How much private finance was mobilised by Dutch public interventions for development aid and climate in 2015-2020?

The Paris Agreement emphasises the role of developed countries to take the lead in mobilising climate finance from a wide variety of sources, including private sources. The mobilisation of private finance through public interventions is needed to make financial flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.

For the sixth year in a row, Trinomics has supported the Netherlands Ministry of Foreign Affairs in the measurement and reporting of mobilised private finance.

The Dutch government will use the outcomes of this report for several reporting mechanisms: (1) the Annual Report of the Homogeneous Group of International Cooperation (HGIS), which presents the Dutch public expenditures for international cooperation, (2) the reporting to the OECD on private finance mobilised for development, (3) the reporting to the EU under the Monitoring Mechanism Regulation, and (4) the reporting to the UNFCCC in the National Communication.

In 2020, the figure of mobilised private biodiversity finance was included for the first time in this assignment. It may possibly be used for reporting of the Dutch efforts to finance international  biodiversity under the Convention on Biological Diversity (CBD).

In our analysis, we applied the international recognised OECD methodology to attribute the correct shares of financial streams to the Netherlands to avoid double counting of private flows. We analysed the different financial instruments as distinguished by the OECD: guarantees, syndicated loans, direct investments in companies, shares in collective investment vehicles, credit lines, grants and loans.

Aside from analysing and reporting on the amounts mobilised, we critically reviewed the OECD methodology. As such, our main recommendations are twofold: they include options to improve the reporting of the Netherlands on mobilised private finance, and considerations regarding the methodology of the OECD. The Netherlands Ministry of Foreign Affairs can use these methodological considerations to feed the international debate on the developments of the mobilisation of private (climate) finance.  Moreover, the assignment included a capacity building component for the implementing organisations of the Ministry to train them in the reporting of their private mobilised financial flows.

The key outcomes of the project are:

  • An analysis of the amounts of private finance mobilised by Dutch public interventions for climate, biodiversity and development.
  • A critical review of the existing methodologies to measure the mobilisation of private finance.
  • A guidance note for reporting report on private finance mobilised through public interventions by making use of the OECD methodology and the accompanied supplementary file (Excel template for reporting).
Categories: Climate Change, Climate Change Policy and Strategy, Climate Finance