating the role of business, Ambassador Thuesen stated: “the approach then, as is today – is through innovative public-private partnerships and finance models.” Explaining the impact of P4G’s work, Ambassador Thuesen outlined how the 56 green partnerships facilitated by P4G have led to an annual reduction of more than 110,000 tonnes of CO2, raised over US$300 million in investments and directly benefitted over half a million people.

The Rt Hon Anne-Marie Trevelyan, the UK government’s Minister of State for Business, Energy and Clean Growth again emphasised the P4G summit as a “key milestone in this crucial year for climate action.” Offering some key reflections on the UK’s perspective, the Minister noted the onset of the coronavirus pandemic as another pressing global challenge – but one that offers opportunities when facing climate challenge. She said: ‘As we begin to look ahead to life after the pandemic, achieving net-zero must remain at the core of our recovery strategies. We must build back better, greener and more resilient than before.”

Explaining how the UK has begun to deliver on its commitment to net-zero by 2050, Minister Trevelyan noted how the UK’s green industrial revolution includes advancing off-shore wind, the phasing out of petrol and diesel vehicles and suspending support for overseas fossil fuels. She finished by offering four key items on the UK’s climate agenda. Firstly, the UK is setting ambitious national contributions that align with net-zero to encourage other countries to reduce emissions. Secondly, strengthening adaptation to help international adjustment to a sustainable world. Thirdly, to get finance flowing through both public and private channels, the UK doubling its international climate finance and encouraging other donor countries to do the same. Finally, enhancing collaboration across global sectors: “national climate action is necessary, but it is not sufficient. Climate change is a global problem, and it must demand a global solution.”

Deputy Minister and Ambassador for Climate Change at the Republic of Korea’s MFA, Yeonchul Yoo, said that the upcoming summit was a “timely opportunity” for countries to share views on how to accelerate green growth. Stressing that the devastation of the pandemic may only slightly parallel what we could face with a climate crisis, Mr Yoo outlined how the climate crisis is confronting humanity with a “new normal.” Yet, “there is neither PPE nor vaccines for climate change.” Stressing the need for global collaboration, Mr Yoo urged: “multilateral efforts are essential – and perhaps – the only way out.” Recognising it has been 30 years since climate change negotiations began, Mr Yoo highlighted how the world is finally equipped with a universal framework in the form of the Paris Agreement. Emphasising how citizens must be on board with climate change infrastructure, future generations must be central. He recognised that P4G offers a vital link between existing government action and future action required. In facilitating inclusive green recovery towards carbon neutrality, Mr Yoo said that P4G is an important way “to make our future more sustainable.”

Tomas Anker Christensen, Denmark’s Climate Ambassador, outlined his country’s role in the P4G initiative. Highlighting how the P4G bi-annual summit came about as a way to ensure the climate crisis was being fought outside of the UN framework, Mr Christensen explained how far the P4G has come. At this year’s summit, participants can look forward to learning about partnership solutions from high protein biscuits to offshore winds. Noting the Republic of Korea’s impressive commitments, Mr Christensen asserted that “this year, P4G could become the event that marks the ambition for Asia to lead in the transformation of the green economy.”

Turning to pioneering P4G partnerships, Ian De Cruz, Global Director of P4G, disseminated for participants the P4G impact model. He explained quite simply that “what P4G provides is turning these plans and commitments [of the UN frameworks] into actions.” Highlighting how the P4G ecosystem contains over 140 business partners and 100 civil society partners, Mr De Cruz offered two key areas where P4G has made a difference. Firstly, in systematically developing a pipeline of over 50 partnerships in developing countries. Secondly, in leveraging investments totalling more than US$290 million to positively affect the lives of 500,000 people, while reducing CO2 emissions by 110,000 tonnes.

Bridging the gap between the development agenda and the investment agenda is the key strategy for the platform. Explaining how P4G will go from a national agenda to a global one, Mr De Cruz highlighted how its ecosystem enables them to drive forward agendas such as COP26. Using the example of introducing electric public transport into Latin America, P4G has facilitated the ZEBRA partnership, which seeks to drive zero emission buses in countries like Brazil, Colombia and Mexico. By utilising the ecosystem of investors in Latin America, this dream has become a reality. “Providing concrete solutions in developing countries that are aligned with global agendas,” is how Mr De Cruz explained the work of P4G before concluding with an invitation for the audience to “join the P4G family.” A number of P4G partnerships were then introduced as case studies to evidence the progress being made, including SSEZ/Sustainable Industrial Clusters, Energise Africa, Halving Food Loss and Waste by Leveraging Economic Systems (FLAWLESS), Africa GreenCo, and GeoFutures Greeninvest.

Sustainable Industrial Clusters Partnership

Gail Klintworth, Chair of Savo Project Developers, outlined how sustainable industrial clusters can accelerate a ‘just transition’ from high fossil fuel energy systems to more inclusive economies. There are at least 5,000 industrial clusters around the world, explained Ms Klintworth, laying out the context of their work. In many cases these clusters are government-driven but also exist as smaller locally driven projects and are commonly fossil fuel-driven.

Savo Project Developers works across Africa with the support of P4G, running projects aiming to enable 75 megawatts of renewable energy generation by 2030. In Nigeria, one such project is working with the LADOL sustainable special economic zone to aid the transition from diesel to LNG and biofuel. The aim of the work is to support the programme to enable over US$1 billion investment for renewable infrastructure, create 10,000 direct jobs and catalyse and integrate the supply chain for small solar off-grid solutions.

