International Development Committee
Tuesday 30th June 2026
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13:08
Speaker 1
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Speaker 1
This session is part of the Committee s International Climate Finance inquiry, and we are pleased to welcome Baroness Chapman, the Minister of State for International Development and Africa, foreign, Commonwealth and Development Office. And Minister, if you would please introduce yourself and the officials attending with you.
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Speaker 2
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Speaker 2
We are completely right. Climate development, humanitarian crisis are all very increasingly, I would say, connected to climate. I was talking to a minister from Somalia yesterday. Whose primary concern is around drought and the impact of El Nino this year, and how that will affect their ability to feed the population. So this is it's it's real. It's happening now, and it's having a devastating impact, I think as the Fcdo. Um, and obviously des has come at this from their own perspective, but we do work very closely together.
It's about making sure that everything we do, um, is, has a climate focus to it and that we are mindful of the impact of climate change, but we're also looking at how we work with the insurance industry, how we build more resilience into what we do, how we not how we supporting countries to, as we've discussed on many occasions, to be able to really drive some of this themselves. And we're working very much in line with their priorities. But I mean, your initial point, I couldn't agree more.
I think you're completely right.
It's about making sure that everything we do, um, is, has a climate focus to it and that we are mindful of the impact of climate change, but we're also looking at how we work with the insurance industry, how we build more resilience into what we do, how we not how we supporting countries to, as we've discussed on many occasions, to be able to really drive some of this themselves. And we're working very much in line with their priorities. But I mean, your initial point, I couldn't agree more.
I think you're completely right.
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Speaker 3
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Speaker 3
No, I say from the business side, we take very much. It's a similar approach. And we do work incredibly closely with Fcdo. So there's an integrated approach across both departments. But um our focus is very much on how we can mobilise and catalyse much larger volumes of finance from the wider international finance system and from private finance. Um, so really focusing on the use of use of public finance for that transformative effect.
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Speaker 2
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Speaker 2
You should know what they look like because we've been publishing the trade offs, the decisions we've been making, and we've stuck to the priorities that we set around a year ago on climate, humanitarian and health being the priorities for the Oda budget. Um, there are trade offs. You know, if we had more money, we could do more. And that's just a fact. Um, but I think that when you have less money, you've got a real, there's a real onus on you to make sure that you can leverage as much additionally as you can, I think helpfully, um, the demand from partner countries for this is growing massively.
And you could say the demand is growing faster than the system's ability to meet it and that they desperately want to invest now in their energy sovereignty. But also that means renewables increasingly so. And, you know, this has been accelerated even more with the closure of the Straits and the impact that it's had on fuel prices. So we're seeing I think we're seeing a dramatic shift in the way that countries want to approach this. So our job is, yes, to provide the grant finance and the work that we do bilaterally, but it's also, I think, to work more and more closely across government with but with Defra as well on how we get those investments, how we build those projects to get them to a bankable stage, how we get the mdbs, um, to really stretch their balance sheet so that they can do more.
You know, this is about having a real sort of change in pace and scale of what we're doing to meet the demand from countries.
And you could say the demand is growing faster than the system's ability to meet it and that they desperately want to invest now in their energy sovereignty. But also that means renewables increasingly so. And, you know, this has been accelerated even more with the closure of the Straits and the impact that it's had on fuel prices. So we're seeing I think we're seeing a dramatic shift in the way that countries want to approach this. So our job is, yes, to provide the grant finance and the work that we do bilaterally, but it's also, I think, to work more and more closely across government with but with Defra as well on how we get those investments, how we build those projects to get them to a bankable stage, how we get the mdbs, um, to really stretch their balance sheet so that they can do more.
You know, this is about having a real sort of change in pace and scale of what we're doing to meet the demand from countries.
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Speaker 7
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Speaker 7
Minister, we have just come back from Indonesia on delegation and saw many interesting projects. And so my question is with the bilateral Oda to Indonesia and other G20 countries coming to an end, how you plan to the government plans to sustain its engagement on climate and nature and the energy environment in the post Oda world?
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Speaker 2
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Speaker 2
I think great that you went to Indonesia. Um, it's a really good place if you want to look at sort of forests and and this energy transition as well. More generally. Um, so our bilateral, um, Oda funding in Indonesia, you're right, is going to come to an end because we took the decision to stop doing that kind of support with G20 partners, with the exception of Turkey recognising the um, refugee work that they do. I think this is right, because actually what South Africa, Indonesia, India is saying to us is that they want the technical assistance for sure.
They want investment. And we can do that via BII and the Mdbs and the bank, um, what they don't need from us is sort of program delivery. Um any longer in the same way that they, they did previously. And it's a much more, it's recognising the shift in their um ambition, if you like to want to take more control and also to be able to deliver a scale that you just could never do through a kind of bilateral. Nation.
They want investment. And we can do that via BII and the Mdbs and the bank, um, what they don't need from us is sort of program delivery. Um any longer in the same way that they, they did previously. And it's a much more, it's recognising the shift in their um ambition, if you like to want to take more control and also to be able to deliver a scale that you just could never do through a kind of bilateral. Nation.
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Speaker 2
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Speaker 2
I mean, I think the agreement stands and we should be able to deliver on it. I don't see why we we can't. Um this is about providing the kind of support that Indonesia now says it wants. Um, and I, I think we can do that and we will be, you know, a good partner to Indonesia. It's a priority country. Um, for us on energy and I think for Defra as well. Nature. Yeah.
On nature. So, um, I think this is a natural evolution, recognising the change in our partner country and us responding to that as much as anything. We probably, even if we hadn't cut the Oda budget, I think it may have taken a bit longer, but we would have got to a same place.
On nature. So, um, I think this is a natural evolution, recognising the change in our partner country and us responding to that as much as anything. We probably, even if we hadn't cut the Oda budget, I think it may have taken a bit longer, but we would have got to a same place.
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Speaker 2
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Speaker 2
So I think and this is you know, this is a gamble, but um, because we're trying to be consistent in our approach to all of these things, we have asked our teams, um, to work on a portfolio basis. And we've discussed this, um, in previous hearings. And this means that teams in country will work out their suite of programming. They should be complementary and they should be able to be looked at as a coherent, um, offer to a country. And what we need to do, I think, is to look really carefully at what teams are proposing to do.
And we're just starting to get the portfolios back. Now. I've got Nigeria, which is one of our bigger ones waiting for me. Um, at my on my desk. And we will be monitoring in the same way we always have done so consistently what the climate and nature, um, element of those programmes and portfolios is we will be monitoring that if we feel that that's going off track and is not going to meet the kind of the target that we would have liked to have seen, we will have to intervene and do something about it.
I think what we're going to find is that more posts, um, are focusing more on climate and on nature, specifically because there is a demand from partner countries that they do that and they will be integrating nature into other programming types. I am quite confident that that is the case if I am wrong. I will have to account for that. But at the moment what I'm seeing is teams responding really very positively to that.
And we're just starting to get the portfolios back. Now. I've got Nigeria, which is one of our bigger ones waiting for me. Um, at my on my desk. And we will be monitoring in the same way we always have done so consistently what the climate and nature, um, element of those programmes and portfolios is we will be monitoring that if we feel that that's going off track and is not going to meet the kind of the target that we would have liked to have seen, we will have to intervene and do something about it.
I think what we're going to find is that more posts, um, are focusing more on climate and on nature, specifically because there is a demand from partner countries that they do that and they will be integrating nature into other programming types. I am quite confident that that is the case if I am wrong. I will have to account for that. But at the moment what I'm seeing is teams responding really very positively to that.
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Speaker 2
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Speaker 2
Could, but I, I'm much more interested in outcomes here. So if we put targets in and we see this in every area of public policy targets can be a really very effective tool, particularly when you're at the start of a journey and you want to dramatically shift attitudes. Um, in an organisation that's not where we are anymore. We've got, um, you know, a great deal of expertise and in people who are intrinsically committed to this agenda, um, working in all of our teams and we shouldn't need to do it.
And I think you can, it can have a distortive impact where you seen as almost a ceiling rather than a, um. You know, rather than something that ought to thread itself through everything you do, if I am. Wrong, I will have to account for this. But I also have an opportunity in the way that we're doing this to course. Should we need to. I think I'm right, and I've got confidence that our teams will deliver this, and I think they will deliver very, very strongly.
But, um, but that's where we are as of now.
And I think you can, it can have a distortive impact where you seen as almost a ceiling rather than a, um. You know, rather than something that ought to thread itself through everything you do, if I am. Wrong, I will have to account for this. But I also have an opportunity in the way that we're doing this to course. Should we need to. I think I'm right, and I've got confidence that our teams will deliver this, and I think they will deliver very, very strongly.
But, um, but that's where we are as of now.
13:21
Speaker 6
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Speaker 6
Can I and thank you for being frank with us, but, uh, it's in the government's national security assessment in January 2026 that the ICF. Uh, well, it doesn't say that there should be a sub pledge, but it's within the security assessment. And then to, as you suggest, gamble on it doesn't feel I mean, with confidence.
