By Vanora Bennett

The European Bank for Reconstruction and Development (EBRD) goes to COP28, the international climate conference in Dubai, with ambitious plans to support the countries where it works in taking the lead on accelerating their green transition through country-led platforms, which bring together national and international players with private-sector finance to build greater momentum on greening national economies.

“We believe fundamentally that the driver for climate ambition is first and foremost country ambition,” said EBRD President Odile Renaud-Basso.

“Multilateral development banks (MDBs) can foster, fulfil and multiply that ambition. We want our countries of operation to come away from COP with the strong confidence that they can be ambitious, because MDBs will support them, both in the difficult choices the sustainable transition requires, but also in capitalising on the huge opportunities it brings.” 

The Bank, together with other MDBs, which are a major contributor to climate action, will also reaffirm a further enhancement of cooperation, building on several years of fast-growing MDB climate finance. The EBRD will also offer debt deferral in the event of an extreme climate-related event to sovereign, sovereign-backed and municipal clients. 

The need for greater global ambition is growing. As successive reports by scientists for the Intergovernmental Panel on Climate Change (IPCC) and United Nations Environmental Programme (UNEP) show, climate change is currently occurring faster than anticipated, the impacts and damage are greater than foreseen, and the time for remedial action is rapidly narrowing. 

This year’s COP28 includes a global stock-take of climate action progress so far, seeking to understanding how to move faster in meeting the goal agreed in 2015 of limiting global warming to 1.5C by 2050. It will focus on fast-tracking the energy transition, as well as increasing climate finance and mobilising the private sector while delivering protection for nature, enhancing the resilience of human capital and preparing countries for a just transition.

Together, the MDBs will issue a joint statement outlining their shared ambition to respond to the urgency of this agenda. This will include a strong focus on country platforms – country-led programmes that integrate policy reform, investor appetite, donor support and MDB engagement to deliver systemic change – as well as on water, nature, and gender. MDBs will also launch a Long-Term Strategies Programme to provide coordinated technical and policy support to countries for climate planning. 

The EBRD is well placed to support this scaling up of MDBs’ systemic engagement with countries. With the highest levels of private sector mobilisation among MDBs in the developing economies where it works, its own modus operandi has long been to support countries to create a national regulatory environment that will attract the private sector to invest, while also making catalytic investments itself. 

At COP28, the EBRD will report on successes this year with the country platform launched at last year’s COP27 in Egypt: the energy pillar of Egypt’s Nexus for Food, Water and Energy (NWFE). This brings together Egyptian authorities and an EBRD-led group of development partners. It blends enabling regulatory frameworks, technical assistance, and private investment to accelerate a just energy transition. 

NWFE’s energy pillar is already delivering on its aim to replace 5 GW of fossil fuel plants with 10 GW of solar and wind energy by 2028, unlocking at least US$ 10 billion in private investment. With the Green Climate Fund, two of the three projects that will add 1.8 GW of renewable energy originate with the EBRD:  a 500-megawatt wind project in the Gulf of Suez area, and a 200-megawatt solar power project at Kom Ombo. 

“This confirms the core message of the Paris alignment compact: that more ambition delivers more finance and more investment,” said the EBRD’s Managing Director for Climate Strategy and Delivery, Harry Boyd-Carpenter. 

The EBRD is currently leveraging this experience by working with several other countries on their plans to raise their climate ambition through country-led platforms and similar systemic approaches.

At COP28, for instance, North Macedonia will launch a just energy transition investment platform to guide its far-reaching plans for a low-carbon and just transition of the electricity sector. The platform represents a milestone for the historically coal-dependent country and highlights its ambition to transform its energy sector and economy to a low-carbon, low cost and secure paradigm. The EBRD has been supporting the government in the development of the platform and will lead coordination with international partners.

Also in Dubai, the EBRD will announce plans to include climate-related debt clauses in its loan agreements with sovereign, sovereign-guaranteed and municipal clients from lower- and middle-income countries. This will enable debt deferral on pre-agreed terms after extreme climate-related events – including floods, droughts and earthquakes – giving clients a breathing space to compensate for loss and damage suffered. (The EBRD already offers private-sector partners instruments which deliver equivalent outcomes). 

And, as well as joining with other MDBs on shared principles in their work on nature and biodiversity, to be announced at COP28, the EBRD expects to unveil its own approach to nature during the summit.

As a leader in climate finance on three continents, the EBRD’s operations are fully aligned with the goals of the Paris Agreement. It has committed to making at least 50 per cent of its investment volumes green by 2025 – a goal it has met for the past two years. And it has worked for three decades on developing the private sector across central and eastern Europe, Central Asia and the southern and eastern Mediterranean.

Together with other multilateral development banks (MDBs), the EBRD already plays a leading role in helping decarbonise economies and enable the transition to a more sustainable future, with a focus on involving the private sector in tackling climate change. Together, the MDBs pledged in 2019 to significantly raise their climate finance levels and mobilise more climate finance by 2025. They have exceeded those 2025 targets for the last two years running, with the EBRD achieving record volumes of climate finance last year.