SPOTLIGHT
FACTFILE: RANIA AL-MASHAT
Dr. Rania Al-Mashat has been Egypt’s Minister of International Cooperation since December 2009 and previously served as the country’s first female Minister of Tourism. An economist by training she earlier was Advisor to the Chief Economist of the International Monetary Fund (IMF) in Washington, DC. She represents Egypt as governor in several international financial institutions. Ms. Al-Mashat
bankable projects for the private sector that are aligned with the countries’ nationally determined contributions (NDCs). Meanwhile, development partners, multilateral development banks and financing institutions have a key role to play. First through providing technical support to upgrade national institutional capacities and advance the investment landscape. More importantly, they can push forward private sector engagement through concessional funds that are used for blended finance and grant elements to de-risk private sector investments and create first loss positions vehicles to improve portfolio ratings in developing countries. The role of development partners is thus indispensable in supporting projects’ preparation phases to attract needed private capital. As for foreign investments, they rarely find their way to emerging markets or developing countries due to their weak credit ratings at B or below, which represents a higher level of risk. Similarly, multilateral development banks are keen on keeping safe
holds a PhD and MA in Economics from the University of Maryland, College Park, USA, and a BA in Economics from AUC. She completed executive
education at the Kennedy School of Government, Harvard University and the Saïd Business School, Oxford University.
Developing countries need to invest an extra US$800bn per year on climate mitigation according to the World Economic Forum
and high ratings themselves, and therefore avoid supporting investments in
low-rated countries. As a result, it is essential to develop mechanisms to encourage MDBs and philanthropies to crowd in foreign investments and
to drive more focus on mobilizing additional capital, allowing institutional investors to become key players. This in return calls for promoting long-term partnerships with the business community to collaborate with governments and MDBs. Blended finance is therefore very significant in order to generate the needed funds. In fact, blended finance, which is centred on combining commercial banks’ resources or bond markets with concessional funds of development partners, has been in discussion since the Addis Ababa Agenda for Action, adopted in 2015. However, little has been achieved so far as it is estimated that less than 2 percent of total official development
assistance is actually raised in the private sector, and almost only 1 percent of that is through blended mechanisms.
technical capacities.
The success of catalyzing additional financing through blended mechanisms is dependent on the interplay and complementarity of all stakeholders’ efforts. Governments can be a starting point as they can create a conducive, secure and predictable investment environment through policy and regulatory frameworks and strengthening the role of institutions. This will, in turn, help create the markets that can accommodate green projects and develop pipelines of
A conducive environment is a well-informed one When mapping the landscape of climate financing needs for climate action, there is a growing demand for the availability of reliable and updated data. Clear information is a prerequisite for endorsing targeted policies, building trust, and supporting a private sector- led development approach. It is imperative that all stakeholders have a clear understanding of the opportunities, challenges and risks of
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