COP27 On the Ground Q&A with Goldman Sachs' John Goldstein

Here on the ground at COP 27 in Sharm el-Sheikh, we’re doing interviews with IIF members on key topics they’re following over the next two weeks. John Goldstein of 高盛 sits down with IIF’s Managing Director and Head of Sustainable Finance, Sonja Gibbs, CFA , for a discussion on the importance of blended finance, opportunities to build partnerships for climate finance, and more. The interview has been condensed and lightly edited for clarity.

Sonja Gibbs, IIF

Tell us about why you’ve come to COP, and what Goldman Sachs is doing on all of these issues around innovation and climate finance.

John Goldstein, Goldman Sachs

Great to see you again, since we last did one of these a year ago in Glasgow. Number one, I think, is to share out on what has happened since then. I think some of the themes we’re talking about here are going from pledges to actions. It’s great to share a lot of what we are doing, and a couple of things that are particularly exciting for us. We are pleased to announce the first two transactions from our Climate Innovation and Development Fund that we’ve created with Bloomberg, both focused on e-mobility in Southeast Asia -- a really critical issue. It represents between 12 and 18% of emissions in India and Vietnam, respectively. And so really looking at bus electrification in both of those markets, but slightly different transactions. So, in Vietnam really looking at building out e-buses, but then the complementary charging network, in the transaction, of the company called Vinfast -- about $140 million transaction using blended finance to help crowd in that private capital.

Sonja Gibbs, IIF

That is the topic here at COP27, blended finance: bringing together cheap concessional rate capital with private capital and philanthropy. There are great things you can do with blended finance.

John Goldstein, Goldman Sachs

Exactly, and think about in that transaction where you really need it to help adjust the tenor and adjust the risk to really get that multiplying factor (in that case almost 40 to one, in terms of leveraging that philanthropic capital). And then think about, what does the transaction need? It doesn’t just need buses, it needs to build out the charging network.

Sonja Gibbs, IIF

Yeah, it's harder in some ways, isn't it, getting the charging going?

John Goldstein, Goldman Sachs

Absolutely right. These are systems, right? If you just have one piece of the puzzle, that’s not a puzzle. Thinking about what we're doing in India, about a $60 million transaction -- it's about 255 e-buses, covering 55 routes, that transport about 5 million people a year. Importantly, our money is really looking at one of the key elements there, which is greening the power source. So it's looking at having distributed solar, plus storage nodes through that system.

Sonja Gibbs, IIF

So getting away from coal-fired electricity.

John Goldstein, Goldman Sachs

Yes, exactly. Because at the end of the day, we need to do all of these things, not just one. We need to have electric busses, we need to green the grid -- and finding a way to combine that in this transaction is something we’re really excited about. Similarly, in the last couple weeks we’re pleased to have announced the first couple transactions from the Restore Fund that we have with Apple and Conservation International, looking at reforestation and forest conservation. So for us, we’re happy to be here talking not just about our aspirations around blended finance, but to be able to talk about transactions that have closed.

Sonja Gibbs, IIF

You could even say that what's been missing from these COPs over the years, until fairly recently, you didn’t have the private financial sector turning up, having these conversations with NGOs, with governments, to connect the dots on de-risking these types of transactions.

John Goldstein, Goldman Sachs

Well, I think it's one of the things that's so exciting about being here, right? That microcosm of different actors -- or in this case the macrocosm: civil society, government, the corporate sector, capital. They're all here. And that is a lot of what this takes: finding ways to partner with those institutions -- not just to learn together, not just to talk together -- but to invest together, to act together. This is a good moment with all of these people here in one place, for us to talk not just about what we've done, but on rolling up our sleeves and getting into what we’re going to do together.

Sonja Gibbs, IIF

Over the course of the week, you probably have a lot of events and meetings and so on. What do you hope to get out of the week?

John Goldstein, Goldman Sachs

There's a great chance to catch up with friends, old and new, there’s a great chance to learn things...but what I’m really excited about is finding practical actions we can take. Advancing transactions, finding those partnerships and turning them into really practical action, that’s my focus here. If we’re just here to have interesting conversations, frankly, we won't have made the highest and best use of our time.

Sonja Gibbs, IIF

And you know, maybe in some ways having the private sector here, having these conversations about ongoing transactions, can actually maybe give some support and encouragement to the actual official negotiations going on here – give governments comfort that the finance they need is there to help support their goals.

John Goldstein, Goldman Sachs

I hope so. At the end of the day, our commitment is to roll up our sleeves and work to solve our clients’ most important questions and help them with their needs, and this is fundamentally what a lot of them are focused on. We're here, our clients are here, we’re all putting our heads together and doing the work.

Sonja Gibbs, IIF

Exactly, building an ecosystem to get all this climate finance done. John, thanks so much for chatting with us.

John Goldstein, Goldman Sachs

Thanks Sonja, for having me.