With an annual investment of US $ 2.3 trillion, the new network of development banks could give sustainability initiatives a huge boost.
The Kreditanstalt für Wiederaufbau (KfW) is well known and well suffered in Germany. Customers receive discounted loans or other forms of investment support, and politicians have a practical vehicle to free up appropriate funds for politically opportune projects. In terms of total assets, KfW is Germany’s third largest credit institution. This gives a feeling of the forces that arise and the flows of money that could be directed in certain directions if promotional banks got together.
This is exactly what is happening. A summit of financial actors took place this month, simultaneously addressing the Covid-19 crisis, the fight against climate change and the achievement of the sustainable development goals. The Finance in Common Summit, held online during the Paris Peace Forum, brought together the world’s 450 public development banks (PDBs) for the first time. The firepower behind this banking group is enormous: they have $ 11.2 trillion in total assets and $ 2.3 trillion in investment loans every year, as our “Chart of the Week” shows. This corresponds to around a tenth of all publicly or privately granted investment loans per year.