13:22
Speaker 2
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Speaker 2
Yeah I know well odds you'd give it I suppose, but there is as I say there's an opportunity to course. Correct. So it's not a gamble that you're stuck with. I think that um just looking at how the organisation works, looking at the, the people that we have and we can talk about, um people in Fcdo 2030 as well, but I think um, I think this is going to achieve a better outcome than putting a target on at this point. I understand the desire to have a target.
I understand the skepticism that there is and that if you don't have a target, people think you're no longer committed. That is not true. And we are absolutely committed to this. I think we achieve better outcomes by doing it in the way I've described. Should I be wrong about that?We have an opportunity and we can, you know, we can we can intervene and say to teams, you know, no, you've got to do it this other way. But I don't want to get to that because I respect the people that we have working on this because frankly, they have been doing this.
You know, many of them just care passionately about this agenda. And they want to they want the UK to be leaders. And I've got confidence that they can deliver. This is why we've given them the freedom and flexibility to do that. This is why we've given them three years worth of, um, funding to be able so they can plan and really develop things well, and why we're asking them to do this in a holistic way. But, you know, let's I'm not just going to, I'm not saying this and I'm going to hand this off and see where we are in three years time.
It's constant monitoring that we need to do.
I understand the skepticism that there is and that if you don't have a target, people think you're no longer committed. That is not true. And we are absolutely committed to this. I think we achieve better outcomes by doing it in the way I've described. Should I be wrong about that?We have an opportunity and we can, you know, we can we can intervene and say to teams, you know, no, you've got to do it this other way. But I don't want to get to that because I respect the people that we have working on this because frankly, they have been doing this.
You know, many of them just care passionately about this agenda. And they want to they want the UK to be leaders. And I've got confidence that they can deliver. This is why we've given them the freedom and flexibility to do that. This is why we've given them three years worth of, um, funding to be able so they can plan and really develop things well, and why we're asking them to do this in a holistic way. But, you know, let's I'm not just going to, I'm not saying this and I'm going to hand this off and see where we are in three years time.
It's constant monitoring that we need to do.
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Speaker 2
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Speaker 2
So initially, um, this is a, it's a new fund and you know, this is a big chunk of money and it's public money. And we've got to be absolutely confident that, um, every penny we invest in whatever fund is that we're really sure it's going to deliver what we need, what it says it's going to deliver at the point of, um, cop in Belgium, we were not at that stage where we could confidently invest at that point. We did do a lot of work with the Brazilians and with the world Bank to get this, um, to do the sort of technical work to try and get this to a place where it was a fund that we felt was investable for the UK taxpayer.
I think we're at about at that place now. Decisions do need to be made about whether and when the UK might want to invest. This is a designated lead. Um so I'll resist the temptation to give my own. Although we work very closely together, we do respect each other's expertise and this would not be mine. Um, but it's clearly a, it's a fund that has got a lot of attention. I know people do very much want to see the UK invest.
Um, but as I say, it's a, it's a sizeable amount of money that's needed to get the fund to the, to the scale at which it becomes able to really have the impact that it's designed to do. But I don't know that if you've got a more developed view.
I think we're at about at that place now. Decisions do need to be made about whether and when the UK might want to invest. This is a designated lead. Um so I'll resist the temptation to give my own. Although we work very closely together, we do respect each other's expertise and this would not be mine. Um, but it's clearly a, it's a fund that has got a lot of attention. I know people do very much want to see the UK invest.
Um, but as I say, it's a, it's a sizeable amount of money that's needed to get the fund to the, to the scale at which it becomes able to really have the impact that it's designed to do. But I don't know that if you've got a more developed view.
13:25
Speaker 3
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Speaker 3
No, no, I think that's right, Minister. So, um, I think as you said, you know, we're not in a position now, um, to be able to financially, uh, commit to the, to the scheme, but the UK has been there supporting working with Brazil right from the beginning and we've provided some technical assistance support, you know, right from the beginning of the development of this programme to, to support its development.
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Speaker 2
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Speaker 2
Of the work that we did to get it. Well, we don't have, um, large sums. Of money like that available to invest in new things at the moment. And we all understand why that is. But there's no point me pretending otherwise. That is the situation we are in. We've made a lot of big bets multilaterally with our Oda budget in Global Fund, in Gavi, in Ida, to make another one. Um, we need to have the funds available to invest, which, you know, Desnoes has its own portfolio and could choose to reprioritise some of the choices it's already made, but then you would be holding them to account for some of those choices too.
So it's like you said about, um, earlier about trade offs. Um, this is a new thing that we would be having to embark on and we have to be mindful about what we couldn't then do if we were to choose this.
So it's like you said about, um, earlier about trade offs. Um, this is a new thing that we would be having to embark on and we have to be mindful about what we couldn't then do if we were to choose this.
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Speaker 2
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Speaker 2
Um, there are lots of things that are investor models that we could choose to invest in. And I'm not saying we never will. I'm just saying that as of today, we don't have the available funds that mean that we can invest at scale into a new fund. I'm not saying that that will remain the case. And, you know, as we get to make new and different choices, um, in coming months and years, we might well choose to involve ourselves to a greater degree.
But the reason that those other countries, some of the countries are able to invest is not only because of the work that we did, but we were instrumental in getting this fund to the place where it is now.
But the reason that those other countries, some of the countries are able to invest is not only because of the work that we did, but we were instrumental in getting this fund to the place where it is now.
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Speaker 2
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Speaker 2
Yeah. I mean, we work I mean, you know, business. Could I yes. I mean, it is essentially I'm you know, Desnoes have the lead on, on this as they do with Cop. Um, but when it comes to our Oda budget, I'm responsible for that. So we, we work together, we meet. I mean, I don't know how very often isn't it with Minister White and Minister Kray to discuss these issues. And um, I think I can't I mean, I don't want to speak for Minister White, but I don't think she would embark on something like this without talking to us.
And it would be something that we would definitely want to do. Um, across departments and obviously the Treasury would have a view as well. If I can put it that way.
And it would be something that we would definitely want to do. Um, across departments and obviously the Treasury would have a view as well. If I can put it that way.
13:29
Speaker 8
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Speaker 8
Chair, can I just come back on?Sorry, can I just come back on ETF for. So Minister, you described that quite rightly that we have a lot of staff who want the UK to be world leading and to be seen as world leading when it comes to, uh, nature and forest commitments. Can I just ask, in your view, if we don't have those kind of headline metrics that we're pushing towards and meeting, how would they define themselves as being world leading?
13:29
Speaker 2
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Speaker 2
Because they know they're being measured on it. So you can measure, um, if you can measure what you're doing without saying, and you must meet 35% because the problem with saying you must meet 35% is they will meet 35%. Thank you very much. I'll go and do the next thing. And actually, what we want to do is encourage more and more of our programming to be sort of multifunctional. So it will be, you know. A climate project, but it will have a nature.
Um, it'll do climate using nature and it must also think, and what does this mean for women?All of our programming will be better quality, I believe, because we're doing it this way. Unless um, about just ticking boxes and meeting targets.
Um, it'll do climate using nature and it must also think, and what does this mean for women?All of our programming will be better quality, I believe, because we're doing it this way. Unless um, about just ticking boxes and meeting targets.
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Speaker 2
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Speaker 2
It's because I think I mean, my answer to that would be around our expertise and the access to things like in the UK, it would be um, I mean I suppose in this field it'd be the Met Office would be one example. Uh, Kew Gardens, um, our agri tech businesses, um, John Innes centre sort of, um, new seed technology, all of these things, um countries recognise the UK has um quite a long track record now in being leaders and innovators and I think our teams take enormous pride in that and really want to promote that.
And one of the ways, not the only way, but one of the ways they do that is through the, the programming that they devise.
And one of the ways, not the only way, but one of the ways they do that is through the, the programming that they devise.
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Speaker 2
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Speaker 2
One of the things, I mean, David Lammy was actually really firm on this actually was when we initially discussed our approach to this, was making sure that it didn't look like we were playing fast and loose with the numbers. And we have been very, very careful that there's internationally agreed ways of calculating ICF. I mean, Roz can go into go into detail of exactly how that's done. Um, but we are consistent with our international partners in how that's done. If we're not, our credibility will be absolutely shot and we will no longer be able to sort of call ourselves leaders in, in any way because we will have undermined ourselves.
So I would rather come out with a lower figure, but it be accurate and honest than artificially bump something up using methods that, you know, France or Japan wouldn't use. We have to be consistent internationally.
So I would rather come out with a lower figure, but it be accurate and honest than artificially bump something up using methods that, you know, France or Japan wouldn't use. We have to be consistent internationally.
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Speaker 11
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Speaker 11
I'll just add that our definition of climate finance is guided by the OECD definition. And so we've been very careful to ensure that what we're counting is in line with that and in line with what other partners are doing. And so that's the approach that we've taken in the past. That's the approach that we're going to take in the future.
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Speaker 12
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Speaker 12
Thank you, Chair Minister. Uh, written evidence suggests that the 2023 climate finance strategy has not sufficiently provided direction on prioritisation decisions, criteria for resource allocation or programme selection across the portfolio. In what way does the latest iteration of the strategy address those past concerns?
