A recent report from the International Renewable Energy Agency revealed that 84% of energy transition investments have been made in China, Europe, and other developed countries. The Middle East and Africa only account for 2%.
A developing country’s ability to raise capital is difficult, in the sense that they are already disadvantaged. It becomes more difficult when taking into account the Ukraine crisis.
On July 13, IRENA and the government of Saudi Arabia hosted an event titled “Beyond the Talk: Financing Renewable Energy to Rule the SDGs.” The event was held on the margins of the United Nations High-Level Political Forum on Sustainable Development at L’Oreal.
IRENA, who has the task of being a permanent observer to the UN, took on the role of moderator and outlined the necessity of attracting finance in order to protect developing nations from energy shortages.
La Camera announced, “There are several key constraints that hinder our investments in the private sector. Even though renewable energy technologies have become cheaper, high financing costs restrict the size of our investments.”
The Deputy Permanent Representative of the UAE to the UN, Mohamed Abushahab, discussed three priority areas at IRENA’s conference that can accelerate progress. These were a greater investment of private capital, employing de-risking instruments, and setting clear project timelines that ensure long-term investment opportunities.
In her welcoming remarks, Dr Kofler said that German development cooperation includes a large amount of support in the energy sector, and closing the financing gap is a key priority.
IRENA established a financing platform which focuses on finance for renewable energy projects. They want to make these projects, more bankable and accessible for investors. They also offer some advice for high-risk projects and support to establish renewable energy in less developed countries.
Ms Cristina Duarte, Under Secretary-General, Special Advisor on Africa, UN Office of the Special Adviser on Africa shared how the Joint Sustainable Development Goals (SDG) Fund incentivize transformative policy shifts and stimulates strategic investments needed in order to achieve the 2030 Agenda for Sustainable Development. She emphasized that in order to have a substantial change we need to focus on specific areas or issues that can have a multiplying effect such as energy.
The World Bank is committed to investing in renewable energy through financing, policy support and capacity building for the Bank’s client countries. They finance 5.6 billion USD each year with about 2.7 of that being invested into renewable energy.
Participants in the live audience and those tuned in virtually also had the opportunity to hear about a UN organisation, the UN Capital Development Fund. Ms Preeti Sinha, the Executive Secretary of UNCDF, spoke about how an independent and voluntarily funded UN organisation affiliated with UNDP helps numerous countries release more resources to reduce poverty and support local economic development.
Audio recording of event is here