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DURING the recent 8th World Investment Forum, the United Nations Conference on Trade and Development (UNCTAD) issued a compelling plea, advocating for heightened efforts to direct net-zero finance toward developing economies, reports the American Journal of Transportation.
The plea underscores the critical need for capital in these regions, which hold significant growth opportunities.
The forum drew global institutions, investors, stock exchanges, investment promotion agencies, and sovereign wealth funds to Abu Dhabi to deliberate on the challenges to global sustainable development.
UNCTAD secretary-general Rebeca Grynspan emphasised that the energy transition, a pivotal component in addressing climate change, demands substantial investment.
She noted that the investment requirements in developing economies far exceed those in developed ones relative to their existing assets.
To keep global warming within 1.5 degrees Celsius above pre-industrial levels, the world must secure investments equivalent to one and a half times the global GDP by 2050.
Many feel foreign direct investment (FDI) is pivotal in this transition, particularly within the renewable energy sector. International project finance constitutes 55 per cent of total project finance values, increasing to over 75 per cent in the least developed countries (LDCs).
Nevertheless, the high cost of capital, especially in countries grappling with debt issues, presents a significant obstacle.
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