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Speaker 2
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Speaker 2
What we inherited was a situation where you had different government departments basically got their chunk of Oda, and there was, I'm not saying there was no sort of strategic alignment across government at all. That wouldn't be fair. Um, I would say it was insufficient. And what we've done now, I mean, even I think just two weeks ago, we moved some, I think it was forests across to Defra and gave them the money as well. Because what they're doing, they're better at it, you know, they've got the expertise.
You've been working across departments. Let's have it in one place. Be much more impactful, even though that's, you know, you could say at a cost to my department. Um, I think it's the right thing to have done. So we have, there's the Oda board process, which is the sort of formal cross Whitehall place where we discuss the sort of high level strategic. What are we going to do?Discussions. But then we have a, you know, a very lively um meets very frequently, um, trilateral discussion between Fcdo and Defra where we go into detail about which geographies, what the priorities are for this spend, how we're going to, what the governance needs to look like, what reporting we want, the issue about monitoring the nature target.
We've discussed at great length. And we we want to make sure we get regular reporting so that if we need to correct, we can. Believe me, Mary Cray will absolutely make sure that happens. Um, so I think the governance is much, much better. Um, the proof of all of this will be do we get better outcomes?Um, and, you know, I'm, I'm as confident as you can be that we will, but it is much, much better. The alignment across Whitehall I can say is, is much stronger now.
You've been working across departments. Let's have it in one place. Be much more impactful, even though that's, you know, you could say at a cost to my department. Um, I think it's the right thing to have done. So we have, there's the Oda board process, which is the sort of formal cross Whitehall place where we discuss the sort of high level strategic. What are we going to do?Discussions. But then we have a, you know, a very lively um meets very frequently, um, trilateral discussion between Fcdo and Defra where we go into detail about which geographies, what the priorities are for this spend, how we're going to, what the governance needs to look like, what reporting we want, the issue about monitoring the nature target.
We've discussed at great length. And we we want to make sure we get regular reporting so that if we need to correct, we can. Believe me, Mary Cray will absolutely make sure that happens. Um, so I think the governance is much, much better. Um, the proof of all of this will be do we get better outcomes?Um, and, you know, I'm, I'm as confident as you can be that we will, but it is much, much better. The alignment across Whitehall I can say is, is much stronger now.
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Speaker 2
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Speaker 2
Um, I mean Fcdo. 30 because it is downsizing the department is a risk to everything we do potentially and done without any care or, uh, you know, any mindfulness of capability would be a real problem. But because we've been able to say that climate and nature, humanitarian and health are priorities within the development portfolio, then that when Fcdo is complete and we are still away from that, um, then those capabilities should be there. If they're not, then we need to, we may need to, you know, discuss with um, whoever the new permanent under-secretary should be, what we do about that.
But I'm not, I'm not overly concerned about that at the moment. And also. You know, the Foreign Office has what it does on, on nature and climate, but because we work across Departmentally, I think that there's probably less of a risk with our with sort of team UK's expertise in this area. Um, because we work in, in the way that we do.
But I'm not, I'm not overly concerned about that at the moment. And also. You know, the Foreign Office has what it does on, on nature and climate, but because we work across Departmentally, I think that there's probably less of a risk with our with sort of team UK's expertise in this area. Um, because we work in, in the way that we do.
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Speaker 6
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Speaker 6
I just want you to come back to accounting, if I may, on your answer to Tracey. So, um, the, the center for Global Development, um, believes that the UK should be clearer in its stats, uh, which the ICF projects create assets for the UK and which are pure expenditure. And this comes back again. Sorry if I seem slightly obsessed with the TF that it comes back to that again in the, in that the public perception is that, as you said, it's just £1 billion here, but actually that could create an asset.
It's a loan and it's not a cash transfer. So so actually dividing that up on what ICF is would actually be better for public perceptions and public support for this stuff. So why would you not do that or think of doing that.
It's a loan and it's not a cash transfer. So so actually dividing that up on what ICF is would actually be better for public perceptions and public support for this stuff. So why would you not do that or think of doing that.
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13:37
Speaker 2
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Speaker 2
You might be right about that. I don't know. Um, I mean, I'm not saying it's not an in-principle objection to doing this, it's just that I don't have half £1 billion looking for a home. And if I did, then obviously TF might be something that we'd want to do. But and I take your point about it being alone, but it still would be. We'd still have to account for it. Um, so I think it's just, it's just, I don't know how more, how more straightforward to be about it really.
13:38
Speaker 6
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Speaker 6
It's, it's recoupable. So therefore could be an asset. And it's very different to saying there's a cash transfer of billion pounds going over here to this fund. This is a loan which we will recoup. So therefore it could be seen as an asset. So but TF aside, that seems to me a much better way of of measuring and, and accounting for the money that we spend, because it also has the added benefit, which is very important of taxpayers being clearer about where their money is going.
13:39
Speaker 2
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Speaker 2
Yeah. I mean, I think there's many good things about moving towards more investment than being a donor. And the fact but, you know, the things that we invest in. Um, so our shares that we have at, say, African Development Bank, I don't think of them as sort of buying an asset for the UK, if I'm completely honest about it. Um, technically it is, but actually this is us um enabling. Leverage and enabling investment in other, in other countries.
And I think I hadn't really thought about it in terms of trying to explain to the public that this is us buying an asset. I think it's quite an interesting suggestion. I will take that away and give that more thought. Um, but I still come back to the point with TF that, you know, we don't have that available money today that would allow us to do that, that can change and it can change, you know, very quickly because, you know, other, other priorities change if the war in Ukraine ends, suddenly things become possible that are not today because we're spending three quarters, you know, spending 240 million a year on an odor, as well as everything else we're doing in Ukraine.
And I'm glad that we are, um, we're also spending a lot in Lebanon and Gaza and Sudan and other places that are completely being wrecked by conflict. And I, it would be much better to spend that money on things that are more, more positive and secure global future. But conflict means that we are that determines too much. I think it's sad, but that determines to a very great extent where our money goes right now.
And I think I hadn't really thought about it in terms of trying to explain to the public that this is us buying an asset. I think it's quite an interesting suggestion. I will take that away and give that more thought. Um, but I still come back to the point with TF that, you know, we don't have that available money today that would allow us to do that, that can change and it can change, you know, very quickly because, you know, other, other priorities change if the war in Ukraine ends, suddenly things become possible that are not today because we're spending three quarters, you know, spending 240 million a year on an odor, as well as everything else we're doing in Ukraine.
And I'm glad that we are, um, we're also spending a lot in Lebanon and Gaza and Sudan and other places that are completely being wrecked by conflict. And I, it would be much better to spend that money on things that are more, more positive and secure global future. But conflict means that we are that determines too much. I think it's sad, but that determines to a very great extent where our money goes right now.
13:40
13:40
Speaker 2
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Speaker 2
Yeah. And I would absolutely agree with that. But, you know, these are conflicts that are happening now and we can't wish them away. And we've got you would want us to be active in those places, supporting people in the most desperate need and. You know, it, it would be great to be able to do everything, but we just can't.
13:41
Speaker 13
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Speaker 13
So coming back to Monica Harding's point about the UK's assets at work in developing countries, does it not concern you that there is not more. This is not more front of mind for Fcdo in. During this shift from donor to investor that actually. These are the. The British public's assets at work that will not just disappear off into the ether with. Yes, some lovely social and developmental effects along the way. But ultimately those assets will remain at work and be recycled time and time again.
And yet does it?If your department isn't thinking about the recycling and reinvestment of those assets as as something that is that the British public's money at work for years and years to come, such that you don't have to then commit future investment such that you do teach a person to fish. Um, as the old adage goes, then how on earth can we expect the British public to understand that our money is there at work for years and years to come, and not just being thrown into a big black hole.
And yet does it?If your department isn't thinking about the recycling and reinvestment of those assets as as something that is that the British public's money at work for years and years to come, such that you don't have to then commit future investment such that you do teach a person to fish. Um, as the old adage goes, then how on earth can we expect the British public to understand that our money is there at work for years and years to come, and not just being thrown into a big black hole.
13:41
Speaker 2
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Speaker 2
Absolutely fair. Um we do. So we had some reflows from investments into India last year and we did comms that, um, and we got, you know, reasonable pick up in the media. So we need to do more of that. And I absolutely take your point. The truth though, is that the money we put into the world Bank through Ida, a lot of the money we put into BII, a lot of the money we put into the Africa Development Fund, the reason that it needs replenishing is because you're not actually buying an asset for the UK.
That's it's not like we're building a. You know, a solar farm somewhere. And that's an asset. And and we will get a reflow from it. That can happen. But a lot of places that we're focusing on are the poorest, most fragile economies. And that's a lot, lot harder, um, to convincingly say we have bought the UK taxpayer an asset because the reason they need replenishing is because we don't get the return on those investments. So we've got to be.
Yes, we are being an investor and we're getting leverage and getting money into those economies. But the idea that it's not quite as straightforward, um, in a lot of cases that we're just buying an asset. But when that does happen and we get the reflows, I think, I think we need to do, and I take your point completely, we do need to make, um, give that much more prominence. Whereas before, traditionally, I think our communications has been much more about we're spending X amount of pounds in X amount in this place, feeding people.
