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Paris Infrastructure Week brought together politicians, investors, lawyers and innovators to discuss this year’s theme: how infrastructure can drive global decarbonisation.
The inaugural day on November 4 witnessed a number of panels, including a well-attended discussion featuring head of Dentons’ Sovereign practice David Syed, International Finance Corporation Director Tom Ceusters, South African government representative Boitumelo Mashilo, and project developer Christophe Dossarps.
The expert panel was tasked with teasing out solutions to the current challenges facing green infrastructure development, with liquidity gaps identified as a pressing concern.
David Syed noted the importance of working with capital markets to bridge this gap, thereby overcoming “different levels of financial sophistication and different levels of access to [financial] markets” across the developing world.
Dentons’ Sovereign practice, for example, recently supported the government of Ecuador to issue a ‘blue bond’ to private investors — leveraging its knowledge of both the state and investment community to bring the deal to fruition.
Ultimately, the deal secured Ecuador’s sovereign debt position — the South American nation had been facing high financing costs — through a commitment to protect the Galápagos Islands.
On a similar theme, the IFC’s Tom Ceusters raised the prospect of emerging market nations issuing collateralised loan obligations (CLOs), essentially a bond with three different tiers of risk, to improve liquidity. Mr. Ceusters described this product as a potential tool to foster a better understanding of risk amongst investors.
Christophe Dossarps spoke about the need for government ministries in emerging markets to align on a common approach to generating private sector investment in sustainable development.
He confirmed how far Ecuador has come in terms of its approach, as well as pointing out that more systematic data collection will allow governments to identify the most promising, viable projects in their pipelines.
As such, there was broad agreement that states must continue to reform and refine their efforts to generate private investment.
At the same time, their task is made easier by intermediaries — including lawyers and tech developers — who play a crucial role in connecting and building trust between emerging markets and those willing to finance green development.
