The Group of Seven nations will create a fund to help developing nations build robust supply chains for products needed for decarbonization, sources familiar with the plan said Friday.
The fund will be used to help developing and emerging nations in the so-called Global South boost their capacity to process resources and produce items needed to reduce carbon dioxide emissions, such as solar panels and electric vehicle batteries. Japan is planning to contribute $5 million to the envisaged fund at the World Bank, according to the sources.
Supply disruptions during the COVID-19 pandemic and Russia's war in Ukraine have led the G-7 and other nations, particularly those heavily reliant on China, to review how they secure products that are critical to their economic security.
A launch event is scheduled for Oct. 11, ahead of a meeting of the finance ministers and central bank governors of the Group of 20 advanced and emerging economies in Morocco, the sources said.
Besides Japan, this year's rotating chair, the G-7 includes Britain, Canada, France, Germany, Italy, and the United States plus the European Union.
The envisaged fund will initially be used to cover costs for personnel engaged in the transfer of technologies to developing nations.
Under the plan, it will develop into a framework that will enable private-sector financial institutions to extend loans to companies in the Global South and to support the local processing of minerals and manufacturing of parts and end products, the sources said.
The G-7 plus Australia and other developed nations are seeking to build better supply chains critical to achieving green growth, with the aim of helping low- and mid-income nations play bigger roles in such supply chains and nurture their domestic industries.