Great. We should continue to do that. But we do also need to explain what else the Oda budget does. And I would agree that we've not been particularly successful at that.
That's it's not like we're building a. You know, a solar farm somewhere. And that's an asset. And and we will get a reflow from it. That can happen. But a lot of places that we're focusing on are the poorest, most fragile economies. And that's a lot, lot harder, um, to convincingly say we have bought the UK taxpayer an asset because the reason they need replenishing is because we don't get the return on those investments. So we've got to be.
Yes, we are being an investor and we're getting leverage and getting money into those economies. But the idea that it's not quite as straightforward, um, in a lot of cases that we're just buying an asset. But when that does happen and we get the reflows, I think, I think we need to do, and I take your point completely, we do need to make, um, give that much more prominence. Whereas before, traditionally, I think our communications has been much more about we're spending X amount of pounds in X amount in this place, feeding people.
Great. We should continue to do that. But we do also need to explain what else the Oda budget does. And I would agree that we've not been particularly successful at that.
13:44
Speaker 13
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Speaker 13
And very briefly, do you think there's an argument to be made that if we are doing that and we are communicating that better, even if we're not recouping the capital?Um, if it does remain in place and remains at works, it grows over time. Is there not a case that that potentially reduces our obligation to spend in future years?And do you find that a compelling argument to make to the public?
13:44
Speaker 2
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Speaker 2
I absolutely do. I, I try to do that. I'm sure I could do more. Um, I, but I think we need, um, members of Parliament. We need, um, the sort of sector and trusted voices more generally to be making similar points. And then we may, and gradually we may have some success, but I, I, I do agree and there's some brilliant examples around the world. I mean, South Korea is the one that always gets points pointed to of a country that was a recipient of aid and is now, you know, a real economic powerhouse because of, of investments by, you know, many other countries.
And I suppose most of all by the world Bank.
And I suppose most of all by the world Bank.
13:45
13:45
Speaker 8
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Speaker 8
Thank you, chair. And you've mentioned earlier, Minister, and it's been discussed between the panel as well, um, that the four departments are working on climate finance. And you would assume by your description that everything is top dollar. But if you look at our case report, it does persistently highlight that there is a blurring of responsibilities and an element of siloing. So firstly, do you recognise that that is an issue and if so, what's being done to try and make sure that that issue is addressed?Because we are talking about splitting responsibilities in multiple directions here.
13:45
Speaker 2
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Speaker 2
Yeah. I mean, when I first, um was appointed, I sort of started off with a situation where I thought, right, we've got a lot less money. Let's get it all back into the Fcdo. Let's run it all from one department and be nice. Matt's having a fit here. Um, so we can be properly in charge of it and it can be really focused. I mean, actually, there's an argument for that, but then we would lose all the expertise that Desnos brings, all the amazing, um, working experience that Defra has.
And we, I thought better to try and resolve the issues that I identified. And I think we would all recognise, um, by working in a different way. And uh, fortunately, I have fellow ministers who want to do that too. Um, and who have enormous expertise in what they're doing. Um, Katie White and Mary Cray are, I do think, bring an enormous amount of sort of personal passion and, and knowledge and, and the officials likewise. And we are making it work, you know, is it all sweetness and light?Not always.
You know, we have disagreements and discussions and, um frustrations. But the right way to resolve them isn't by retreating into your departments and working out how to undermine each other. And we'll, we'll go through the back door of the treasury and get them to agree this disaster. You know, we've got to be coherent and we've got to have a sort of shared understanding. So the strategy that we've, um, sort of nutted out between us, we're all behind and we've now got to work to this and not just, you know, I, it was a problem, I think that you had programming going on and I always point the finger at Defra.
It's not just Defra. It's not completely fair. But you turn up in a country and you'd stumble across a programme that they'd been running, that you knew nothing about. Your head of mission knew nothing about. Um, and had sort of like, you know, questionable kind of, um, outcomes that I don't think there's a lot, lot less risk of that now because there should be absolute open book. And the open book goes for the Fcdo as much as it does for other departments.
And they can come and say, we're not happy with what you're doing in this place. And we think you should have included mangroves in whatever it is.
And we, I thought better to try and resolve the issues that I identified. And I think we would all recognise, um, by working in a different way. And uh, fortunately, I have fellow ministers who want to do that too. Um, and who have enormous expertise in what they're doing. Um, Katie White and Mary Cray are, I do think, bring an enormous amount of sort of personal passion and, and knowledge and, and the officials likewise. And we are making it work, you know, is it all sweetness and light?Not always.
You know, we have disagreements and discussions and, um frustrations. But the right way to resolve them isn't by retreating into your departments and working out how to undermine each other. And we'll, we'll go through the back door of the treasury and get them to agree this disaster. You know, we've got to be coherent and we've got to have a sort of shared understanding. So the strategy that we've, um, sort of nutted out between us, we're all behind and we've now got to work to this and not just, you know, I, it was a problem, I think that you had programming going on and I always point the finger at Defra.
It's not just Defra. It's not completely fair. But you turn up in a country and you'd stumble across a programme that they'd been running, that you knew nothing about. Your head of mission knew nothing about. Um, and had sort of like, you know, questionable kind of, um, outcomes that I don't think there's a lot, lot less risk of that now because there should be absolute open book. And the open book goes for the Fcdo as much as it does for other departments.
And they can come and say, we're not happy with what you're doing in this place. And we think you should have included mangroves in whatever it is.
13:48
13:48
13:49
13:49
Speaker 2
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Speaker 2
That's an interesting question. Um, I think the reason it's worked so well today is because you've had three ministers who are determined to make this work. Um, were that not to be the case, I think now we've got the institutional way of working that would secure it and, and safeguard that progress. Um, but I do think political leadership matters. Um, and I mean, I would say that officials might have a different view, but, um, so I think if you didn't have ministers who wanted to work in that way, then, you know, it may not work quite so well, but I honestly, um, I like to think that we've, we've got it sort of institutionally embedded sufficiently that it could withstand that.
13:49
Speaker 14
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Speaker 14
Um um move the, the. Question on to the use of multilaterals. Um so we've heard evidence that they can play a crucial role in sort of aggregating climate investments. But we've also heard that they can be overly bureaucratic, they can be very centralised and sometimes unresponsive to local needs. And so it's a question really of how are you going to ensure that the UK, that what we're spending through Multilaterals is nimble enough to have impact?
13:50
Speaker 2
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Speaker 2
I mean, the criticisms of multilateral system are I wouldn't necessarily disagree with them. And I think part of what we have to do is to change that, because they are the right way. Often, especially on climate and energy, to deliver at scale. We've been successful in sort of their, um, capital adequacy rules. We've, we've managed to get those changed, which is enabled their, um, balance sheet. To grow massively. We've got to get them lending, I think 100 billion by 2020.
2030 is our target. They're on about I think they're on like 85 billion at the moment. So well on their way. So it's definitely the right vehicle. The discussions we had at the Global Partnership conference, which were a lot of it was about, um, the impact of the closure of the Straits. Really interesting because you had the mdbs saying, oh, we've got these toolkits and we're working to respond to country need. You had the finance ministers from partner countries going, well, we're not going to access that because it's too bureaucratic.
You're telling us we can have this, but we need it now. You're going to make us do all this work and it's too slow. So there's a there's a push now from partner countries, from us as board members and investors. And I was having this conversation with, um, Germany yesterday as well, where we really. And I think, you know, the Mdbs want to get this right because they know this is how they're going to be judged. And I think there is evidence already that they've started to, um, adapt and.
Become more responsive. We've just got to keep pushing on this and keep pushing them into, um, fragile context and least developed countries as well, because it's really easy to be an MDB, you know, lending money to middle income countries.
2030 is our target. They're on about I think they're on like 85 billion at the moment. So well on their way. So it's definitely the right vehicle. The discussions we had at the Global Partnership conference, which were a lot of it was about, um, the impact of the closure of the Straits. Really interesting because you had the mdbs saying, oh, we've got these toolkits and we're working to respond to country need. You had the finance ministers from partner countries going, well, we're not going to access that because it's too bureaucratic.
You're telling us we can have this, but we need it now. You're going to make us do all this work and it's too slow. So there's a there's a push now from partner countries, from us as board members and investors. And I was having this conversation with, um, Germany yesterday as well, where we really. And I think, you know, the Mdbs want to get this right because they know this is how they're going to be judged. And I think there is evidence already that they've started to, um, adapt and.
Become more responsive. We've just got to keep pushing on this and keep pushing them into, um, fragile context and least developed countries as well, because it's really easy to be an MDB, you know, lending money to middle income countries.
13:52
Speaker 2
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Speaker 2
It's multilateral politics is a thing. And each of these institutions, the the dynamics are slightly different. Um, I think I mean, the world Bank is quite a good example where yesterday they, um, agreed to extend their climate change action plan, which was not a given. Um, so we had to work really closely with our partners, principally Europeans. Um and, and Canadians and others on trying to make the case in a way that didn't, um, I mean. The art to this is to make the case for what you believe without making it really difficult for people who don't agree with you to compromise.
