UN economic commissions call for innovative finance to combat climate change

Mexico City, Mexico, 24 October 2024 (ECA) - As countries battle multiple environmental, social and financial crises, experts have emphasized the need for innovative financing mechanisms to combat climate change and accelerate sustainable development.

An Interregional Expert Group Meeting on Innovative Financing Instruments for Climate Action and Sustainable Development held in Mexico City, highlighted the urgent need for financing in developing countries which are battling with growing challenges.

The meeting brought together representatives of the United Nations Economic Commissions for Africa (ECA), Latin America and the Caribbean (ECLAC) and Western Asia (ESCWA), including 30 participants from regional commissions, multilateral institutions and experts from ministries of finance and planning.

In his opening remarks, Acting Director, Climate Change, Food Security and Natural Resource Division at ECA, Nassim Oulmane, said the triple crisis of - economic instability, climate change and rising social inequalities has created unprecedented challenges for nations worldwide, particularly in Africa.

"This requires mobilizing substantial financial resources through innovative instruments," Mr. Oulmane emphasized.

During a panel discussion on "Innovative financing instruments for mobilizing affordable finance to address the triple crisis and accelerating sustainable development" participants explored different innovative financing instruments. These included debt swaps, blended finance and thematic bonds such as green and blue bonds as well as sustainability-linked bonds.

Mr. Jorge Mario Martínez, Acting Director, Subregional Headquarters in Mexico for ECLAC and Mr. Niranjan Sarangi, Senior Economic Affairs Officer at ESCWA agreed that their interregional forum will benefit from shared experiences in harnessing innovative financial instruments for climate action.

The meeting was an opportunity to review policies and measures taken in Latin America, and to present the work of the ECA on innovative finance to support resource-based industrialization in Africa. The discussions underscored that climate action is compatible with industrialization and development master plans.

In a panel discussion on the "Roadmap to strengthen sustainable financing frameworks", Jean-Marc Kilolo, an economist at the Macroeconomic, Finance and Domestic Resource Mobilization Division at ECA, outlined the key steps for deploying innovative financial markets in Africa. Mr. Kilolo emphasized the importance of developing capital markets, especially at the regional and subregional levels to leverage economies of scale and scope.

Mr. Kilolo also stressed the need for improved sovereign credit rating and governance and the capacity building for institutional investors and individuals to foster market confidence and mobilize private domestic resources.

Issued by:
Communications Section
Economic Commission for Africa
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