Multilateral Cooperation Center for Development Finance (MCDF) CEO Zhongjing Wang discussed the importance of innovative financing for scaling up bankable climate-smart connectivity infrastructure projects and how MCDF’s international partnership approach is helping to address it during a keynote panel, held at the 15th International Infrastructure Investment and Construction Forum in Macau.

Drawing upon an MCDF report that analyzed 45 climate-smart connectivity infrastructure case studies globally, CEO Wang explained that climate financing must be supported by a predictable business environment and high standards at every stage of the project lifecycle. This is vital for ensuring a project’s sustainability and return on investment, he noted.

CEO Wang went on to examine innovative financing’s potential to bridge the global climate financing gap. Citing the MCDF report, he pointed to Egypt’s and Georgia’s successful issuance of green bonds for financing clean transportation, renewable energy, pollution prevention, and refinancing existing bonds.

He also highlighted projects that effectively harnessed private financing. They include a rail project in Brazil supported by a public-private partnership with an innovative payment mechanism and power transmission projects in Peru that used competitive bidding which helped lower projected costs by more than 30 percent.

CEO Wang underscored the critical role of technical and managerial skills for implementing climate-smart connectivity projects and the transfer of International Financial Institutions’ (IFIs) expertise to improve government capacity in these regards.

“International cooperation is an emerging gamechanger,” said CEO Wang. “It is why MCDF is committed to promoting multilateral partnerships to mobilize resources for the development of the sustainable transport, renewable energy, and ICT sectors.”

CEO Wang described how MCDF grants are supporting project preparation, capacity building, and information sharing, helping to facilitate investment for climate-smart connectivity infrastructure from IFIs and partners, including New Partners (developing country financiers).

He presented the green bank project, which MCDF has funded in Morocco and Egypt in collaboration with an IFI to set up thematic investment vehicles, as an innovative financial model.

“MCDF’s international partnership approach combines grants and loans, reduces costs, and shares risks”, CEO Wang said. “Over the past three years, we have disbursed USD30 million in grants, and it is anticipated that this will mobilize billions of dollars for climate financing. It is indeed an innovative financial instrument,” he concluded.