So that was achieved yesterday. And we have this action plan. It's not as it would be if we'd written it ourselves, but that's the world. You know, these things are contested and there is a need to be pragmatic. So there was we achieved that. It wasn't clear we were going to get a climate change action plan at all. And a bank without an action plan on climate is a problem for us. So that's that's that's a good outcome.
Um, Africa Development Bank slightly different because you've got a different set of investor countries. Um, I mean the US is a very small player in that room. Uh, the UK biggest investor in the Africa Development Fund, lots of African ownership. So very, very different conversation. I really enjoy that institution. I think it's much more it's a bit smaller. It's, you know, more dynamic and more, um, is African Africa led?
So that was achieved yesterday. And we have this action plan. It's not as it would be if we'd written it ourselves, but that's the world. You know, these things are contested and there is a need to be pragmatic. So there was we achieved that. It wasn't clear we were going to get a climate change action plan at all. And a bank without an action plan on climate is a problem for us. So that's that's that's a good outcome.
Um, Africa Development Bank slightly different because you've got a different set of investor countries. Um, I mean the US is a very small player in that room. Uh, the UK biggest investor in the Africa Development Fund, lots of African ownership. So very, very different conversation. I really enjoy that institution. I think it's much more it's a bit smaller. It's, you know, more dynamic and more, um, is African Africa led?
13:54
Speaker 7
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Speaker 7
And so they're all slightly different. But it is there's not kind of we don't get in there, wave the Union Jack and say, everybody follow us. I think I think that would be a disaster. Um, so you've got to be really mindful of who you're working with. You've got to listen really hard. You've got to make sure that the people we appoint to be executive directors in these institutions are really, you know, first class and can navigate all of this.
Um, so, and I think I'm sure we don't get it right every time, but I, I'm very impressed with, um, you know, our EDI in Washington on the world Bank, for instance, I think, or Juliet John, who's our EDI, um. The, uh, AfDB, I think, I think they're good at what they do, but I think it's really, and the reason I'm so impressed is I can just see how hard it is.
Um, so, and I think I'm sure we don't get it right every time, but I, I'm very impressed with, um, you know, our EDI in Washington on the world Bank, for instance, I think, or Juliet John, who's our EDI, um. The, uh, AfDB, I think, I think they're good at what they do, but I think it's really, and the reason I'm so impressed is I can just see how hard it is.
13:55
13:55
13:55
13:55
Speaker 7
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Speaker 7
Yeah. I mean there are um, there's, there's, there's a, the name of it now, but it assesses the impact of multilateral institutions. That's one thing. I mean, we, you know, we agree, um, positions with our editors that we want them to take when contentious decisions are taken, we agree the strategy for each institution, we get to influence that. Um, my job is to build up a relationship with the people in charge of those institutions. So the president of world Bank, president of, um, AfDB and, and, you know, the Inter-American Bank and the other Caribbean.
And I think, I think the UK is seen as an honest broker and people know where we stand. They know that um, we don't just go along with what the loudest voices want. We've got clear, well-established, and consistent views on gender, on climate. I mean, those are the two things that are causing most of the controversy at the moment. Um, and those, you know, we're clear about it.
And I think, I think the UK is seen as an honest broker and people know where we stand. They know that um, we don't just go along with what the loudest voices want. We've got clear, well-established, and consistent views on gender, on climate. I mean, those are the two things that are causing most of the controversy at the moment. Um, and those, you know, we're clear about it.
13:56
13:57
13:57
13:58
13:58
Speaker 7
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Speaker 7
But you could never like, we never would have been able to replace the scale of, of any of the banks with any like that's never been the case that we could have, you know. Substituted for bilateral programming. It's always been additional. These two things ought to be complementary. Um, now our bilateral programme is much, much smaller. Is that good?No, but. It's, it's, it's the right, you know, given that you had to make these choices, investing more in where you can achieve scale and get development outcome, right, which gives you that it's the multilateral system.
13:58
13:58
Speaker 5
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Speaker 5
You a bit further on this, I think, speaking candidly, you're probably the first person I've ever heard describe the African Development Bank as dynamic. Um, but that's very heartening to, to hear. Um, but on that point, on this trade off between doing multilateralism, multilateral investment versus bilateral, I totally hear what you're saying about our negotiating leverage. Again, it's heartening to hear that we have been able to exercise that in certain ways in relation to climate. Um, I totally hear as well as well what you're saying about scale.
But earlier you gave an example of our bilateral investments. I believe it's probably Ioana at BII that you're referring to are successful disposal of and recycling of that stake into future investments. So doesn't that kind of prove that that actually you can get an awful lot done at scale through the bilateral channel?And do you not think that that's perhaps a more direct, more efficient and certainly more kind of, um, British development policy aligned way of getting capital out the door?
But earlier you gave an example of our bilateral investments. I believe it's probably Ioana at BII that you're referring to are successful disposal of and recycling of that stake into future investments. So doesn't that kind of prove that that actually you can get an awful lot done at scale through the bilateral channel?And do you not think that that's perhaps a more direct, more efficient and certainly more kind of, um, British development policy aligned way of getting capital out the door?
13:59
Speaker 7
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Speaker 7
Yeah. I mean, there was a, there was a discussion about should we just put it all into BII. Um, and we could have done that, but it's still only going to be so big. And if you think that the development gap runs into trillions, the world has to come together and invest collectively. I would say in order to get to achieve anything like what's needed to meet the ambitions of our partner countries, what works really well is when, because BII is a bit more adventurous than, um, Mdbs, it's prepared because we allow it to, and we replenish it so that it can, it can take a little bit more risk and it can go it's, it can be in markets that others shy away from.
And it can take first risk and it can then get, um, the IFC to come in and to, to, to supplement what it's doing. So where, you know, when it works well, um, it can be catalytic in its own right of MDB balance sheets as well. And I think that's, that's, that's a strength where it can really work well, I think is if we can get private sector investment in alongside, then we're building sort of then I think, I think that's the next thing that I'd like to see us do much, much more of.
And the work we're doing with, um, our task force with pension funds and fund managers in London. I'm hoping will enable BII and well, it doesn't matter whose money it is, to be honest. Um, but more of this money to get into emerging markets because that's, that's where the big money globally is. But too much of it is in Europe and North America. Not enough of it goes anywhere. I mean, less than 1% goes into Africa.
And it can take first risk and it can then get, um, the IFC to come in and to, to, to supplement what it's doing. So where, you know, when it works well, um, it can be catalytic in its own right of MDB balance sheets as well. And I think that's, that's, that's a strength where it can really work well, I think is if we can get private sector investment in alongside, then we're building sort of then I think, I think that's the next thing that I'd like to see us do much, much more of.
And the work we're doing with, um, our task force with pension funds and fund managers in London. I'm hoping will enable BII and well, it doesn't matter whose money it is, to be honest. Um, but more of this money to get into emerging markets because that's, that's where the big money globally is. But too much of it is in Europe and North America. Not enough of it goes anywhere. I mean, less than 1% goes into Africa.
14:01
14:01
14:01
Speaker 3
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Speaker 3
Um, hello. We've always been very impressed with our teams at the world Bank and in other multilaterals. I wonder with the staffing changes going on, um, what are you doing to protect and maybe even increase those teams so that they have more influence?And I wonder also, is there an example that you can give us where we've been able to amplify the voices of maybe a low income country that doesn't have a seat on the board?
14:01
Speaker 7
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Speaker 7
Yeah. I mean, this issue of of seats on the board and voice is a real problem. Um, complicated to resolve. But, um, so our, our teams at, um, the banks are small, they're really small. And I mean, when you talk to the people in them, a lot of them come from Treasury as well, not from Fcdo. So it's quite a good mix of skills and experience. And I see it as our chance to indoctrinate, alternate um, Treasury officials into the right way of thinking about the world.
Um but I think and they, they, these are sought after roles because you are in a sort of exciting, politically very challenging team, a small team. You don't have all the headaches of big HR and all of that, that, um, others have to deal with. They are really impactful roles. So they, we put great people into them. So I'm glad that you have been impressed with them as well. Um, the. The work that they, so the work, the work that we do, part of it is deliberately to amplify the voices of our partner countries because like you say, um, often they don't have the opportunity to, to sit on the boards.
They don't even have the opportunity to speak like other people. Canada speaks the Caribbean. Nothing about Canada. They do an amazing job at it. This is a historical quirk from when institutions were set up. Um, after the war. This was the world as it was at that time in 2026, and it's no longer okay, um, for there to be such little representation. We and I made, I think the last two occasions that I've spoken at the bank have made specific, um, cause of this problem, the.
Issue is around, um, your seats at the board is determined by your shareholding, the shareholder, the shares are held up by big donor countries. There's a whole politics between us and China, which means that this doesn't get opened up and reset in the way that, you know, may may be more conducive to, to sorting this out. This is where we are as but we are, we've got, um, we have enabled, I think we've got an additional um, representation for Africa and we do make, we make this case frequently.
