Finance in Common The first global summit of all Public Development Banks PARIS 12 November 2020 Building resilience for people and planet We must get there collectively by organizing the decisive role of our Development Banks. Organizers President of the French Republic of the Finance Emmanuel Macron in Common Summit Under the high patronage of Mr Emmanuel Macron, President of the PDBs deliver a unique service, French Republic, and with the participation of UN Secretary-General António Guterres, that of linking governments the Finance in Common Summit is: and the private sector an initiative of the World Federation of and turning domestic and Development Finance Institutions (WFDFI) international policy signals and the International Development Finance into local solutions. Club (IDFC), taking place during the 3rd Paris Peace Forum, WFDFI Chairperson convened by the Agence française de déve- Thabo Prince Thaman loppement (AFD), with the support of: Multilateral Development Banks, IDFC members have collectively mobilized their regional associations of Public Development Banks (ALIDE, AADFI, financial capacity and ADFIAP, ADFIMI, ELTI, EAPB, EDFI, expertise to provide an D20-LTIC), immediate response to the relevant international institutions short-term health challenges (UNDP, DESA, UNEP, OECD and the European Commission), as well as to prepare for a Caisse des dépôts et post-Covid-19 world that will consignations, require a long-awaited paradigm and the COP26, the COP15 shift. and the Generation IDFC Chairperson Equality Forum. Rémy Rioux The Finance in Common Summit BUILDING RESILIENCE FOR PEOPLE AND PLANET The first global summit of all Public Development Banks, taking place during the Paris Peace Forum in November 2020, will address our common need to build new forms of prosperity that take care of the living (people and planet) in a resilient manner. In the context of the Covid-19 pandemic and global governance. The subsequent global socio-economic crisis, Summit is intended to the Finance in Common Summit will stress contribute to the COP26 the crucial role of Public Development Banks agenda and the G20 Summit. (PDBs) in reconciling short-term counter- To ensure broad and effective cyclical responses to the crisis with sustainable engagement with all stakehold- recovery measures that will have a long-term ers, and in light of the Covid-19 impact on the planet and societies. Gathering crisis and its consequences, the PDBs from around the world, the Finance in Summit will deploy an innovative Common Summit is an opportunity to: mix of in-person and enhanced digital session formats. gather for the first time the world’s 450 PDBs and discuss their role, their ambition, their Leading up to the Summit, challenges and opportunities; a research confer- ence will be held on bring together the financial community at large 10 November, during to design a financial system whereby Public which a consor- Development banks would have the ability tium of promi- The reorientation of to reorient and leverage all financial flows in nent academic global finance towards the direction of climate and the SDGs; and institutions will climate and SDGs needs present papers a deeper and more contribute to supporting and reinventing and share coordinated effort. Public multilateralism by promoting new forms of insights about cooperation. how PDBs can Development Banks are produce better a significant part of the FOSTERING COLLECTIVE ACTION finance over the solution. long term. Summit The Finance in Common Summit is taking place participants are most 12 November 2020 during the Paris Peace welcome to join. Forum, an annual event focused on improving FINANCE IN COMMON - 1 Public Development Banks A key to delivering the finance we need for the future we want Public Development Banks have a key role to play in reorienting existing investment patterns towards – and facilitating increased investment in – sustainable development. With their public mandates and counter- cyclical role, Public Development Banks There are about 450 in commercial banking, individual bank are more relevant than Public Development accounts or consumer credit. ever to contribute to Banks (PDBs, also the reconciliation of called Development The volume of activity of these institu- economic recovery Finance Institutions) tions amounts to about USD 2 trillion around the world, oper- annually – a stagger ing 10 percent of and sustainable ating at sub-national, the total amount invested in the world development. national, regional, inter- every year by all public and private national and multilateral sources combined. With their public levels. PDBs share three main mandates and counter-cyclical roles, attributes: PDBs are more relevant than ever to help reconcile necessary short-term They enjoy independent legal status responses to Covid-19-related crises and financial autonomy. with solutions for long-term sustain- able development. These institutions They are controlled or supported by represent a “visible hand” that can central or local governments. help mobilize and direct the finance we need for the future we want. They execute a public mandate, addressing market inconsistencies A COURSE OF ACTION TO – notably for the financing of small RESPOND TO NEW CHALLENGES and medium enterprises, essential infrastructures, local financial mar- What type of collective action is kets, housing, small agriculture, required to avoid a long recession and regional and international and make the post-Covid-19 recovery trade – to the benefit of entre- a sustainable one? How can PDBs preneurs, rural households, help economies cope with short-term and the most vulnerable, employment support and long-term including women and necessary transformation of indus- young people. tries? How can they implement the transition towards a low-carbon and They are not resilient economy? These questions engaged will be at the core of the Finance in 2 - FINANCE IN COMMON Common Summit. financial markets. PDBs’ volume of activity PDBs are already supporting the cli- A NEW VISION OF mate and SDG agendas. They provide DEVELOPMENT Financing long-term or concessional resources, initiate knowledge-sharing and techni- Some PDBs have already been cal-assistance programs, and promote active for decades, and an increasing private-sector involvement. In their number of governments are either effort to align with the goals of the Paris strength ening them or estab lishing new $2,300 billion Agreement and the SDGs, a growing ones. Their legit imacy is reinforced by ≈ invested annually number of PDBs are also setting new a new vision of develop ment financing requirements for the allocation of their – one that extends beyond the scope own funding. However, the reorienta- of infrastructure investment or other tion of global finance towards climate tradi tional mandates and that is capable and SDGs requires a deeper and more of mobilizing both government institu- coordinated effort to profoundly trans- tions and financial markets. form harmful practices. On the ground, PDBs can help deliver 10% concrete and sustainable the institutional change and real of the total amount invested in the world economy outcomes that are required solutions every year to turn the UN SDGs into reality. In a world awash with liquidities, there For example, their funding and advice is an urgent need for a coalition of to governments can boost investment financial institutions able to transform in social infrastructure, notably public resources into concrete and for healthcare. They can sustainable projects on the ground. also help build the con- Such coordination among PDBs would fidence to achieve eventually link international policy carbon neutrality issues with local solutions, and gov- by 2050, while ernments’ ability to identify sustain- increasing able development trajectories with the use of private-sector opportunities. nature- based On the ground, Public As public institutions, they represent a solu- Development Banks modern and large coalition of actors. tions. can help deliver the PDBs are organized by region, with institutional change and deep roots in local economic and social real economy outcomes fabrics, and with historic support from that are required to turn regional Multilateral Development Banks. They play a vital part among the UN SDGs into reality. local stakeholders and can deploy a wide range of powerful instruments in order to bridge market failures, mobilize domestic resources, redirect investments, support private sector mobilization and promote sustain ability. PDBs are able to deliver both the “first mile” and the “last mile” of funding, connecting policy intentions with results on the ground – before, after, or in conjunction with FINANCE IN COMMON - 3 OVERVIEW Public Development Banks AT A GLANCE There are about 450 Public Development Banks (PDBs) in the world. Where are they, in which sectors, how much do they disburse? Where in the world What’s What’s are PDBs? Global distribution aa PDB? PDB? Public Development Banks (PDBs) are a vast family of 5 NEW PDBs North America institutions at the intersection CREATED IN 2019 between finance and public policy. They share three characteristics: International 4% Development They enjoy independent legal status Finance and financial autonomy. Corporation Banco del (DFC-US) They are controlled or supported by Bienestar (Mexico) central or local governments. Central and They execute a public mandate, addressing South America market inconsistencies – notably for