A new partnership formed aims to increase investments in renewable energy projects to speed up the global transition to net-zero emissions.
The International Renewable Energy Agency (IRENA) and the Climate Investment Funds (CIF) will leverage their networks and cooperate on scaling up investments in low-carbon energy resources.
IRENA and CIF will share their expertise in raising capital and deployment of renewable energy projects to increase global investments in clean projects for climate mitigation.
The two will work with governments to develop and enact policies that encourage more investments to be directed to the expansion of clean capacity. IRENA and the CIF will also foster collaboration between governments, the private sector, civil society, local communities and major multilateral development banks.
The partnership comes as global investments in renewables are on the rise. However, the rate at which governments and energy stakeholders are investing in decarbonisation is not enough to meet targets set under the Paris Agreement.
Francesco La Camera, director-general at IRENA, said: “The energy transition has become a cornerstone of the global response to climate change.
“I am confident that this new partnership between IRENA and CIF will help accelerate investment and ensure that all countries and regions can realise the benefits of the global energy transition for a resilient and more equitable world.”
According to a new report released by Bloomberg New Energy Finance, although a record investment of $501 billion was made in clean energy, the capital was mainly in wealthier countries and developing economies including in Africa, Asia and the Middle East are still lagging.
With emerging economies expected to account for 68% of the global power demand by 2050, the report Multiplying the Transition: Market-based solutions for catalysing clean energy investments in emerging markets’ states that developing countries are crucial for the energy transition and private investments need to increase to enable the addition of renewables capacity.
Ethan Zindler, Head of Americas at BloombergNEF, said developing countries “often have the best natural resources, making clean energy typically the lowest-cost option. The challenge then is how to deploy funds needed to drive real scale.”
As a result, Bloomberg New Energy Finance urges governments and investors to tailor-make funding mechanisms in line with local or regional demands.