So we've just got to keep pushing on this. I think.
Um but I think and they, they, these are sought after roles because you are in a sort of exciting, politically very challenging team, a small team. You don't have all the headaches of big HR and all of that, that, um, others have to deal with. They are really impactful roles. So they, we put great people into them. So I'm glad that you have been impressed with them as well. Um, the. The work that they, so the work, the work that we do, part of it is deliberately to amplify the voices of our partner countries because like you say, um, often they don't have the opportunity to, to sit on the boards.
They don't even have the opportunity to speak like other people. Canada speaks the Caribbean. Nothing about Canada. They do an amazing job at it. This is a historical quirk from when institutions were set up. Um, after the war. This was the world as it was at that time in 2026, and it's no longer okay, um, for there to be such little representation. We and I made, I think the last two occasions that I've spoken at the bank have made specific, um, cause of this problem, the.
Issue is around, um, your seats at the board is determined by your shareholding, the shareholder, the shares are held up by big donor countries. There's a whole politics between us and China, which means that this doesn't get opened up and reset in the way that, you know, may may be more conducive to, to sorting this out. This is where we are as but we are, we've got, um, we have enabled, I think we've got an additional um, representation for Africa and we do make, we make this case frequently.
So we've just got to keep pushing on this. I think.
14:04
14:04
Speaker 7
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Speaker 7
I mean I think I don't know if we need to expand the team. I will speak to our editor about this and see what he thinks. Um, I mean, I'd be very happy to do that. I mean I think they are impactful and I think they're probably right sized. The thing that I think we do need to think about is how we connect our teams in country with the bank's reps in country and our team in Washington so that it's more, um, joined up because I think our editor does get a bit fed up with me whatsapping him about.
I've just seen this thing in Mozambique. What's the bank doing?Like, that's not an efficient kind of way of resolving things. Um, so there is for us to consider like our system and how we, how we get our teams to be more familiar with what the mdbs do and to really feel that mdbs are part of their toolkit. Um, I think is going to be an important, you know, it's an important next step for us to think about.
I've just seen this thing in Mozambique. What's the bank doing?Like, that's not an efficient kind of way of resolving things. Um, so there is for us to consider like our system and how we, how we get our teams to be more familiar with what the mdbs do and to really feel that mdbs are part of their toolkit. Um, I think is going to be an important, you know, it's an important next step for us to think about.
14:05
14:05
14:05
Speaker 7
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Speaker 7
Not expecting them to be charities. You know these are good investments. And if they don't want to make them they won't. Um but there's good returns to be had. And especially in emerging markets, these are exciting opportunities. And the private sector has a desire to do this. Um, so we're not just saying you. Know, this is not a kind of corporate social responsibility initiative. This is them making sound investments on behalf of their, um, members.
And they won't do it if they don't want to.
And they won't do it if they don't want to.
14:06
14:06
Speaker 7
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Speaker 7
We think 6.7 billion. Um I wouldn't be surprised if we didn't do more than that. Just I think that there's um there's a desire to do it from the um the private sector side and the markets massively growing and also. I think investors don't want to be the first to go into a new market or to do something new. Neither do they want to be the third, fourth, fifth. They want to be there's a big peer um influence.
I'm learning among fund managers, but so that but that's starting to happen. And what we can do through BII, among other vehicles. But BII is really good at this is, is, is getting sort of hybrid investments and being the first to say we'll take the first loss. Do you want to be part of this stack?And they will. That's how we're going to make this work. They're good at it. They've become better and better at it.
Um, I think BII is, you know, really delivering on this. So we have got a target. Let's see. Um, but I. At risk of sounding overconfident, I think, I think we're well placed I. I need to be in the Lords. I've got to answer a question.
I'm learning among fund managers, but so that but that's starting to happen. And what we can do through BII, among other vehicles. But BII is really good at this is, is, is getting sort of hybrid investments and being the first to say we'll take the first loss. Do you want to be part of this stack?And they will. That's how we're going to make this work. They're good at it. They've become better and better at it.
Um, I think BII is, you know, really delivering on this. So we have got a target. Let's see. Um, but I. At risk of sounding overconfident, I think, I think we're well placed I. I need to be in the Lords. I've got to answer a question.
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Speaker 5
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Speaker 5
Um, perhaps a clarification from officials is best on this anyway. So the figure of £6.7 billion of mobilisation was mentioned is that aligned with the 11.6 billion. Climate finance commitment that we've we've made?Are those two equivalent?Because it strikes me as a rather low mobilisation ratio, if that's okay.
14:10
Speaker 16
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Speaker 16
So the 6.7 is actually, um, the amount of public finance that is non Oda, which includes B I, I as the minister outlined, which includes a UK export finance which includes the guarantees that we provide to the Mdbs to underwrite their activity. So that scores as a non Oda. But it also. But it does score as climate finance as recognised by the OECD. And as a result of our kind of collective impact, we. The commitments set out in the ICF announcement, ICF four was to mobilise billions more from kind of pure private sector.
And that's something which we um, you know, we've got high ambition to do.
And that's something which we um, you know, we've got high ambition to do.
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14:12
Speaker 16
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Speaker 16
So I mean, obviously there's, in terms of the scale and the volume of climate finance needed that runs into the trillions. And therefore, I think there is no pathway that doesn't involve private sector investment. What I think we need to do is ensure that that investment is targeted into the right places, that we're using our public finance to, um, create the. Conditions and the right environment into which that, that finance can flow. And that I think is, is a part of the risk.
And one of the areas where we're seeing that done being done very successfully is in the mitigation space where we're seeing, I think, significant volumes of finance flow into mitigation. I think one of the harder to to crack areas is in the resilience space, where I think it's harder to incentivise and get private finance to recognise the value of, of investments in resilience. And so that absolutely needs to be a focus going forwards.
And one of the areas where we're seeing that done being done very successfully is in the mitigation space where we're seeing, I think, significant volumes of finance flow into mitigation. I think one of the harder to to crack areas is in the resilience space, where I think it's harder to incentivise and get private finance to recognise the value of, of investments in resilience. And so that absolutely needs to be a focus going forwards.
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14:13
Speaker 5
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Speaker 5
That's something we've heard from certainly a lot of witnesses in this inquiry is um just briefly, are there any sort of you mentioned that you sort of tried to manage that risk, but are there any sort of guardrails that you use to ensure that you do get sufficient private capital mobilisation?Um I know for instance, there will be at the BII level, say a mobilisation ratio required, but how much do those sorts of guardrails pass through the entire Fcdo commitment.
14:13
Speaker 16
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Speaker 16
So I think yeah, you're right. And to, to kind of single out BII as an area which has a particular kind of targets and a strategy that looks at that. We're very closely in touch with our colleagues in UK export finance, um, to encourage and, and kind of create, uh, greater knowledge and awareness. I think there's something around joining up actually, as the minister talked about, um, on the ground. So this connection between our teams at post who can see first the needs in the countries where the opportunities may lie, some of the work that may need to be done, for example, in the regulatory environment, uh, which where we might be able to use a small amount of Oda to support that flowing through then to, um, opportunities for mdbs or multilateral climate funds to come in, uh, and to do specific projects, which then I think leads on to creating kind of the wider opportunities for private sector finance to kind of flow in at scale.
So it's a, I think it's a kind of multi-pronged approach, looking at it kind of all different cycle stages of the, of the kind of the investment cycle.
So it's a, I think it's a kind of multi-pronged approach, looking at it kind of all different cycle stages of the, of the kind of the investment cycle.
14:13
Speaker 5
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Speaker 5
Okay. I think you've sort of answered my next question, which was about how we get better collaboration among some of those climate finance tools. But thinking of, say, could you perhaps give a few more practical examples?We know BII and UK AAF will be delivering perhaps, I don't know if you'd call it the lion's share of climate finance. Um, but could you give some more concrete examples of how you perhaps get some of those tools to work together and beyond just the sort of dfis as well?
14:14
Speaker 16
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Speaker 16
Yeah. I mean, so I think there are, you know, I can't, I can't name particular projects, but let me kind of talk through how it might work. It might start with a, a problem with access to climate finance in a particular country. So I know, for example, in Ethiopia, we've done quite a lot of work in thinking about how that country can access climate finance from multilateral climate funds. And if we're able to unlock and speed that process up, um, that will enable finance to flow from the multilateral climate funds into, into that country where on the ground, uh, we want to ensure that the multilateral climate funds are very joined up with, uh, Ifis.
And so that's a big part of our, our kind of reform agenda for the mix, which is to ensure that they are working in collaboration with and in closely in touch with, uh, other financial institutions on the ground. And that's so that's happening both from kind of a London end in terms of using our seats on the boards of, for example, the Green Climate Fund and the. Jeff. And as well as the minister talked about our our EDI in the world Bank and our position in other ifis.
And so there's a there's a I think there's that kind of strategic reform effort to make sure that collaboration is happening across the financial system. And then at post on the ground, uh, we have our teams, uh, you know, headed by ambassadors at post trying to bring the join up and ensure that it happens at a local level so that a specific projects are identified and all sources of funding are kind of considered for that. And where, for example, some British expertise may be needed. Uh, and we can draw on, um, you know, for example, the Met Office or, um, you know, we've had projects that look at kind of infrastructure using the five case model that can be brought through as well.
