The World Bank and Agence Française de Développement (AFD) are developing a joint Global Solar Risk Mitigation Initiative (SRMI), an integrated approach to tackle policy, technical and financial issues associated with scaling up solar energy deployment, especially in some of the world’s poorest countries.
Initiated in Delhi at the first International Solar Alliance (ISA) summit in March 2018, the initiative will support the ISA’s goal to reduce costs and mobilize $1,000 billion in public and private investments to finance 1,000 GW of global solar capacity by 2030.
“The World Bank, in partnership with AFD, remains committed to the International Solar Alliance’s goals and to global efforts to fight climate change. Through this new, integrated approach, we hope to further scale up solar energy use by reducing the cost of financing for solar projects and de-risking them, especially in low-income countries,” said Riccardo Puliti, Senior Director of Energy and Extractives at the World Bank.
As the costs for solar power have fallen steadily, solar power is increasingly viewed as a key component in the fight against climate change. However, solar deployment has been slow in some emerging markets, particularly Africa, due to layers of risks perceived by the private sector in financing solar projects. The SRMI aims to change that.
“This partnership with ISA and the World Bank is another step towards achieving the objective of the Paris Agreement of redirecting financial flows in favor of low carbon and resilient development pathways. AFD is glad to join forces with these partners to deliver on the commitments made at COP21, to bring solutions to de-risk potential solar investments and mobilize the private sector to invest in sustainable development” said Rémy RIOUX, CEO of AFD.
The SRMI’s integrated approach will include:
- Support for the development of an enabling policy environment in targeted countries
- A new digital procurement (e-tendering) platform to facilitate and streamline solar auctions
- Targeting relatively small (under 20 MW) solar projects, offering a more comprehensive risk mitigation package of support to a wider range of investors and financiers to promote scale up at later stages. The financial risk mitigation package offered by SRMI will be supported by technical assistance and concerted engagement on planning, resource mapping and power sector reforms to ensure the creditworthiness of utilities in these countries
- Mitigating the residual project’s risks through adequate risk mitigation financial instruments for both on and off-grid projects
The governments of India and France launched the ISA, an international organization as part of the Paris Climate Agreement in 2015 to scale up solar energy resources, reduce the cost of financing for solar projects around the world and ultimately help reach the Sustainable Development Goal on energy (SDG7) of providing access to affordable, reliable, sustainable and modern energy to all. To date, 71 countries have signed the constituting treaty of the ISA, and 48 have ratified it.
Brazilian stakeholders of UNIDO-GEF project trained on biogas
The United Nations Industrial Development Organization (UNIDO), the Ministry of Science, Technology, Innovations and Communications (MCTIC), and the International Center of Renewable Energy (CIBiogás) trained members and partners of the Steering Committee of its GEF Biogas project on the biogas value chain in Brazil – a renewable source of energy produced from the decomposition of organic waste generated by various enterprises, such as farms and restaurants.
“The potential use of biogas arises from the need to pursue sustainability in agribusiness; at the same time, it represents an opportunity for local economic development”, said UNIDO Project Management Specialist Bruno Neves. “Organic waste generated by the Brazilian agricultural production can result in economic, social and environmental gains as the benefits of biogas production can both be internalized by producers and be made available in the form of thermal energy, fuel and electricity”.
Representatives from the Ministry of Agriculture, Livestock and Supply (MAPA); the Ministry of Environment (MMA); the Ministry of Mines and Energy (MME); the Ministry of Planning, Development and Management (MP); the Brazilian Micro and Small Business Support Service (SEBRAE); the Energy Research Company (EPE); the Brazilian Cooperation Agency (ABC); the National Agency of Petroleum, Natural Gas and Biofuels (ANP); Itaipu Binacional and the German cooperation agency (GIZ) participated in the training.
“The main objective of the training was to raise the awareness of ministries and important institutional agents about the need to make rules around renewable energy generation more flexible”, said CIBiogas CEO Rodrigo Regis. “Today, Brazil is very dependent on diesel and we have a growing demand for energy, which biogas can partly supply in a decentralized way, and can develop a new economy for the country, thereby generating jobs, income, development and progress”.
The training included a visit to the Itaipu hydroelectric dam and to a demonstration unit supported by CIBiogas: with a breeding of five thousand pigs, the farm is capable of generating 770 cubic meters of biogas per day, resulting in savings of over US$1,000 per month in energy costs.
