Renewable Energy the Focus as UN Climate Investment Funds Expands
With a mission to spur development of low-carbon societies and enhance climate resilience across developing and middle-income countries worldwide, the $8 billion Climate Investment Funds (CIF) held its Stakeholder Day and 2014 Partnership Forum in Montego Bay, Jamaica the week of June 22. With CIF membership expanding to encompass 63 countries, the event, co-hosted by the Inter-American Development Bank (IADB), brought together some 500 attendees engaged in climate finance activities to network and share the knowledge they have gained carrying out CIF activities since its founding in 2008. Stepping up efforts to foster deployment of and increase access to renewable energy generation capacity, 14 countries from Africa, Asia, Latin America and the Caribbean were invited to participate in the Scaling UP Renewable Energy in Low Income Countries Program (SREP). Libya was invited to join CIF's Clean Technology Fund.
A "living laboratory" for climate finance
A five-year retrospective report of CIF's activities in 48 pilot countries was presented during the conference. Entitled, “Learning by Doing: The CIF's Contribution to Climate Finance,” the report paves the way to more effective and widespread climate finance by sharing the lessons learned, successes and challenges faced in making the transformation to low-carbon societies.
According to the study, “[S]ince 2008, the $8 billion CIF has made steady progress in its 48 pilot countries in achieving its aspirational goals of fostering partnerships through a programmatic approach, delivering investments at scale, and learning by doing.”
Building the public-private sector institutional framework and cross-sector partnerships that align with national development priorities is a lengthy, complicated and difficult undertaking, however, E3G Associate Director Amal-Lee Amin noted:
“Cross-sectoral dialogue and institutional building’ are easy words to say, but are incredibly challenging to do. It takes time and effort to identify champions within government to really drive processes forward.”
Fourteen countries have contributed $8 billion to CIF, the UN's principal multi-lateral climate finance vehicle. The World Bank Group's International Bank for Reconstruction and Development (IBRD) serves as CIF's trustee. Expectations are that other sources, private sector organizations in particular, will provide an additional $55 billion.
Expanding access to climate finance
High-level and broad and inclusive to the point that makes you wonder about its efficacy, CIF stakeholders include multilateral development banks (MDBs), UN and UN agencies, the Global Environment Facility (GEF), the UN Framework Convention on Climate Change (UNFCCC), Adaptation Fund, bilateral development agencies, non-governmental organizations, indigenous peoples, private sector entities, and scientific and technical experts. Four key programs constitute CIF, serving as the financing/investment vehicles via which the organization helps member countries pilot low-emissions and climate-resilient development:
- The Clean Technology Fund (CTF) provides middle income countries with highly concessional resources to explore options to scale up the demonstration, deployment, and transfer of low carbon technologies in renewable energy, energy efficiency, and sustainable transport.
- The $639 million Forest Investment Program (FIP) supports efforts of developing countries to reduce deforestation and forest degradation and promote sustainable forest management that leads to emissions’ reductions and enhancement of forest carbon stocks (REDD +);
- The $1.3 billion Pilot Program for Climate Resilience (PPCR) is helping developing countries integrate climate resilience into development planning and offers additional funding to support public and private sector investments for implementation;
- The $551 million Scaling Up Renewable Energy in Low Income Countries Program (SREP) stimulates energy access and economic growth by working with governments to build renewable energy markets, attract private investment, and target renewable energy technologies that allow for the generation and productive use of energy in households, businesses, and community services.
CIF guiding principles
As CIF explains, three key principles guide, motivate and inform its activities:
- Attracting co-investment stimulate transformation, i.e. stimulating development of markets, increasing the investment potential and enabling financial gain in climate-friendly enterprises and businesses;
- Fostering partnerships: With support from multi-lateral development banks (MDBs), CIF pilot countries lead investment planning and implementation across institutions and stakeholder groups to maximize overall returns – including sharing and exchange of knowledge;
- Learning by doing to achieve results: A new and growing field, CIF serves as a testing and proving ground for climate finance and investment, with results reported and measured annually and distributed widely.
Spurring renewable energy access
Turning to CIF's efforts to spur deployment of renewable energy through expansion of SREP, Bangladesh, Benin, Cambodia, Ghana, Haiti, Kiribati, Lesotho, Madagascar, Malawi, Nicaragua, Rwanda, Sierra Leone, Uganda, and Zambia were invited to join 13 other SREP pilot countries that are “already working to expand energy access and demonstrate the economic, social, and environmental viability of renewable energy.” Commenting on the SREP experience, Program Coordinator Zhihong Zhang commented:
“The growth in the program shows global recognition of renewable energy potential to provide solutions to energy access.”
Forty of the 55 CIF countries eligible to participate in SREP have submitted proposals elaborating on their interest in receiving SREP funding. SREP, according to CIF, “is proving valuable as a central platform upon which many pilot countries are consolidating discussions on national renewable energy policy, planning, and enabling environments.”
Armenia and the Solomon Islands presented their SREP investment plans during the Montego Bay conference. The CIF board endorsed Armenia's $40 million and the Solomon Islands' $14 million plans. Armenia intends to use CIF funds to spur investments in geothermal and utility-scale solar, as well as to support national efforts to meet 21 percent of its electricity needs from renewable sources by 2020. At present, Armenia relies on imported fuels for 70 percent of its electricity generation.
The Solomon Islands is looking to use CIF funds to dramatically increase electricity access in an ecologically, as well as economically, sustainable manner. “Currently 90 percent of energy access is in the capital,” the Solomon Islands representatives noted, “yet 80 percent of the population lives in rural areas on hundreds of islands.” The Solomon Islands government intends to deploy renewable energy mini-grids across 60 rural communities, as well as build grid interconnections and connect to home solar energy systems.
Main image credit: International Institute for Sustainable Development