And so that's a big part of our, our kind of reform agenda for the mix, which is to ensure that they are working in collaboration with and in closely in touch with, uh, other financial institutions on the ground. And that's so that's happening both from kind of a London end in terms of using our seats on the boards of, for example, the Green Climate Fund and the. Jeff. And as well as the minister talked about our our EDI in the world Bank and our position in other ifis.
And so there's a there's a I think there's that kind of strategic reform effort to make sure that collaboration is happening across the financial system. And then at post on the ground, uh, we have our teams, uh, you know, headed by ambassadors at post trying to bring the join up and ensure that it happens at a local level so that a specific projects are identified and all sources of funding are kind of considered for that. And where, for example, some British expertise may be needed. Uh, and we can draw on, um, you know, for example, the Met Office or, um, you know, we've had projects that look at kind of infrastructure using the five case model that can be brought through as well.
14:15
Speaker 5
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Speaker 5
Thank you. Certainly like to hear more about the Ethiopian example. If you'd be able to write to us the private finance, uh, coming to the ethics of this is not subject to the same, safeguards as public spending is. Certainly, we know we've got very strong safeguards in place for a lot of our development finance institutions. But this, of course, can worsen inequality. Um, in the worst case scenario as well. So so what are we doing to what specific plans does Fcdo to have to mitigate that?
14:16
Speaker 16
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Speaker 16
So certainly in terms of the, uh, the kind of investments that BII make, um, there is a strong and certainly across all of the ICF, we implemented, um, the, some GDC. So gender equality, diversity and social inclusion framework that we have set out for our ICF, uh, across the whole piece. And that's something which we will continue to monitor, uh, and, and kind of hold ourselves to account to.
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Speaker 16
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Speaker 16
I mean access to climate finance is a kind of a perennial issue. Um, and we hear that not only in terms of some of the smaller organizations, but in terms of the speed and the time taken and the bureaucracy that it can take to, to kind of access climate finance. Um, that's something we're very kind of aware and conscious of that access point in terms of the multilateral climate fund. And for example, we have worked through our board seat at the Green Climate Fund to speed up that access.
Um, and to be, uh, you know, and to kind of make progress on that. There's also something, uh, that we. Are, we're kind of doing, doing work on, which is to try and harmonize kind of standards and harmonize, for example, the accreditation of entities which can receive finance. So for example, the fund, uh, for responding to loss and damage has actually taken. It's a fairly new fund recently come into establishment and beginning to operationalize that has taken on, um, rather than kind of create its own standards for accreditation.
It's taken on the, you know, it's been, it's basically said that we'll have the accredited entities for the GCF. So countries or institutions or local locally led, um, kind of organizations don't have to kind of do that again. So I think it's about, for us kind of listening to the concerns of partners, including kind of the, the very local level around some of the kind of issues that they face. And then using our kind of position on boards and through the projects and programs that we run, including a number of programs on access, uh, to, to seek to address those.
Um, and to be, uh, you know, and to kind of make progress on that. There's also something, uh, that we. Are, we're kind of doing, doing work on, which is to try and harmonize kind of standards and harmonize, for example, the accreditation of entities which can receive finance. So for example, the fund, uh, for responding to loss and damage has actually taken. It's a fairly new fund recently come into establishment and beginning to operationalize that has taken on, um, rather than kind of create its own standards for accreditation.
It's taken on the, you know, it's been, it's basically said that we'll have the accredited entities for the GCF. So countries or institutions or local locally led, um, kind of organizations don't have to kind of do that again. So I think it's about, for us kind of listening to the concerns of partners, including kind of the, the very local level around some of the kind of issues that they face. And then using our kind of position on boards and through the projects and programs that we run, including a number of programs on access, uh, to, to seek to address those.
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14:18
Speaker 16
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Speaker 16
And the, the, the publication of the GDC, that's a funny name. The gender equality, diverse disability and social inclusion guidance. And that is, um, you know, runs across not just ourselves, but our delivery partners as well. Um, and we'll be looking for all new ICF programs to include that focus on, on gender equality and wider social inclusion. Um, you know, we do have programs which are, I would say are really kind of do lean into the women and girls space, recognizing that the poorest, most marginalized and often those are women and girls are disproportionately impacted by climate change and the impacts of climate change as well.
Um, so there are.
Um, so there are.
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14:19
Speaker 16
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Speaker 16
So I don't think we have, um, decided to put any sort of ring fences in place. Um, and I would kind of probably draw on the same arguments that the minister used around the nature target, which is about actually, if we set expectations, um, you know, be really clear on our expectations, which we've done through the guidance actually, then it's about holding ourselves to account and being transparent and reporting on that.
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14:19
Speaker 16
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Speaker 16
Yeah. I mean, as you all know, our Foreign Secretary is very committed to the women and girls agenda. And that's something which has now been, I think, kind of mainstream and really kind of bled into the kind of DNA of the department. It was there already. I think she's really given a significant boost. Um, I would say that, um, I think it's at different levels. So at the post level, um, I think you've got, um, you know, advisors that will operate in an embassy looking across the work of an embassy, uh, both in, I think that includes not just the programming, but also the, the wider levers we have.
Um, and the policy development, the diplomatic levers as well, a London level again, um, you know, there are kind of advisors on this that are, you know, that sit across the department, both geographic, thematic, uh, who provide excellent, um, often have a great deal of experience in how best to ensure that our programming, be it on climate, be it on health, be it on education is, uh, matches up to and takes account of, and in some cases, a very specifically focused at women and girls. So I think it's an ongoing process.
Of using, you know, some of the deep expertise that we have in the department to inform and constantly improve our, our kind of sharpen up our programming.
Um, and the policy development, the diplomatic levers as well, a London level again, um, you know, there are kind of advisors on this that are, you know, that sit across the department, both geographic, thematic, uh, who provide excellent, um, often have a great deal of experience in how best to ensure that our programming, be it on climate, be it on health, be it on education is, uh, matches up to and takes account of, and in some cases, a very specifically focused at women and girls. So I think it's an ongoing process.
Of using, you know, some of the deep expertise that we have in the department to inform and constantly improve our, our kind of sharpen up our programming.
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Speaker 4
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Speaker 4
Thank you. Um, for many of the poorest in the developing world, and I speak from some experience, having worked for a long time in Africa and elsewhere. The, what is happening in terms of the climate is that, uh, the rainfall pattern is changing. So for example, if you plant your crop, uh, you might find that you then have a dry spell, uh, and you have to replant if you don't do the right thing. Um, and this is really expensive for poorer people and it may be impossible sometimes for poorer people, because any seed that they've kept has, has, has been used up the first time around.
And the point I'm sort of trying to get to is that, uh. A system which I've seen work very well in Malawi, but I've also seen it work well elsewhere, uh, with um, ecological sanitation where you basically the family is composting its own poop. Um, with leaves and what have you, uh, means that they can have between 2 and 4 months extra food supply a year. And at the moment it's quite common that food will actually run out for a couple of months. So a family may literally have nothing left for a month or two.
And I'm just thinking that, uh. If more effort was put into those sorts of simple things, uh, are the. The aid money that we have and the finance that we were able to offer could go a lot further and actually help a lot more people who are really at the bottom of the heap. And, you know, you might be talking about, for example, um, money to buy concrete tops for, for latrines, those sorts of things. Um, which if the money's not there, it won't happen.
Um, and I'm just wondering to what extent thoughts gone into some of these really small scale initiatives, which if they're done at a large enough scale, will affect millions.
And the point I'm sort of trying to get to is that, uh. A system which I've seen work very well in Malawi, but I've also seen it work well elsewhere, uh, with um, ecological sanitation where you basically the family is composting its own poop. Um, with leaves and what have you, uh, means that they can have between 2 and 4 months extra food supply a year. And at the moment it's quite common that food will actually run out for a couple of months. So a family may literally have nothing left for a month or two.
And I'm just thinking that, uh. If more effort was put into those sorts of simple things, uh, are the. The aid money that we have and the finance that we were able to offer could go a lot further and actually help a lot more people who are really at the bottom of the heap. And, you know, you might be talking about, for example, um, money to buy concrete tops for, for latrines, those sorts of things. Um, which if the money's not there, it won't happen.
Um, and I'm just wondering to what extent thoughts gone into some of these really small scale initiatives, which if they're done at a large enough scale, will affect millions.
14:23
Speaker 16
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Speaker 16
Yeah. I mean, absolutely right. To highlight water as a, as a, as a critical issue. And I think the climate crisis is not just a climate crisis. It's a water crisis, a humanitarian crisis. It's a it's a livelihoods crisis. And I have a, a, a stat here that around 90% of climate related disasters are actually water related disasters. And we're seeing water related insecurity be a driver of economic loss, migration, instability. So an absolutely critical area to, to focus on.
