Global Gateway, launched by President von der Leyen in December 2021, is the EU’s contribution to narrowing the global investment gap, supporting global economic recovery and accompanying the twin green and digital transitions beyond European borders. It is a value-based strategy to boost smart, clean and secure links in digital, energy and transport sectors, and to strengthen health, education and research systems across the world.
With its Global Gateway communication of December 2021, the EU set out concrete ideas for investment in sustainable and high quality infrastructure development around the world, in order to help to tackle the most pressing global challenges.
The need for a holistic approach has never been as striking. The COVID-19 pandemic and its global economic fallout have dramatically impacted countries around the world, increasing financing needs and decreasing availability of resources for high-quality infrastructure projects. While public resources will continue to play an important role, there is especially a need to close the global investment gap by scaling up the flow of private capital towards investments in low and middle income countries.
Sustainable finance is key to bridge this financing gap and achieve the objectives of Global Gateway. Yet, scaling up sustainable finance globally is challenging and even more so in low- and middle-income countries. During this special event, panellists and participants discussed what these challenges are and how they can be addressed. In particular, they exchanged their views on:
how to build a conducive environment for attracting additional private finance at scale in low and middle income countries;
what policy incentives and partnerships are needed for an optimal crowding-in of private sector financing in low and middle income countries;
the role of sustainability-related financial instruments and products including green bonds or other innovative financing mechanisms
Given the strong growth in demand for sustainable financing investments and instruments, such as green bonds, the panellists discussed challenges including how to find suitable opportunities based on trust and transparency and the importance of harmonising the taxonomy to create a global framework for sustainable financing. Focus was also put on whether countries with low or net-positive emissions should be treated differently from highly industrialised countries and the power of small and medium enterprises to drive economic growth. In addition, panellists broached the issue of why it’s critical that the objective of financing should be to improve people’s lives.