Mohieldin: Stimulus Plans, Private Sector Effectively Contribute to Financing Development Action

Dr. Mahmoud Mohieldin, UN Climate Change High Level Champion for Egypt and UN Special Envoy on Financing 2030 Sustainable Development Agenda, said that SDGs Stimulus called for by UN Secretary General Antonio Guterres, as well as the effective participation of the private sector, would contribute significantly to financing and implementing development action.

This came during his participation in a session entitled “SDG 9 in middle-income countries: accelerating the achievement of the 2030 Agenda” within the events of 2023 HLPF.

Mohieldin stated that middle-income countries (MICs) are struggling to finance the SDG 9 of promoting sustainable industries, supporting innovation and creating more resilient infrastructure, especially with the global permacrisis that includes the Corona pandemic, the war in Ukraine and the negative effects of these crises on the economies of developing countries in particular.

Mohieldin emphasized that SDGs Stimulus would increase the funding allocated to achieve these goals by at least $500 billion annually, explaining that they include short-term financing plans to deal with emergency situations, in addition to long-term plans for sustainable development financing.

He pointed out that these plans ensure reducing the cost of debt and preventing developing countries and emerging economies from sliding into debt distress, mainly by converting short-term borrowings with high interest into long-term debt that extend up to 30 years at lower interest rates.

He added that the plans scale up affordable long-term financing, especially through MDBs, by increasing hybrid capital, rechanneling SDRs and maximizing benefiting of private finance, as well as expanding emergency financing to countries most in need by integrating state contingency and disaster clauses into all lending operations.

Mohieldin emphasized that the private sector plays an important role in financing sustainable development and filling financing gaps, stressing that developing a new approach to better leverage private finance is required. This approach should focus on the development impact of projects rather than bankability, and use structures where both risks and rewards can be shared fairly.

He also confirmed the necessity to involve the private sector in all debt resolution mechanisms in developing countries.

I’m another event, Dr. Mahmoud Mohieldin said that significant efforts are being made to mobilize finance just transition.

This came during his participation in a session entitled “Just Transitions for All: Achieving Climate and Social Justice”, within the events of 2023 HLPF.

Mohieldin stated that despite the progress made since the launch of the Global Accelerator in September 2021, social protection financing has faced significant challenges in the past two years due to the economic repercussions of the coronavirus pandemic, the war in Ukraine and other crises.

At the same time, he pointed out that there is an opportunity to ensure that finance is directed towards the Global Accelerator through SDGs Stimulus launched by United Nations Secretary General Antonio Guterres, which call for increasing investments to achieve the SDGs and just transitions, including social protection and the creation of decent jobs.

Mohieldin explained that the SDGs Stimulus aim to increase the finance allocated to achieve these goals by at least $500 billion annually in the form of concessional and long-term financing, especially through MDBs, while expanding contingency financing to include the countries most in need.

Mohieldin emphasized that the private sector can play an active role in SDG Stimulus plans by involving it in any debt resolution processes in developing countries, explaining that these plans call for a new approach that ensures maximizing benefiting from private finance while focusing on the development impact of projects and sharing the risks of their financing.

He pointed out that there is an opportunity to channel resources to finance just transitions through the reorientation of SDRs, including through the IMF’s Resilience and Sustainability Trust (RST), adding that SDRs can also be channelled through other bilateral means outside the PRGT or the RST.

In this context, Mohieldin called on the ILO and other international organizations to increase their bilateral engagements with member states to secure their commitments to social protection and achieve just transition.

He said that a number of MDBs have initiatives to channel SDRs to ensure the flow of reserves to the areas of employment and social protection, pointing out the possibility of linking investments directed to social protection to the Global Accelerator, and activating the role of related entities in this regard, including the GCF.