The FICS Coalition for Social Investment launches a working group on harnessing the social impact of Public Development Banks financing for just transitions

On 20 March 2024, twelve Public Development Banks (PDBs), UN agencies (ILO, UNDP, WHO), the European Commission’s Directorate-General for International Partnerships (INTPA), and other development partners met to inaugurate the Working Group on Harnessing the Social Impact of PDBs financing for just transitions. 

This working group was launched by the FICS Coalition for Social Investment (established under the umbrella of the Finance in Common global network of over 520 Public Development Banks and co-led by the Council of Europe Development Bank and the Agence Française de Développement) with the support of the UN Global Accelerator on Jobs and Social Protection for Just Transitions. It aims to increase PDBs’ contribution to just transitions through increased social investments and increased social impact of PDBs investments. 

During its inaugural meeting, the working group discussed concrete possibilities of where PDBs can collaborate and support country roadmaps, starting by identifying entry points at country level.  

In Global Accelerator pathfinder countries, PDBs can support governments’ strategies to create decent jobs, formalize enterprises and employment, extend social protection, and promote economic, digital, green, and demographic transitions that are just and inclusive for people. For instance, a representative from the Development Bank of Rwanda highlighted the importance of promoting decent job creation as a focus of their operations, especially in agriculture and the green economy.  In addition, a representative from the Asian Development Bank remarked on the potential of policy-based lending to support macro-fiscal reforms that also cover social protection and pension system reforms. As an illustration, mentioning the ongoing Just Energy Transition Partnership dynamics in South Africa, Indonesia, Vietnam, and Senegal, a representative of AFD emphasized the relevancy of initiatives such as the FICS coalition. Massive social investments are indeed more than ever needed so as to make the energy transition happen as fast as possible, namely by anticipating and mitigating potential induced inequalities and even more by ensuring a fair distribution of the dividends of such a transition among concerned stakeholders.

Conducting joint research to develop evidence on the PDBs’ contribution to the SDGs and social progress is another of the priorities of this joint initiative, in connection with the FiCS Global Research Network and other fora.  

The Working Group on Harnessing the Social Impact of PDB financing for just transitions is the result of multilateral discussions that started during the 2023 Finance in Common Summit in Cartagena, Colombia. These discussions showed that building cooperation between PDBs and countries could increase the social impact of PDBs’ investments, contribute to more inclusive and sustainable economic development, facilitate just transitions, and support national strategies to extend social protection and promote decent job creation.  

As next steps, the group agreed to prepare projects to support the country roadmaps in at least two countries in 2024 and to progress on a joint research agenda. The group aims to present some of the results from these activities at the 2024 Finance in Common Summit that will take place in China in October. 

The Working Group will meet regularly to ensure that PDBs are connected to the implementation of country roadmaps in the Global Accelerator pathfinder countries. The Public Development Banks that were part of the inaugural meeting were: Asian Development Bank (ADB), Agence française de Développement (AFD), African Development Bank (AFDB), Cassa Depositi e Prestiti (CDP), Council of Europe Development Bank (CEB), Development and Investment Bank of Turkey (TKYB), European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Interamerican Development Bank (IADB), International Fund for Agricultural Development (IFAD), Islamic Development Bank (ISDB), Rwanda Development Bank (BRD).