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💸 Investing in Development around the World

My Climate Journey

Photo by Etienne Martin / Unsplash

Table of Contents

Host: Jason Jacobs
Guest: Jake Levine | Chief Climate Officer | U.S. International Development Finance Corporation (DFC)
Category: 💸 Funding

Podcast’s Essential Bites:

[4:09] “When you look at the projected future emissions of the world, 95% plus is expected to come from outside the United States. And at the same time, we're deeply under invested from a climate perspective in markets outside the US, outside Europe, developing economies, emerging markets. So it's a big task.”

[4:55] “If you look around the world and you look at […] basic indicators - population growth, economic growth, trade - you see dramatic growth in emerging markets generally speaking, Indo Pacific, Latin America, Sub Saharan Africa. Whereas in developed economies like the United States and many of our European trading partners, population growth is flatter or declining. There are greater […] efficiencies in terms of our technology, demand for electricity is flat or declining. So, projecting out into the future it makes sense that that's where you're also going to see a rise in emissions. And then there are a handful of key places where countries are continuing to heavily invest in fossil fuel technology, particularly in the power sector, China, India, South Africa, Indonesia, where you see new coal plants being built and brought online. And at the same time, many of these markets are […] also experiencing enormous growth in clean energy technologies, in industrial decarbonisation, and transportation decarbonisation. And so we do have an opportunity to flip that growth trajectory. But we also have a risk of baking in a lot of carbon intensive assets and projects if we're not aggressively working right now to de- risk and provide financing for those alternatives.”

[6:47] “The DFC [is] the newest federal agency on the scene. We're about two years old. […] We were created by a statute called the Build Act, which is focused on development, and to some extent on the way that US investment overseas can be used as a tool for diplomacy and foreign policy. And I came in as the first chief climate officer at DFC, which means that I sort of sit between the administration's strategic approach on climate, on development, on foreign policy and the way that that plays out in our transactions.”

[7:37] “The way that you could think about DFC is basically as an American Development Bank. We have an investment cap of $60 billion, we've got about $32 billion committed at the moment. This year, we had a banner record year, we committed $6.7 billion of new projects. And every year, we see about $4 [to] 4.5 billion coming off of our books. So it'll take us a number of years to get up to the $60 billion cap. And we do that through a variety of financial tools, whether that's debt financing, equity, technical assistance, we provide key tools for de-risking projects and markets, like guarantees and insurance. And when you look at […] the mix of climate needs in the market, whether it's a mitigation project, say a solar and storage plant in a risky market, where there may be […] offtake risk or political risk, or if you're looking at an adaptation project to help make infrastructure more resilient to the types of impacts we're already seeing, DFC has a really important role to play in providing some of these key financial tools to get capital invested in these projects and markets.”

[12:30] “I think for a long time in the international context, […] climate investing has been synonymous with basically renewable energy and within that, essentially solar. And one of the things that has been so rewarding about the last seven or eight months that I've been in this role is working to really expand our definition of what does it mean to be doing a climate linked investment, and thinking about other interventions also in the power sector, so not just solar, but also storage and baseload reliability and firm power for the grid, that is also zero emission based.”

[29:45] “Part of my goal […] down the road is to be able to look back and say that we really diversified our pool of borrowers and clients. And so we're working closely with the leading private sector financial institutions in climate to do that. And that means talking all the time with leading funds. We've seen so much capital move into this sector and the various asset classes that are focused on climate and infrastructure. And so much of that capital is focused on North America and Europe. And so a lot of what we're doing is we're reaching out to the big funds, […] we're talking to the tech corporates like Stripe Climate, and the major technology companies out there, whether that's a Microsoft or an Apple or Google to learn more about where are they interested in potentially moving their projects into emerging markets and how can we help to facilitate that.”

Rating: ⚡⚡⚡

🎙️ Full Episode: Apple | Spotify (Original Title: "Jake Levine, Chief Climate Officer at the U.S. International Development Finance Corporation")
🕰️ 46 min | 🗓️ 01/03/2022
✅ Time saved: 44 min

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