Um, I think we are, um, thinking. About the programming and the support we provide. Um, on the ground, uh, in terms of kind of resilience, uh, and we have a program which I believe works in Malawi. Um, I'll have to double check that. And other countries are just transitions for water security that supporting, um, around 40 million people in low income countries to help manage water, uh, water security. Think about, um, how. They use their water resources more efficiently and more effectively.
Um, which is not only an important for, for climate, but absolutely critical for, for livelihoods and poverty.
Um, I think we are, um, thinking. About the programming and the support we provide. Um, on the ground, uh, in terms of kind of resilience, uh, and we have a program which I believe works in Malawi. Um, I'll have to double check that. And other countries are just transitions for water security that supporting, um, around 40 million people in low income countries to help manage water, uh, water security. Think about, um, how. They use their water resources more efficiently and more effectively.
Um, which is not only an important for, for climate, but absolutely critical for, for livelihoods and poverty.
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14:24
Speaker 3
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Speaker 3
Matt. I think these questions are for you, but if not, um, please pass them over. Um, what discussions have Fcdo had around ring fencing grant funding for low income countries?Because there seems to be this assumption that private investment will flood in. But of course, for low income countries and the projects that they're likely to host, that might not be the case.
14:25
Speaker 8
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Speaker 8
Uh. Yeah. So we, I mean, as the minister in Ross has been describing before, we have very, you know, regular, extensive discussions about our portfolio planning alongside Fcdo, um, and a lot of that comes to the questions of which the priority countries should be for each of the departments in Disney's, we have more of a focus on those countries investments in those countries which are likely to have the greatest impact on emissions reductions. So that sort of necessarily brings you towards those countries, either with the highest level of emissions now, or where those emissions are growing fastest.
And so, you know, the impact in reducing that that growth will be the be the largest.
And so, you know, the impact in reducing that that growth will be the be the largest.
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14:26
Speaker 8
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Speaker 8
Does invest in, in various African countries, depending on the, you know, the different program and different areas. But among our top ten, we've certainly got investments within Nigeria and Egypt and Ethiopia. Um, as as. Three so, but, but that partly reflects the level of it partly reflects on the level of emissions, as we said.
14:26
Speaker 16
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Speaker 16
I can come in a little bit here as well. So I'd say that, um, where Disney's has a lead on mitigation, we certainly have a lead on resilience and adaptation. And that's where I think actually UDC, an impact on the poorest and most vulnerable. And our ICF for strategy, I think, say explicitly that we are both targeted on transformation, and that may include action in the mitigation space. And I guess we searched in, uh, analysis to really think about kind of how we leapfrog forward, but also the focus on kind of vulnerable and the, you know, the poorest.
Um, and I think some of the work on the resilience side is very much kind of targeted in that space. Um, given that the climate, climate shocks, for example, we're seeing impact, um, you know, very, very poor people. Um, in, in the global South. Um, and some of the work we're doing is to kind of support their resilience to be able to anticipate those shocks, um, and be able to kind of strengthen, um, you know, strengthen systems when those shocks happen.
Um, and I think some of the work on the resilience side is very much kind of targeted in that space. Um, given that the climate, climate shocks, for example, we're seeing impact, um, you know, very, very poor people. Um, in, in the global South. Um, and some of the work we're doing is to kind of support their resilience to be able to anticipate those shocks, um, and be able to kind of strengthen, um, you know, strengthen systems when those shocks happen.
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Speaker 16
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Speaker 16
So, you know, I think we firstly having that, that commitment to a balance is a really important thing. And that's not, you know, that's effectively a something that we will need to hold ourselves to account to. And as the minister described, continue to, to track and to see if we're kind of meeting that, that commitment. Um, and so I think that is the kind of the driving, the driving factor, uh, as well as tracking very carefully what we're doing through our posts and thinking about the work that, for example, our humanitarian colleagues are doing to kind of strengthen systems, uh, for the long term for the medium and long term, which is often climate work, uh, rather than kind of pure kind of humanitarian work.
14:28
Speaker 3
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Speaker 3
And sort of thinking about what you said about humanitarian work that tends to be very, uh, sort of working with the local people on the ground. Whereas what we've seen when it comes to sort of the climate money is it tends to work more with sort of governments, businesses, um, larger groups. So, so is there a way that you're trying to get some of that money in a less bureaucratic way down to the local people?
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14:29
Speaker 3
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Speaker 3
And one of my frustrations when we've been doing this inquiry is the government does seem to understandably go where governments say are sort of the worst areas or the areas worst need, but that might not necessarily always match up to where local people think the money will be best spent. So do you have a way with your two departments of actually getting that local voice embedded in because, um, you know, sometimes in the countries that you're going into the government's views might be very, very different to the reality that you might experience on the ground.
14:33
Speaker 16
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Speaker 16
I mean, we say we have a network of kind of climate attachés and advisors that sit out in post and whose role is to engage both, you know, post and their colleagues in the embassy, but also very much kind of outward facing into host governments. But the wider kind of diaspora and community there, many of those, um, many of our staff are actually country based staff who have deep networks and understanding of the political economy in those countries where the needs are, where the opportunities are, where UK money can be best spent.
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Speaker 12
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Speaker 12
Good sense from an analytical perspective. I think others like counting a chunk of humanitarian spend, are difficult to defend. And, um, I heard the minister just say just now that she thought it would undermine credibility if the UK stepped out of international practice. But other countries are not counting. A share of humanitarian spend. Um and so that is, that was set by the last government, but it's been continued by this one. And I think, um, you know, in the context where, where trust is so important with other countries on climate, I think that has undermined the UK's reputation significantly.
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14:35
Speaker 12
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Speaker 12
I think we're I'm quite supportive of channelling more climate finance through multilateral channels. I think particularly the the Mdbs are able to lend in a way that the UK can't bilaterally. Um, you can also mobilise its balance sheet and, and therefore support more projects um than the UK can bilaterally. So I think, I think on the whole I'm pretty positive um about that, I think that we've recently looked at the World Bank's results and the way that it monitors its projects. And that is also quite sophisticated and quite careful relative to most bilateral donors.
Um, and again, for example, the African Development Bank and, and the World Bank's Ida fund are also focused in the poorest places in a way that most bilaterals are not. And the UK is drifting away from. So, so from my point of view, it's, it's an important way to get the finance to the countries that need it.
Um, and again, for example, the African Development Bank and, and the World Bank's Ida fund are also focused in the poorest places in a way that most bilaterals are not. And the UK is drifting away from. So, so from my point of view, it's, it's an important way to get the finance to the countries that need it.
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14:36
Speaker 12
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Speaker 12
So I think I think this is a part of the the wider need for particularly multilateral development banks to to make more of their balance sheets and take more risk without putting, you know, without imperiling their triple A credit ratings. But to do more and I think over various governments, the the UK has pushed on that agenda. And I think that needs further work to realize some of the gains. The credit rating agencies are now said there's potentially tens and hundreds of billions extra that the multilateral development banks could be doing.
And I think the UK needs to push as a shareholder to to make that happen. I guess you saw the minister talking about the World Bank's climate change action plan. And, you know, I don't think the UK has been very vocal in support of that. But but as the minister says, at least the world Bank has got a climate change action plan, even if it's if it's lost the target. So maybe those are two of the, the, the important elements. And I guess the shareholding point is a is a third one, ensuring better representation.
And I think the UK needs to push as a shareholder to to make that happen. I guess you saw the minister talking about the World Bank's climate change action plan. And, you know, I don't think the UK has been very vocal in support of that. But but as the minister says, at least the world Bank has got a climate change action plan, even if it's if it's lost the target. So maybe those are two of the, the, the important elements. And I guess the shareholding point is a is a third one, ensuring better representation.
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14:37
Speaker 12
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Speaker 12
I think partly it's about having effective people on the board. And I think we've, we've got that. And as one of the members raised, it will be important to maintain that through the staffing changes that we're seeing. I think it's about. That's partly about how attractive those posts are within Fcdo and. Whether they're still seen as kind of a core importance. Um, I think the other thing I'd emphasize is, is working with other shareholders. So I think for a long time, even now, you know, when, when there are clearly a group of like minded countries on climate and development, they aren't working as closely as they could to be an effective force on the board.
You know, European shareholding at the bank is is much greater than the US for example. Um and so whilst the US will still have a veto at the world Bank, um European shareholders could work much more closely if they, if they were willing to uh, to work together more on common goals.
You know, European shareholding at the bank is is much greater than the US for example. Um and so whilst the US will still have a veto at the world Bank, um European shareholders could work much more closely if they, if they were willing to uh, to work together more on common goals.
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14:38
Speaker 12
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Speaker 12
Yeah. Of course. So just a simple level, the UK doesn't lend to bilaterally to other developing to developing countries. And so, um. So we don't have that capability. I would personally argue we don't need it. I think it would if you created an institution that lends, it would create a lot of admin, uh, those sorts. Of we don't do a huge amount of business with the sorts of countries that could borrow. And so my view is it's much better to do that through the banks, whereas the bank can lend, does lend.
And also it works directly with governments. So in a way that again, the UK doesn't really do we, we barely work with them.
And also it works directly with governments. So in a way that again, the UK doesn't really do we, we barely work with them.
14:39