In Kenya, Savo Projects Developers is working with Oserian Two Lakes Industrial Park to bring in US$0.5 billion for resilient infrastructure, creating 10,000 jobs and generating 30 megawatts of renewable energy. Due to the location of the project, there is potential to use geothermal activity to regenerate 20,000 hectares of degraded land. A second project in Kenya at Kilifi Eco-Park promises US$1 billion in renewable infrastructure, 20,000 jobs and the generation of renewable energy.

An initial challenge faced by many projects is accessing a vehicle to finance them, explained Ms Klintworth. Joining these dots is what P4G and the Sustainable Industrial Clusters P4G partnership are seeking to do.

Energise Africa

The second P4G partnership case study came from the Energise Africa Partnership whose CEO, Lisa Ashford said: “Energise Africa is a partnership that is focussed on mainstream people-powered impact investing.’ Its ambitions include putting “life-changing” clean energy within financial reach of 50 million people by mobilising US$1 billion in affordable finance to support the UN Sustainable Development Goals.

Energise Africa is a joint venture between impact investing platforms Ethex and Lendahand, which support organisations such as UK Aid and P4G to bring retail investment to organisations providing affordable clean energy in sub-Saharan Africa. The framework allows individuals to invest in specific campaigns from across the world to support the scaling of schemes such as pay-as-you-go solar provision. Institutional investment is then used to leverage the funding from retail investors. “So far, over half a million people have gained access to clean energy,” said Ms Ashford, with £20 million already invested in the platform. The project is set to mitigate 123,000 tonnes of CO2 annually.

In contrast to the majority of financial products on the market, 36 per cent of investors in Energise Africa are female. This is incredibly progressive and reflects the nature of the mission set out by the organisation. Already, the project is supporting over 7,000 entrepreneurs operating SMEs and micro enterprises in Africa. P4G has backed Energise Africa to upscale and bring on additional resource to continue development across jurisdictions throughout the continent. “We really see that people-powered finance can be a useful tool when it is used to create solutions,” concluded Ms Ashford. “Having a public, private and retail investor combination can help to create leveraged investment in climate finance.”

A truly global debate

Ramiro Fernandez, Senior Advisor to the Chile COP Champion, welcomed the P4G summit, calling for partnerships between governments and independent organisations to allow 2030 to become the “decade of implementation.” In Chile, P4G has already supported the set-up of a green hydrogen strategy for the Minister of Energy and Mining to great effect, he evidenced. Meanwhile, Sir Roger Gifford, Chair of the Green Finance Institute, outlined the scale of the investment management market in the UK for green growth that exceeds £10 trillion. Taking its origins from Scandinavia, Britain is now a leader in green investment, stated Sir Roger, highlighting the importance of fostering an “investing in impact approach” to ensure change is mobilised on the ground. However, he warned that workable solutions differ around the world and carbon copy programmes should not be considered to have equal impact in all jurisdictions.

Nicholas Nesbitt, P4G Kenya National Platform Co-Chair and Chair of Kenya Private Sector Alliance (KEPSA), stressed the importance of taking an ‘all-inclusive approach’ to ensure no group is left behind. He expressed support for the P4G platform, which is crucial in allowing Kenya to meet its commitments to the sustainable development goals via an economy-led transformation. However, he warned the need for partners in academic, private and public sector and international organisations to meet these targets.

Responding to the contributions of the afternoon, Rt Hon Claire Perry O’Neill, Senior Advisor on Energy and Climate at Public Policy Projects, pressed the “need to scale up and ramp up” efforts, reflecting on the positive impact that has been observed thus far. In doing this, there is a need to attract more capital, and focus more attention on communications with governments, she added. Building upon this, Ian de Cruz highlighted the necessity of finance products which give cheaper credit where capital is available upfront to deliver solutions more efficiently and effectively on the ground.

Despite a wealth of examples of best practice in operation, many questions remain, including how to incentivise and enable investors to support lots of different smaller projects to scale up and become more attractive to institutional investors. Despite growing optimism for the potential of emerging investment frameworks, Sir Roger Gifford warned that “green does not replace credit quality” and that investors will look at the “fundamentals of any loan.” While bundling solutions often arise on a country-by-country basis to assemble a syndicate of investors which can overcome this issue, Sir Roger highlighted the important role of national development banks in identifying and supporting individual projects in need of investment. This is perhaps where P4G offers greatest value, reflected Rt Hon Stephen Dorrell, Chair of Public Policy Projects. Where governments are unable to provide the linkage between investors and projects in-situ, a collaboration of international actors is needed.

So, what next?

The discussion made clear the need for governments to open up opportunities for investors to support smaller green projects across the world. There is no trade-off between achieving Sustainable Development Goal objectives and climate change objectives.

With no shortage of money in the investment and development community, there remains a lack of funding upstream in innovative new business and project models that are driving change. “There is a need for investment and delivery mechanisms to co-create solutions from the start,” concluded Mr De Cruz. While P4G is one such vehicle, all initiatives require a funding framework to convert plans into action, which supports higher-risk strategies with reliable delivery mechanisms.

Mr Christensen concluded by calling for international stakeholders to “make the conversion bigger” by engaging with more developing countries beyond China and India. Meanwhile, the final word fell to Ambassador Yoo: “The world is facing the unprecedented crisis of the Covid-19 pandemic, economic recession and climate change. In order to overcome this crisis, we need to, and we have to, give up our old habits and have to develop our new habits.” While government provides the strategy, it is civil society that develops the ideas, and this is where development must begin.

2021 P4G Seoul Summit

The 2021 P4G Seoul Summit takes place on May 30-31, bringing heads of state, CEOs, and other key global leaders to accelerate P4G’s unique impact model, emboldening climate action for a more sustainable and inclusive future. For more information, please visit https://2021p4g-seoulsummit.kr/





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