Methodological and Technological Issues in Technology Transfer

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2.3.4 Multilateral Development Banks

The Multilateral Development Banks (MDB) have seen technology transfer as part of their mission to encourage development. More recently they started to focus on the challenges of the environment and the specific problems involved in transferring environmental technology. In response many have started to develop a range of initiatives and activities.

In particular, development banks have become aware of the role they can play in helping to mobilise private capital to help meet the needs of sustainable development and the environment, and of the potential to use financial innovation to encourage environmental projects and initiatives. While much of the earlier work they did was sporadic, the private sector arms of the Multilateral Development Banks are now seeking to identify ways they can work with international private capital to help address environmental and developmental needs.

The World Bank, including its affiliate the International Finance Corporation, has developed a number of initiatives with the potential to support environmental technology transfer. These include financing a number of environmental lending programmes at domestic financial institutions, meant for local industries. An important new initiative is the Carbon Investment Fund. This is a vehicle which will provide additional finance for CO2 mitigating projects in return for carbon offsets, i.e. the right to transfer the credit for the CO2 saved to the investor. It is expected to have a substantial private sector component.

The European Bank for Reconstruction and Development (EBRD), is the only one to have sustainable development incorporated in its charter. It is also quite active in working with the private sector . Thus it is not surprising that it has shown a fair amount of leadership in helping to encourage technology transfer. Examples of its initiatives include working with intermediary banks to educate them on environmental issues and the potential of clean technology, and activities to support the development of Energy Service Companies.

Other MDBs, such as the regional development banks (African Development Bank, AfDB, Asian Development Bank, ADB, Inter-American Development Bank , IDB) all play an important role in regional investment, and most have given some attention to issues of sustainable development, in varied ways. The European Investment Bank is also a huge investor, internationally particularly to the Asia-Pacific-Caribbean countries under the Lomé Convention; its investment programmes however have not generally been co-ordinated with the EU's goals on sustainable development and climate change.

Governments can use their leverage to direct the activities of multilateral development banks through their respective Boards and Councils in order to:

  • Strengthen MDB programmes to account for the environmental consequences of their lending;
  • Develop programmatic approaches to lending that remove institutional barriers and create enabling environments for private technology transfers;
  • Encourage MDBs to participate in NSI partnership initiatives;
  • Pay special attention to South-South technology transfer.

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