The first ever international summit of Development Banks recently concluded in Paris, bringing together different participants from around the globe. Due to the ongoing Covid-19 pandemic the meeting was held virtually, with the main objective being mobilization of a collective response to the ongoing pandemic and a discussion of measures that need to be taken to build a sustainable recovery.
Most prominent at the summit were representatives from Public Development Banks whose main mandate is to implement different countries’ commitments to development and international solidarity in line with the Sustainable Development Goals (SDGs.)
The convener of the meeting was French public bank, Agence française de développement (AFD)
To get a clear picture of the role Public Development Banks play and the outcomes of the financial summit we spoke to Caroline ABT of AFD Rwanda.
Caroline ABT, reckons the crisis has made the role of PDBs more necessary than ever: ‘with private financing drying up, sometimes drastically in developing countries, Public Development Banks have a major role to play.’
Amid the crisis, AFD deployed instruments in order to support and restart the economy and sought to reconcile financing with longer-term objectives, particularly on nature conservation and the reduction of inequalities.
The “Covid-19-Santé en commun” initiative adopted by AFD in April 2020 in response to the health crisis is based on the mobilization of 1.150 billion euros, with a redeployment of credits for 2020. At the end of September 2020, the initiative had already launched nearly 50 new projects in response to the pandemic.
Also, Proparco, the subsidiary focused on private sector development, strengthened the monitoring of its customers and offered them solutions enabling them to cope with the economic crisis, in particular by making existing loans more flexible (i.e. moratoriums). Additional funding has been allocated to support the dynamic of recovery and economic recovery that will follow the health crisis.
On the importance and dynamics of the summit Caroline said it was the first major international meeting on finance and public development issues organized in the context of COVID-19. It brought together the 450 Development Banks as well as various stakeholders, heads of state, governments, international organizations, representatives of the private sector, civil society, philanthropic organizations, think tanks and academia, and featured numerous panels.
Adapting to the particular health situation the summit offered a mix of face-to-face meetings and digital format via a dedicated platform, thus ensuring interactive participation between stakeholders.
The summit addressed the urgent need to create a coherent action between the different actors of finance and development (financial institutions, governments, civil society and academia) for an equitable, sustainable and inclusive development.
The ongoing pandemic has demonstrated the key role played by PBDs, highlighting the need for governments to have flexible financial instruments to reconcile short-term emergencies (such as the health crisis we are experiencing) with their economic consequences and the still tense context of the environmental crisis.
The postponement of the COP26 to 2021 made the summit an essential meeting to feed the momentum around climate issues, a few weeks before the UN and the British government convene a climate summit on December 12 on the occasion of the 5th anniversary of the Paris agreements.
One of the key deliverables of the summit was a joint statement by the 450 PDBs with commitment to support the transformation of the global economy and societies towards sustainable and resilient development. Today, it is essential that we build back better, by simultaneously designing and acting for sustainable, equitable and inclusive outcomes and impacts, leaving no one behind. To this end, PDBs affirmed their determination to collectively shift strategies, investment patterns, activities and operating modalities to contribute to the achievement of the SDGs and the objectives of the Paris Agreement, while responding to the Covid-19 crisis. For greater impact, they expressed their commitment to join forces and form a global coalition of all PDBs around the world.
Solutions are urgently needed, aligned with the Addis Ababa Action Agenda, 2030 for Sustainable Development and the Paris Agreement, collectively set in 2015, to unlock the potential of all financial flows, public and private and help shift current development pathways towards sustainability. Short-term decision-making must be aligned with longer-term goals. The time has come for consistent action of all global finance players.