Public-Private Partnerships Key to Achieving COP26 Goals

Ahead of the UN Climate Change Conference COP26 in Glasgow next week, Agris Director Ed Stiles shares his thoughts on how operationally-focused private investors like Maris can help deliver COP26 goals.

COP26 Goal 3 Mobilising Finance: developed countries must make good on their promise to mobilise at least $100bn in climate finance per year by 2020. International financial institutions must play their part and we need to work towards unleashing the trillions in private and public sector finance required to secure global net zero.

Rich countries have so far failed to deliver the $100bn per year that was promised to help the developing world cope with climate change. Public climate finance simply isn’t trickling down fast enough to those of us on the ground who need to de-risk environmentally and socially impactful projects that do not generate appealing returns for traditional investors. 

More Trees Anyone?

Equatoria Teak Company in South Sudan, manages over 2,200 hectares of teak plantations, within a 25,000 ha concession. We have planted over 2 million new trees and in 2020 started a coffee outgrower project – Excelling in Excelsa – to provide employment and incomes for more than 1000 local small-scale farmers. ETC clearly contributes to securing global net zero by mid-century, keeping 1.5 degrees within reach (COP26 Goal 1) and adapting to protect communities and natural habitats (COP26 Goal 2).

As an established presence in the area, with deep operational experience, we are the ideal partner to help create more employment within climate friendly activities. We are regenerating degraded ecosystems and protecting indigenous forests – and could do more with the right finance. We are prepared to be 100% accountable for the investment, the social and environmental impact would be huge, but there should not be the expectation of a significant financial return.

Operating in South Sudan is challenging. Decades-long violence has left the population in extreme poverty and undermined the rule of law. Forests are under threat from slash and burn agricultural practices and a lack of legislation to protect forests enables the ongoing poaching of plantation timber and indigenous trees.

Establishing projects in a hostile operating environment like this is complex and expensive and will not deliver favourable returns, at least in the short or medium term.

Carbon credits seem to have potential, but reaching the point of accreditation is complex and expensive. The upfront costs of designing and implementing a project that might be eligible for carbon credits is prohibitive, the financial return marginal and uncertain. Forestry projects take a long time to generate income that can be used to support ancillary activities – trees don’t mature overnight.

Public- Private Partnership Mindset Change

Public-Private Partnerships COP26

Excelling in Excelsa diversifies the business while the teak matures and will revive local coffee growing – once a thriving sector. It is part funded with donor finance, in line with COP26 goal 2:  in addition to creating new employment, the project helps farmers achieve higher returns from the same piece of land thereby encouraging them to stop slash and burn.

Across the continent there is huge potential for businesses like ETC to deliver these ‘bolt-on’ projects, quickly and with almost immediate impact. But time and again I hear private sector colleagues complain about working with publicly-funded institutions, who are unfamiliar and overly cautious about engaging with the private sector and seem to lack urgency. Where businesses can access public money there are often delays, setting projects back, and jeopardising relationships with local communities when they don’t get what has been promised.

COP26 goal 4 is to work together to address the challenges of climate change. There shouldn’t be the fear of people and companies making profit, because this is primarily what’s required for them to be sustainable. 

When PPPs do get off the ground they of course must be properly monitored and audited, but private businesses simply cannot cope with burdensome bureaucracy and unnecessary delays, especially in markets that are already difficult to operate in. Red-tape and paperwork should not be a reason for climate finance failing to reach the places where it’s most needed.

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