G20 Finance Track’s GPFI discusses COVID-19 recovery prerequisites

The UAE recently participated in the G20 Finance Track’s first Global Partnership for Financial Inclusion (GPFI) meeting, which took place virtually. The meeting discussed the COVID-19 recovery prerequisites to achieve financial inclusion for individuals and micro, small and medium enterprises (MSMEs). That, in addition to programmes for financing digital financial inclusion and MSMEs’ projects, ways to provide digital financial solutions to promote resilience and financial literacy, and financial consumer protection during the pandemic’s recovery period.

Mariam Al Hajri, General Budget Deputy Manager at Ministry of Finance; along with Fatima Al Jabiri, Assistant Executive Director and Head of Consumer Protection Department at the Central Bank of the UAE represented the UAE G20 team participating in the meeting. G20 members and invited countries, non-G20 GPFI invited members, representatives of international organisations and the GPFI’s affiliated partners attended the meeting, which was held under the Italian presidency of the G20 this year.

During the meeting, the UAE G20 team reaffirmed the country’s ongoing efforts to spur the MSMEs sector, which is at the forefront of the UAE’s mission to become a global incubator for industry, trade and innovation. The team mentioned that the pandemic had several repercussions on businesses, which is important for the GPFI to measure the relevance of the countries’ level of development to these repercussions, in order to come up with practical solutions to help various countries face the challenges. The UAE team also noted that the G20 need to provide policy makers with the necessary tools to assess the pandemic’s effect on MSMEs financial inclusion on sectoral basis.

The UAE G20 team noted that digital competencies serve to increase MSMEs’ financial inclusion, by providing direct access to alternative cost-effective channels, and creating a broad network of MSMEs’ investors, thus unlocking untapped resources. The team indicated that there is a need to improve financial literacy programmes during the post-COVID era, as it will elevate the financial behaviour of individuals and companies, and enable them to make sound financial decisions.

The G20 Finance Track’s second GPFI meeting will be held on June 24 and 25, 2021 to review the progress of the approved reports and programmes.

The G20 countries will need over 3,500 GW of flexible capacity to run 100 per cent renewable energy systems at least cost, gas engine and battery storage manufacturer Wärtsilä said March 31.

The flexibility requirement breaks down into 2,594 GW of battery energy storage and 933 GW of flexible gas power capacity, the latter capable of running on future fuels like renewable hydrogen, the supplier said.

“The lowest-cost 100 per cent renewable system would require 12,900 GW of electricity production capacity across the G20 by 2030, dominated by wind and solar,” Wärtsilä said.

Modelling by the manufacturer seeks to show a cost-optimal capacity mix in 145 countries and regions. It outlines flexibility needs across grids in 2030 starting from the ground up rather than building on existing energy systems.

As such some elements of a country’s “cost-optimal mix” may already have been exceeded, such as in the UK, where installed solar capacity of 13 GW outstrips Wärtsilä’s model for just 8.3 GW. Balancing intermittency with a combination of flexible gas and energy storage would be 38% cheaper than relying on energy storage alone, it said.

Sushil Purohit, President, Wärtsilä Energy, said, “Last month’s UN climate report gives a clear message for G20 leaders: to decarbonize at the lowest cost, high levels of renewable energy must be scaled up by 2030.”

Carbon-neutral fuel production needs high levels of renewables, he said, to decarbonize all energy intensive sectors, including power and mobility.

“A significant degree of overcapacity is needed to account for the variability of wind and solar generation. Excess electricity can then be utilized to produce future fuels with Power-to-X technology,” Wartsila said.

It was developing a combustion process to allow the burning of 100 per cent hydrogen and other future fuels in its gas engines, it said.

China, the world’s largest creditor, and other Group of 20 major economies last year offered the 70 poorest countries a freeze in debt service payments, with some 43 countries participating thus far and deferring $5.7 billion in payments.

World Bank President David Malpass said further savings of up to $7.3 billion expected by the end of June, but the relief effort had fallen short of expectations because large non-Paris Club bilateral creditors had participated only partially, and bondholders and other private creditors had failed to join at all.