The PIDG is already ahead of the curve in setting its agenda for COP27, and has been busy over the past few years formalising its intent to take action on climate change mitigation in line with its values. Key to this has been the inaugural PIDG-TCFD report, published in 2021, far ahead of the UK government deadline to begin reporting in April 2022.
Implementing the climate change strategy requires a clear governance and strategic framework. The PIDG Climate Change Governance Structure is shown below.
The PIDG Climate Change Framework and Strategy
The countries that PIDG invests in have some of the lowest historic and current per capita emissions of greenhouse gases (GHGs) in the world – yet they are the countries that are the most impacted by the changing climate. Developing new infrastructure that is resilient enough to withstand the inevitable changes in climate over the coming decades is critical to achieving lasting impacts.
Rapid population growth and urbanisation create the challenge and opportunity to plug the significant infrastructure gap in innovative ways.
PIDG is committed to demonstrating the technical and financial viability of innovative climate resilient infrastructure that contributes to a transition to global net zero.
PIDG recognises that new infrastructure is associated with increased GHGs in both the materials used to construct, for example, buildings, transport facilities and power plants, and in using the infrastructure once it is in place.
Further, the typically long lifetime of infrastructure assets means that there is a risk of ‘locking in’ carbon intensive infrastructure for decades to come. The PIDG climate strategy therefore focuses on the opportunities for accelerating the transition to net zero in the countries in which it operates through the development and financing of innovative low carbon, climate resilient and inclusive infrastructure, supporting these countries to leapfrog and replace the highest GHG emitting technologies.
Developing greenfield infrastructure in the most difficult markets, where it matters most to sustainable socio-economic development, should be a deliberate focus of climate finance for an equitable and just transition. This work is at the core of PIDG’s mandate.
Long-term debt, early-stage equity, guarantees and local currency solutions, technical assistance and viability gap funding will be key ingredients to achieve scale, replication and market transformation in this regard. PIDG has a strong track record as a ‘market maker’ and innovator in the sustainable infrastructure space, particularly in renewable energy as set out in the case studies.
Whilst PIDG might not remain involved in a project for its full lifetime, it takes a long-term view of potential investments, considering potential policy and market changes as well as a changing climate to mid-century.
By developing sustainable and viable projects in these markets, PIDG believes it will enable further climate finance to be unlocked, enabling countries to transition more quickly to net zero at the same time
PIDG supports Africa’s opportunity to set the agenda for the global policy debate at COP27
Despite the challenges, the UN Secretariat contends Africa has made great efforts in driving the global climate agenda. This is demonstrated by the very high levels of ratification of the Paris Agreement – over 90%. Many African nations have committed to transitioning to green energy within a relatively short time frame. Clean energy and agriculture are, for example, prioritized in over 70% of African national development plans.
COP27 is just a few months away, and it is important to ensure that all countries can participate equally given the disparities in emissions, and especially because the pandemic presents new inequalities in participation. African countries and companies have an opportunity to exercise their policy muscles as norm-makers in global policy collaboration on this stage.
PIDG knows that the scale and urgency of the climate emergency means that there is much more to do, and looks forward to working with all its stakeholders including owners, sponsors, staff and the wider PIDG community to accelerate progress towards the goals of the Paris Agreement.