Hi everybody, and thanks for joining me. It’s a pleasure to be here, and I hope that my responses on this interview will be helpful for you in thinking about overall questions on the green economy across Africa, and what an event like AGES is able to do to help to drive the thinking forward.
So a little bit of background on myself. My name is Jeremy Gorelick. I’m the senior strategic advisor at the Green Finance Institute (GFI). I’ve been with GFI since 2020. I’m an ex-investment banker, and I’ve been responsible for helping to raise over U$7.1 billion for sustainable infrastructure, mostly for subnational investments over the past two decades.
I started my career working on Wall Street and have had the pleasure of working with some of the world’s largest banks, but also have recognised that part of the work that I do is not just around the mobilisation of capital, but also on helping to make sure that projects are appropriate and correctly placed to make sure that we have the maximum type of impact.
I was lucky, after my, stint on Wall Street, to be able to work with some of the world’s largest foundations, donor agencies and development finance institutions. In addition to the main professional work that I do, I’m also somebody who has strong academic interests, mainly at the intersection of climate finance, city finance, and always with a focus on developing countries and emerging markets.
I received a doctorate from the University of Cape Town with a focus on exactly this topic, and I have been very lucky that I’ve been able to apply my learning and my passion in a way that has been able to result, like I said, in the mobilisation of over $7.1 billion.
Within the Green Finance Institute, I kind of have a role of being a jack of all trades. So, I lead on a number of diverse work streams, including the creation of a guaranteed facility for subnational climate smart infrastructure, which at the GFI we affectionately call GF-squared, which is short for the Green Finance Guaranteed Facility.
In addition to that, I’ve been at the forefront of the exploration of opportunities in countries with big roles to play in regional climate leadership, for example, South Africa and Sub-Saharan Africa, which is where I’m based, Brazil and Latin America, and Indonesia in Southeast Asia.
As I said, I have been with the Green Finance Institute since 2020. Within the past 5 years, I would say that my crowning achievement during my time at the Green Finance Institute has been in the advocacy for and the development of the Greater London Authority’s Green Finance Fund. This is a fund that we helped the Mayor of London launch in June of 2023, and we worked on that from roughly the end of 2020 until mid-23.
The goal was to create a fund with an initial capitalisation of £500 million targeted at dispersing funds to clean transport, energy efficiency and renewable energy—those being three of the largest areas that are both within the remit and mandate of London, but also the ones that would have the most significant climate impact.
In addition to the design of the facility and the confirmation of a strong pipeline, I’ve also had the luxury of sitting as, initially a provisionary and now, a permanent member of the investment committee, which has meant that I’ve been able to help to make sure that we are putting money towards the right kind of projects and really scrutinising and doing the appropriate due diligence to make sure that this works.
It’s something that we’ve been able to look at within the GFI as far as opportunities to scale this up both within England, within the United Kingdom, but also to be able to look at the potential applications across Europe, looking at how this might be able to augment existing programmes in North America, and again, for my passion, how this could be something that plays out in Sub-Saharan Africa, in Latin America, and South and Southeast Asia.
Who are your partners?
Within the GFI, we work with a diverse range of stakeholders. We’ve been set up with a clear mandate to sit at the intersection of private finance and public policy. This is the mandate that we had when we were initially established in 2019 on the back of the Green Finance Initiative that was created by several key stakeholders across the UK, but mostly being national and sub-national players, including the City of London.
We often play a convening role where we test new ideas that we have designed in response to some of the most pressing challenges of mobilising finance for climate change. We work with a mix of global and local players.
So if you’re listening to this and you feel like working with the GFI would be exciting because you have global mandates, and are trying to achieve things at a global scale, we’d be happy to speak with you, but we also, and I would argue, are most effective when we work within a particular country context. Largely because we always have a view towards appropriate contextualisation of ideas for a given jurisdiction.
When we try to imagine what this looks like, it means that we’re working with national government to help them to maybe either introduce new policies or figure out how to embed and institutionalise those policies in a way that makes sense.
But likewise, we work with the private sector players to make sure that they know how to introduce those policies in a way that makes sense for them, both from an impact perspective, but also appreciating that for most private sector players, profitability is key. And we don’t want to be in a position that we’re recommending something that ultimately erodes the interests of their stakeholders, who are often the shareholders looking for that return on whatever investment is being made.
Within the concept of Africa and what Africa can do, I think that we need to recognise the fact that the continent is in a position that we will see continued rapid urbanisation. And depending on where you look, by 2050, there is anywhere from 30% to, I see estimates of 50%–60% of the entire continental population living in cities.
So if we fail to plan today in 2025 for what the needs are in 2050, we could ultimately get to a place that we have non-sustainable cities; we have cities that people don’t want to live in, and this almost becomes a dystopian future. So what we need to think about is, at least in my opinion, the fact that there are different philosophies when it comes to the right way to do this.
There are some who argue very strongly that we need immediate action that responds to demand-driven requests that come from both national and sub-national governments. And there’s absolutely strong merit behind that. But at the same time, there is an equally powerful argument where others suggest that a better approach might be more holistic and strategic.
Personally, I would argue that there is no one size that fits all, but instead there is a need in many cases to fold climate into a broader city strategy rather than piecemeal projects that might ultimately be abandoned.
Organisations like C40, ICLEI and GCoM are pushing for city climate action plans, which to me is again an important first step. But at the same time, for mayors, for the leaders at the subnational level who are elected, they often don’t have the patience to be able to take that long-term view.
And so the question often becomes, how do we best encourage the idea of introduction of immediate results while nonetheless looking at the idea of city climate action plans, and then likewise, making those action plans part of a strategic plan and simultaneously deliver on something? It’s often challenging to find the right balance, and yet it’s something that I think that we can’t ignore or hope that somebody else will resolve.
