Paris, France, 20 April 2020 – As the world is facing an unprecedented situation caused by COVID-19, the International Development Finance Club (IDFC), the network of leading national and regional development banks, is committed to capitalizing on its members respective experiences with regards to the responses to the crisis. IDFC members actively respond to the situation with a full set of measures with the view to structure the most adequate collective answer to support a sustainable and inclusive economic and financial recovery. All these initiatives are attached to this press release and will be updated on IDFC website on a regular basis.
To cope with the COVID-19 crisis, IDFC members have been mobilizing their full set of instruments and financial capacity.
Public development banks are all in the process of concentrating their efforts on responding to the COVID-19 crisis, be they regional development banks underpinning the orientations of their Member States, national development banks supporting the definition and implementation of their governments' emergency and recovery programmes, or international development banks collaborating with partner countries at a time when cooperation is most needed.
IDFC members have been actively responding to the situation with a full set of measures designed to simultaneously address short-term needs and prepare economic recovery. While urgency lies in the capacity of the health system and social infrastructures, members provide funding, grants and equipment to hospitals and most affected municipalities and to support epidemiological surveillance.
IDFC members are also deciding extensive measures to implement their countercyclical mandate by providing emergency loans, financing facilities, guarantees, by massively reallocating funding or by putting in place easing measures with moratoria on repayments, the introduction of grace periods or reductions in interest rates. They propose systemic solutions by supporting local financial systems to ensure corporate liquidity and maintain jobs. These provisions are made available to most affected entities and sectors, such as MSMEs, transport, tourism, energy, industry, commerce, services, etc. In addition, some members have already mobilized capital markets by issuing dedicated bonds to support their interventions in addressing the COVID-19 crisis. Others are also working together to explore and implement join initiatives in order to create synergies in the response to COVID-19 by leveraging resources to better support their beneficiary countries. Details of the initiatives implemented to date by IDFC members can be found in the appendix.
The Club is committed to capitalizing on these respective experiences with regards to COVID-19 and to help structure the most adequate collective answer to the situation, with the view to strengthen health systems and social infrastructures and to support a sustainable and inclusive economic and financial recovery contributing to the redirection of financial flows towards a just transition.
It is time to collectively review our development schemes and increase our cooperation
The current health crisis is a mirror of our vulnerabilities, it challenges our international health governance and questions our development models, be it in our modes of production and consumption and our difficulties to internalize environmental and societal issues. It is a sharp reminder of the importance of realizing human security by protecting everyone’s health and dignity and building resilient societies.
It is time to rethink our development pathways, to open up our approaches to addressing economic and financial issues, human, animal and plant health, the protection of biodiversity and ecosystems, the fight against climate change and inequalities as a whole, as common goods. It is time to rethink the way we live, work and invest, towards more sober, inclusive and resilient activities, towards more collaboration and cooperation.
The current situation calls for a collective answer within the international development finance community. National and regional development banks are deeply rooted within constituencies and can help build a more collaborative and efficient global architecture for sustainable development, with the support of the multilateral system that can help provide adequate resources and capacity building.
IDFC and the public development banks to build a new coalition towards sustainable development investment at the Summit of Development Banks in late 2020
IDFC could play a major role in building this new collective dynamic, alongside its partners, such as the World Federation of Development Finance Institutions (WFDFI). Public development banks have more than ever a role to play: both counter-cyclical to cope with the crisis and in support of investments for the definition of new development models and the implementation of the Paris Agreement on climate change and the Sustainable Development Goals.
The Global Summit of Public Development Banks, to be held in Paris on November 12, is of increased importance in this context. By gathering, for the first time, public development banks from around the world, the Summit will provide an opportunity to form a new coalition of actors and launch a collective dynamic aimed at fostering coordinated responses to global issues. The Summit will also demonstrate the potential of development banks in redirecting all financial flows towards sustainable development objectives and to contribute to protecting nature and strengthening the resilience of societies.
Rémy Rioux, IDFC Chairperson and Agence Fran？aise de Développement (French Development Agency – AFD) said: “In the fight against Covid-19, IDFC stands out as a strong network of leading national and regional development banks well equipped to not only finance health systems and infrastructures, but also address the social and economic recovery efforts in a sustainable and resilient manner. IDFC members are collectively mobilizing their financial capacity and expertise to provide an immediate response to the short-term challenges as well as to prepare for a post-COVID-19 world that will require a long-awaited paradigm shift. In this respect, the first ever global Summit of Public Development Banks to be held in November will provide a unique opportunity to foster our contribution to the 2030 Agenda and the Paris Agreement with the aim of redirecting financial flows towards sustainable development investments that can enduringly protect the people as well as the planet.”
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