The G20 leaders unanimously ratified the G20 Bali Leaders’ Declaration acknowledging the need for the Global Blended Finance Alliance (GBFA) to serve as a global community of support to accelerate investment in climate action and sustainable development.
“Synergy between Governments and Private Sector will be a game changer, and last year in Bali G20 Indonesia has initiated the Global Blended Finance Alliance….The Just Energy Transition Partnership scheme that must be expanded and enlarged…
A global standard is needed such as taxonomy to prevent greenwashing practices, and Multilateral Development Bank & Reform must reflect representation of its member countries.
We should all walk the talk because we only have one Earth.”
President Joko Widodo
Republic of Indonesia
G20 New Delhi 2023
Extracts from the G20 Bali Leaders’ Declaration on Global Blended Finance Alliance
The G20 Principles to Scale Up Blended Finance in Developing Countries, including Least Developed Countries and Small Island Developing States
#3. Promote optimal operationalization and delivery of blended finance in developing countries, including LDCs and SIDS.
“……….. This includes the support of dedicated global institutions, including Multilateral Development Banks (MDBs) and the role played by philanthropies, to engage a wide set of actors and build a global community of support. We acknowledge the proposed initiative by the Government of Indonesia on the Global Blended Finance Alliance that could serve as a global community of support to accelerate investment in climate action and sustainable development.”
D. Financing for Development
Establishment of the Global Blended Finance Alliance (GBFA) (Indonesia, OECD)
The GBFA, to be launched on the margins of the G20 Summit, will seek to fill the SDG Funding Gap, through interested financing stakeholders and to implement the G20 Blended Finance Principles, developed in the G20 DWG, across relevant sectoral areas. Various sources of funding, including governmental and multilateral organisations, philanthropies and foundations, and the private sector are considered for the GBFA.
14 November 2022: The G20 Bali Global Blended Finance Alliance by the Government of Indonesia with partners and friends including the Blended Finance Taskforce, the B-Team, GFANZ, UN SDSN, WRI, the Rockefeller Foundation and the United in Diversity Foundation.
At the margin of the G20 Bali Summit in November 2022, the G20 Bali Global Blended Finance Alliance was launched at the Signing/Witness Joint Statement with Non-Government Partners Ceremony witnessed by Indonesian ministers, H.E. Luhut B. Pandjaitan, Coordinating Minister of Maritime Affairs and Investment, H.E. Siti Nurbaya Bakar, Minister of Environment and Forestry, H.E. Basuki Hadimuljono, Minister of Public Works and Public Housing, and H.E. Syahrul Yasin Limpo, Minister of Agriculture of Indonesia. The Ceremony was participated by international and national organisations including the Green Climate Fund, the OECD, Conservation International, Konservasi Indonesia, the Global Steering Group, Systemiq, Blended Finance Taskforce, the B-Team, GFANZ, UN SDSN, World Resources Institute, International Chamber of Commerce, United In Diversity Foundation, Pegasus Capital Advisors, ADM Capital, Capcade, PT SMI, BlackRock, Arnold & Porter, the Asian Development Bank, the Khemka Foundation and others.
VISION
To build a global community of support to fill the SDG Financing and Knowledge Gap
MISSION
G20 alignment including principles on blended finance to develop and scale climate and sustainable solutions in developing countries, LDCs and SIDs, engaging multi stakeholders and future knowledge for Better Business Better World
The G20 Bali Global Blended Finance Alliance (G20 Bali GBFA) is a new international organisation designed to unlock investment in climate action and the Sustainable Development Goals (SDGs) by helping scale & replicate blended finance solutions for the Developing Countries, including Least Developed Countries and Small Island Developing States.
(PLEASE CLICK PRESENTATION BELOW)
Initiated by the Government of Indonesia, and envisioned to be headquartered in Bali, the G20 Bali Global Blended Finance Alliance will work with partners to strengthen the blended finance ecosystem and fill market gaps in the following ways:
Facilitate Policy Development
Support the policy development for common tools, standards and instruments that are aligned with the needs of developing countries, LDCs, and SIDS to enhance blended finance implementation. Build on the foundation of the G20 “Blended Finance Principles”, “MDB Capital Adequacy Framework”, OECD DAC Principles, and “Tri Hita Karana Roadmap on Blended Finance” recommendations to inform actors on Blended Finance, and modernize the development finance system.
Accelerate South-South Collaboration
Support emerging markets governments and national/regional development finance institutions (e.g. DBSA, BNDES, PT SMI, FDN, IDCOL, InfraCo etc.) to share approach to negotiating country financing packages (e.g. JET-Ps, blue bonds) to align on optimal negotiating positions, and ensure climate finance is designed and deployed in a way which is fit for purpose.
Capacity Building, Knowledge Sharing and Best Practice Capacity Building, Knowledge Sharing and Best Practice
Convening for impact to drive system leadership and mindset shifts for all stakeholders. Develop capacity building, training, best practices, and blueprints for key blended finance mechanisms with expert partners like Convergence, the Blended Finance Taskforce, the OECD in ensuring transitioning economic sectors are equipped with fit for purpose capital solutions.
Private Sector Engagement
Facilitate engagement and collaboration across government, development institutions, civil societies with business and investor to foster trust, good practice, support transparency, align understanding of blended finance, to reduce perception of risk, and accelerate pipeline development, especially for developing countries unfamiliar with blended finance concept.
Data & Standardisation
Work with governments and national/regional DFIs to standardize blended finance structures, reporting and data availability to build transparency & reduce the perception of risk, making it easier to engage private sector and reducing transaction costs.
New Partnerships
Facilitate new financial partnerships (e.g. with philanthropy or sovereign wealth funds) and accelerate and scale pilot solutions, leveraging the expertise of MDBs, bringing the private sector in early and optimizing the capital structure to increase capital mobilization and impact. Pilot & scale fit-for-purpose financial solutions which are capital efficient and foster new public-private-philanthropic partnerships & engagement with key stakeholders including civil society
The G20 Bali Global Blended Finance Alliance builds on Indonesia’s sustainable finance track record to ensure other countries can scale and replicate what works.
SDG Indonesia One
SDG Indonesia One is a first-of-its-kind integrated blended finance country platform to support large-scale sustainable infrastructure projects in Indonesia. Under PT SMI, it raised over US$3.5 bil and deployed a third into projects like clean energy and water, waste management, low carbon and transport. (Namibia is now looking to replicate this structure)
Just Energy Transition Partnership (JETP)
Launched a US$20 bil JETP with IPG and GFANZ on blended finance commitment to drive a just energy transition from coal plant to renewable energy through reduction in transaction costs, ensuring fit for purpose approach and demand driven including principles around additionality, transparency, civil society engagement, investment planning, streamlining process while supporting an energy.
Blue Halo S
Launched the Ocean 20 and Blue Halo S to advance blue ocean economy as well as protecting and restoring marine ecosystems using blended finance structures for coral reefs and marine protected areas.
G20 Principles on Scaling Blended Finance
Indonesia with partner OECD and WEF launched the 2018 THK Roadmap on Blended Finance and the OECD DAC Principles, which provides the basis for informing the G20 Principle on Scaling Blended Finance for developing countries.
Becoming a member of the G20 Bali Global Blended Finance Alliance
The G20 Bali GBFA will be organized as an international organisation with founding members who help set the direction of the institution and support its implementation. The process of joining G20 Bali GBFA, also called accession, has the following two main steps: accession Letter of Intent (LoI) and ratification to the Article of Agreement (AoA).
