Interview with Helmut von Glasenapp, Secretary General of European Long-Term Investors Association (ELTI).
- How important were the actions taken by development banks during the crisis generated by the Covid-19 pandemic?
Immediately after the surge of illnesses resulting from the Covid-19 crisis, ELTI’s members were fully mobilised to support national economies. Compared to 2019 figures, ELTI’s members doubled their commitments both in the number of loans and investments as well as in the total amount of funds committed. We also coordinated our actions by organising regular videoconferences with our CEOs and established weekly conferences to exchange on best practices. In a nutshell, the Covid-19 crisis had a double effect: Firstly, it reinforced the importance and pertinence of NPBIs to intervene in the local economy for a leveraging effect. Secondly, it underlined the importance of having constant exchanges on our practices for securing the consistency of our actions on the ground throughout all over Europe.
- What are the priority lines of action, themes, or sectors for the development banks in your region?
I would say that European NPBIs are currently focusing on four main themes: infrastructure, SME and mid-caps, new technologies and energy. Due to the current situation in Europe resulting from the Russian invasion of Ukraine, it appears that energy and possibly other sectors could increase their importance regarding the sovereignty of the continent.
- How strongly does climate change impact your region and what are development banks doing to adapt to and mitigate it?
Climate crisis is a key factor for all our members. We act mainly in two ways: (1) we finance the adaptation of economic actors for the future and (2) we finance new sources of energy. Concretely in 2021, our members financed in the range of 180 Bn € of which 40% were funds (co)-financed in sustainable projects. European NPBIs are acknowledged as major actors for implementing public policies for tackling the climate crisis.
- What do you consider that development banks in your region should focus on more strongly to improve job creation and, in general, the people’s well-being?
ELTI’s members are already deeply involved in these areas, which is why, some years ago, we published a report about social infrastructure and the means for financing them. We are important investors therefore we contribute directly for job creation. Between 2015 and 2021, the European Union implemented a program known as the “Juncker Plan” with European Investment Bank and NPBIs. This program lead to the creation of more than 1,7 M jobs.
- In perspective, how do you view the importance of the development banks in your region? Is there a genuine interest in strengthening them and giving them a key role to play in the countries’ development?
European NPBIs have a long history with some ELTI members dating back from the beginning of the 19th Century. Several others were created after WWII and the most recent were installed after the fall of Soviet Union in 1992. They have at their disposal a huge amount of money with ELTI's 31 members’ combined balance sheet being around €2.6 Trillion. These may differ greatly in size and overall scope in their field of work but nearly all of them are major actors in their own country as they act as a leveraging partner with the private sector.
- In this new post-Covid-19 international scenario, how do you see the relationship between development banks and a global initiative such as Finance in Common?
Finance in Common is a very dynamic and positive initiative although not all ELTI members are directly involved in it as some are relatively small in size and are completely focused on their own national market. Having said that, some important members have a realm of action well over their national borders and are deeply involved in the ‘Finance in Common’ initiative.
- Do you consider that international organizations and global summits like the United Nations Climate Change Conference of the Parties (COP) are giving development banks the position they are entitled to and taking advantage of their potential? What would you propose?
The proper acknowledgement of NPIs crucial role is a relatively recent phenomenon after thirty years where public characteristics were mostly considered as irrelevant in the economy. Thus, it is logical that international organisations and global summits had often put aside NPBIs in the past. Things have evolved significantly since the financial crisis of 2008-2009 with our legitimacy as an actor and an “enabler” is becoming increasingly recognized. Our presence during these summits and at the IMF and World Bank conferences continue to be very important. It’s also essential to stress that there is a continuum between what NPBIs do in their own country and what they can do abroad. This does not mean that NPBIs should act automatically at the international level but exchanging best practices is a very strong asset that could be further developed.
- Just how committed are the development banks in your region to the sustainable development goals (SDGs)?
SDGs are important because, for the first time, we have common indicators which are not only based on financial results. SDGs allow us to show that we can have very diverse profiles but still able to work for common goals as precisely described. Almost all, if not all, members of ELTI use SDGs to present their goals and actions.
- How are digitalization tools and financial technology being incorporated in development banks to enhance your region’s financial inclusion, and in general to improve their efficiency and coverage?
Digitalisation has two dimensions in our activities. On the one hand we need to promote these technologies in our countries. Europe needs significant investments in infrastructure as well as in digitalisation skills. Public budgets can boost these investment needs with i.e. blending instruments. On the other hand we need to prepare and develop digitalisation within our own organisations, the paperless office is not reality in many places and approval processes could be much shorter.
- What do you suggest be done to strengthen and enhance the institutional presence of the World Federation of Development Financing Institutions at the global level?
We absolutely need to improve our communication internally and externally. This could be done in four directions:
1. Trying to establish an internal/external letter highlighting concrete actions from our members, especially those which are the most focused on their own national market;
2. Multiplying contacts with multilateral actors like IMF, World Bank and regional banks such as BAD and others;
3. Modernising our website by creating a kind of global website with hyperlinks to our members and members of the members;
4. Organising thematic videoconferences around some themes of common interest including: “banking regulation”, “Impact of rising interest rates”, “Financing social infrastructures”, “The role of NPBIs in the future energy landscape” etc.