'Raise domestic financing to fund climate action projects'

Developing economies need to do more domestically to raise financing and deepen domestic capital markets to participate and invest in climate action, said International Monetary Fund (IMF) managing director Kristalina Georgieva in an interview held during the climate summit in Dubai.

- Puja Das

The IMF has identified domestic resource mobilization as an area where it can help. As part of the plan, the IMF will start a new programme with the World Bank on tax, quality of spending and local currencies and bond markets next year to help developing economies tap their tax potential to finance development goals. Its objective is to set the target between a 0.5% and 1% increase in the tax-to-GDP ratio based on better policy and stronger institutions using digitalization. Georgieva said the IMF is also interested in debt-for-climate swaps to help developing economies with climate change adaptation and mitigation. She said many developing economies have difficulty attracting private investors because of complex regulations. So, the IMF is working on moving more financing to developing countries, not only through direct contribution but also by bringing development finance and private financiers together to discuss opportunities.