Investing in a sustainable future

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Editor's note

By Luc Rigouzzo, Proparco's Chief Executive Officer

It is imperative to develop a low-carbon economy in order to meet two major challenges that our societies will be facing over the next decade: how to guarantee an energy supply (under threat from the increasing scarcity of oil resources), and how to meet the climate challenge. It is likely that the combination of these two constraints will lead to a “new industrial revolution” where priority will be given to low-energy consumption and competitive solutions, thus paving the way for new growth strategies in numerous economic sectors. The fight against climate change does not constitute a brake to economic development. This has been fully grasped by many emerging countries, the first being China. A full-fledged sector of industrial activities has come into being in just a few years; Chinese and Indian companies have now become major global players in the wind power, photovoltaic solar energy and electric car sectors. In Africa – a continent facing a formidable challenge for energy growth – the most competitive solutions are often renewable energy solutions (hydropower, cogeneration, geothermal energy) which come with cost prices that are much lower than thermal solutions. Finally, the Keynesian recovery plans implemented by developed countries in 2009 are all characterized by the will to make long-term investments for future generations and the certainty that sustainable growth will only be possible if our economies curb their carbon consumption.

Considerable financing will be required if this paradigm shift is to work. Massive private financial flows are essential in view of the scale of needs and the budget constraints that increasingly weigh on public finance. The scarce amount of public flows must also be oriented so as to ensure optimal knock-on and leverage effects. Emerging countries – due to their future weight in the rising demand for fossil fuels – are at the center of both climate and energy issues, and yet they need to maintain a strong pace of economic growth. In this context, this issue of Private Sector and Development focuses on the place of private equity – a peg for private financing – in the total amount of flows earmarked for clean energy development in emerging countries. What is its share in the total amount of these flows? How has it evolved in recent years? What are the brakes to private investment? How can they be removed? What feedback can private players in these countries provide, what project typologies do their strategies focus on?

We are extremely pleased to have been able to gather a diverse, relevant and dedicated community of players for this sixth issue of Private Sector and Development. All the articles – which characterize our magazine – clearly reflect our will to take an objective look at the key issues for the development of the countries where we operate. We have, as usual, decided to include a wide range of views by giving the floor to researchers, development players and private players. We would like to thank all these contributors that have whole-heartedly taken part in a difficult exercise. The relevance and quality of their analyses inevitably lead us to objectively question our action. And yet they actually enhance the relevance of Proparco’s model as a catalyst for private investment in areas neglected by markets and our strategy to act as an interface between public policies and private players’ constraints. Finally, they remind us of the pressing need for global action in all countries – developed, emerging and developing alike – in order to face these challenges.

I hope you enjoy reading this issue

The editorial team
Each issue contains articles written by specialists from different backgrounds. The editorial team asks them to contribute to joint reflection and provide insights on a given topic.
The editorial committee

Julien Lefilleur
Editor in Chief Investment officer at PROPARCO
Arthur Foch
Editorial Assistant

Contact us
*For more information about the magazine Private Sector and Development, please write to the following address:* revue_spd@afd.fr