The other opportunity though that I see and that I’m continually struck by is the fact that cities are often operating with limited budgets, limited bandwidth and limited capacity. And so rather than continually saying that there will be the opportunity to bring in international external development partners to provide solutions, I think that we need to collectively find ways to empower cities and build their capacity to help to make sure that they themselves know how they best can deliver.
I spent five years working as the lead technical and financial advisor within the city of Dakar in Senegal from 2011 to 2016, where we worked on not only the financial solutions that were required to bring in new and sustainable capital and infrastructure and investment, but we also looked at the ways that we can help to build the capacity of people within the city, such that there was not that continuous reliance on external players, such as me as somebody who was in for 5 years but knew that I had a fixed term of involvement, or much shorter term fly-in fly-out support.
And so one of the things that I’m a strong proponent of is trying to find ways that we can help to make sure that we are designing programmes that help to empower the municipal officials and the municipal employees in such a way that the institutional knowledge gets built and remains within the cities.
I’m lucky that I’m one of the inaugural professors at the African School of Economics in their municipal training programme, which focuses on exactly this sort of capacity building. Within this programme, I’m leading on the finance work stream where we’ll be looking at what are the variety of different instruments that can be used particularly to ensure that we’re building sustainable cities.
When we look at cities, I think that we need to recognise that cities require a diversification of different funding and financing sources tied to their overall capacity to repay the project’s potential for revenue generation and a wide variety of other key factors. Oftentimes people say: “we need to find a way that we can create a capital stack”, meaning a blend of different financing sources that are able to deliver what people are looking for as cities that want to be able to bring in, again, a number of different projects that can be funded through a number of different ways.
However, I often find that the private sector funding that comes from commercial banks can be daunting for cities to look at, because there’s often a shorter tenor, meaning that the money needs to be repaid over a shorter period of time and often a higher interest rate. However, it oftentimes does not come with all of the challenges often associated with concessional finance that comes from development finance institutions.
So, I look at the private sector and particularly private finance as an opportunity to provide capital for a city to augment the own source revenue that it has, intergovernmental transfers and concessionary funds that come from development finance institutions. In addition though, and I think that there’s an important distinction that we can make, we can talk about the private sector as being private financiers, or we can talk about the private sector as being private sector service providers.
And so I would argue that we need to be looking across Africa at the municipal level, not just at the way that cities can access private finance, but ways that cities can work with the private sector such that the private sector can play a role in the provision of solutions as service providers. And we need to see more of a consistent embrace of public-private partnerships or concessions in African cities across a number of sectors.
Looking at this from the transport, from the water and sanitation perspective, from solid waste management, from housing and a number of other areas that are key and critical, we need to find ways that we can make sure that the public sector is playing the right role in enabling certain things and infrastructure where needed, but that we also see the private sector playing an important part.
To give an example, when looking at public transportation and in particular bus rapid transit, I think that a smart way that we can do this, and something that I’ve seen be successfully introduced in other regions around the world, is if the public sector is responsible for the infrastructure component.
So, making sure that the surface infrastructure is right, making sure that the routes are correct, making sure that they’re borrowing if they’re doing an EBRT system, that the charging infrastructure is there, but that we bring in the private sector to be operators of the fleets that would be on the infrastructure itself. That’s a good way to make sure that there are appropriate investments and appropriate service delivery by players who are well positioned to do whatever their requirement is.
To augment my previous answer on the private sector, I also want to highlight the role that DFIs can play either as direct investors into city projects where the money is coming in from the DFI in the form of funding or financing, such as the efforts from the French and the German government, as well as where money comes indirectly through financial intermediaries. What I mean by the role of financial intermediaries, is that a DFI is able to put its money into either a commercial or a development bank in a particular country, and that helps to achieve a number of different and helpful goals.
For the DFI, it removes the need to do detailed due diligence on what oftentimes are smaller projects than the ticket size that the DFI likes, but it also helps the domestic financial institution, that intermediary, to augment its balance sheet and to be able to better understand opportunities, potentially in sectors that it might not look at. So in many countries across Africa, even if there is a national development bank, there might not be a huge focus on opportunities at the sub-national or city level.
When we introduce money through DFI, that development bank is able to look at cities and the climate projects that cities bring forward with a new light and often with capital, which is cheaper than what it’s able to get in the open market. But this also requires another component, which is that the DFI provides not just funding or finance, but also a technical assistance sidecar that goes alongside of that credit facility, especially when we’re talking about a financial intermediary, which is critically needed, given the number of projects across Africa that have not reached sufficient maturity to absorb, deploy or repay finance from DFIs or banks.
From my perspective, an event like AGES is critical for Africa. This is a critical opportunity for like-minded people to gather to celebrate successes, but also to reflect on lessons learned from project delivery.
I personally look at the city level, but I know that across the participants at an event like AGES, there are people who are coming and representing a number of different sectors, looking at a number of different types of problems and trying to come up with the right sorts of solutions from a technical, from a financial, and in the case of ages, an environmental or a green perspective.
And so it’s exciting for me to see the fact that an event like AGES continues to get more and more people that are able to attend and is able to attract people who have a curiosity to understand what in fact is going on in the world of green and in the world of innovative thinking as far as climate and climate finance. And I would recommend that anybody who has that sort of intellectual curiosity and desire to have that, that quench for knowledge to be satiated, to attend an event like AGES, to be able to take advantage of fresh thinking and new approaches.
www.greenfinanceinstitute.com/
www.linkedin.com/in/jeremy-gorelick-66589014/?originalSubdomain=za
Contact Us
VUKA is the trusted media partner to key professionals, policy makers, suppliers and
manufacturers. We provide unparalleled opportunities for industry-wide connection.
