Finance Secretary Carlos G. Dominguez III said the support extended by multilateral institutions to the clean energy transition projects of developing economies is crucial to encourage the flow of private sector capital into these initiatives.
Dominguez said the meticulous planning and vetting done by multilateral agencies before extending assistance to projects will build confidence among private investors in mobilizing funds to participate in the resource-intensive programs of developing countries to transition to clean energy.
“The role of the multilateral agencies is very crucial in this part. The multilateral agencies actually are agents of governments,” Dominguez said during the 4th High-Level Ministerial Dialogue on Long-Term Finance in Glasgow, Scotland.
As finance ministers sit as governors in the Asian Development Bank (ADB), the World Bank and the Asian Investment Infrastructure Bank (AIIB), Dominguez said it is very important that multilateral agencies begin the projects that will allow the private sector to take part.
The ministerial dialogue is part of the series of high-level meetings held as part of the ongoing 26th United Nations (UN) Climate Change Conference of the Parties (COP26) hosted this year by the United Kingdom (UK) in partnership with Italy.
Dominguez, who heads the Philippine delegation this year to COP26, said the support by multilateral institutions such as the World Bank, ADB, and AIIB will “open the doors for funds from the private sector to flow into actual projects on the ground.”
His statements were in response to a query by Rishi Sunak, Chancellor of the Exchequer of the UK, on how developing economies can unlock the trillions of dollars in private sector financing available for clean energy transition to fund “practical, tangible projects.”
Dominguez later pointed out that the governments -- as represented by the ministers sitting as governors in multilateral banks -- and the borrowers trust these multilateral institutions.
The DOF chief made the suggestion to "use them (multilateral banks) as catalysts and they can act as a seal of good housekeeping so that they set the standard for transparency."
The ministerial dialogue on climate finance involved three panel discussions. Dominguez was part of the second panel, which tackled the progress made by countries to develop a financial system to support a net-zero and climate-resilient future. Other officials in the panel participated by Dominguez and Sunak were: Azucena Arbeleche, Minister of Economy and Finance of Uruguay; Alison Rose, Chief Executive of NatWest Group; and Mathias Cormann, Secretary-General of the Organisation for Economic Cooperation and Development.