Wednesday 20 November 2019 / 5:21 PM International Development

Labour will transform CDC into green development bank

A Labour government will radically overhaul of the UK’s development finance institution, the CDC, transforming it into a green development bank.

The CDC, which has received around £2 billion of public money from the aid budget since 2016, currently manages a portfolio worth over £6 billion.
However, successive audits have shown it has struggled to demonstrate genuine development impact.

Dan Carden, Labour’s Shadow Secretary for International Development, said:

“The CDC desperately needs real change. Labour will ensure that all our aid money genuinely supports efforts to end global poverty, inequality and climate change by making fundamental reforms to guarantee this.

“Revamping the UK’s development finance institution so that it works with governments in the Global South to manage their own green transitions is part of how a Labour government will ensure climate justice for those countries who have done the least to cause the climate crisis.”

A Labour government will review all CDC spending, and end current practices including:

– exclusively funding the private sector
– investing in fossil-fuel infrastructure
– investing via private equity funds
– investing in private for-profit health or education companies

Labour will instead prioritise tangible development impacts from the new green development bank.

Under a Labour government all investments will be aligned to the Paris Climate Agreement and the UN Sustainable Development Goals, the target rate of return on investments will be drastically reduced and the bank’s remit will be expanded to include investment in the public sector and cooperatives in the Global South.

Labour will also ensure that companies receiving investment will be required to provide guarantees of minimum pay, conditions and union recognition for all employees.