World Bank President Ajay Banga has suggested that private capital and corporate social responsibility funds will be needed to provide debt relief to low-income countries and to fight climate change. The comment comes after a panel appointed by the Indian presidency of the G-20 estimated that $3 trillion per year is required until 2030 to address various issues such as debt relief for low-income countries and combating climate change, as per a report by Bloomberg.
It also said that out of this amount, approximately $1 trillion needs to come from external financing, with an equal contribution from development financing and private capital.
“The money we need for renewable energy resources is in a trillion dollars. We cannot pool such a huge amount with the government’s help. We need to involve the private sector,” World Bank President Banga said talking to reporters on Tuesday, as reported by ANI.
#WATCH | The money we need for renewable energy resources is in a trillion dollars. We cannot pool such a huge amount with the government’s help. We need to involve the private sector: Ajay Banga, World Bank President pic.twitter.com/MGf35IyYU9
— ANI (@ANI) July 19, 2023
“Some of the jobs in India will come in the manufacturing sector, service sector, and more… India is working on generating more and more jobs for its youth,” he further said.
Earlier in an interview with Bloomberg, World Bank President Ajay Banga said that various efforts are being made to address the funding gap for global challenges. These efforts include the utilisation of hybrid capital instruments and a portfolio guarantee program, which could allow sovereigns to assume risk and attract more private investment for poorer nations.
Banga said that a single dollar of hybrid capital could unlock lending worth $6 billion to $7 billion over a decade. Private investment in bank-supported projects and direct contributions to the bank are also being considered, with potential backers including philanthropies and socially responsible companies in India and elsewhere. The aim is to explore all avenues creatively to unlock capital and make a positive impact.