“The development of biogas is one of MCTIC’s strategic priorities”, said Rafael Menezes, Coordinator of Innovation at the Ministry’s Secretariat for Entrepreneurship and Innovation. “The Brazilian potential for biogas and biomethane production is underexplored; we have to create public policies and a favorable environment so that we can increasingly tap into this potential”.
The GEF Biogas project “Biogas Applications in Brazilian Agroindustry” foresees local and federal actions to stimulate the sustainable integration of biogas in the national production chain. It is financed by the Global Environment Facility (GEF) and aims to expand the production of renewable energy and strengthen national technology supply chains in the sector.
IRENA and UN Climate Change Join Forces to Accelerate Renewables as Climate Solution
The International Renewable Energy Agency (IRENA) and UN Climate Change (UNFCCC) are jointly ramping up efforts to fight climate change by promoting the widespread adoption and sustainable use of renewable energy. The new strategic partnership builds on a long history of cooperation that aims to ensure a low-carbon climate-resilient world in line with the Sustainable Development Goals and the Paris Agreement.
In a Memorandum of Understanding signed today in Bonn between the heads of IRENA and UN Climate Change, the two organisations have agreed to step up the exchange of knowledge on energy transition, collaborate more closely at expert meetings, increase capacity building to promote renewables and undertake joint outreach activities.
Patricia Espinosa, Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC) said: “The rapid transition to clean energy is crucial to meet the central goal of the Paris Climate Change Agreement, which is to hold the global average temperature rise to as close as possible to 1.5 degrees Celsius.
Time is running out – we are already seeing worsening climate change impacts around the world –including unprecedented heatwaves – and we need to grasp all opportunities to rapidly deploy clean, renewable energy at scale to prevent the worst climate scenarios form becoming a reality.”
Francesco La Camera, Director-General of the International Renewable Energy Agency (IRENA) added: “Falling technology costs have made solar, wind and other renewables the competitive backbone of energy decarbonisation and, together with energy efficiency, the most effective climate action tool available.
Renewable energy delivers jobs, delivers on sustainable development and will deliver a viable climate solution. The renewables-based energy transition provides a clear opportunity to increase ambition in the reviewing process of the national climate commitments under the Paris Agreement. IRENA will fully support countries in realising this opportunity on the way to COP25 in Chile this year and to COP26 in 2020.”
UN Climate Change and IRENA are already working together to promote renewable energy, notably at expert meetings and through publications.
At a practical level, the organisations have jointly provided capacity building on renewable energy through training sessions, for example to several African countries.
IRENA is also one of the biggest supporters of the UNFCCC’s Global Climate Action work, designed to mobilise climate-related activities of cities, regions, businesses and investors.
The new agreement is designed to build on this work, and to expand regional activities in the field of clean technology.
African Development Bank helps power wind of change in Kenya
Africa’s largest wind farm, a €620 million energy masterpiece boosting 365 turbines in northern Kenya, will help the East African nation stay on track to reach its target of 100% green energy by 2030.
Known as the Lake Turkana Wind Power, the 40,000 acre wind farm will generate around 310 megawatts of power to the national grid, enough to light up over 300,000 households.
The winds sweeping the area start in the Indian Ocean and are channeled through the “Turkana corridor” created by Ethiopian and Kenyan highlands. They blow consistently at 11 miles per hour, making this an ideal area for situating wind turbines.
The wind farm will increase the country’s electricity supply by 13%. At its launch earlier this month, President Uhuru Kenyatta said, “We again raise the bar for the continent …Kenya is without doubt on course to be a global leader in renewable energy.”
The African Development Bank served as lead arranger for €436 million in senior credit facilities towards the project cost of €623 million euros. The Bank also provided a partial risk guarantee from the African Development Fund of €20 million for the part of the project devoted to the transmission lines.
Since 2016, the Bank has invested around $4.5bn of its own resources in the energy sector.
African Development Bank President Akinwumi Adesina is in little doubt about the significance of the Bank’s funding. “African economic development is all about political will. We have little time and much to do for the continental transformation needed to light up and power Africa by 2025. Projects like the Lake Turkana Wind Power allow us to leap forward towards our key objectives. The Bank is very proud to be associated with this crucial addition to African infrastructure and clean energy generation”.
The continent has copious, even limitless, supplies of sun, water, and wind, as well as significant amounts of natural gas and other valuable natural resources and raw materials. Acccordingly, its New Deal is investing $12 billion over the next five years and leveraging up to $55 billion to achieve universal access to energy by 2025.
“This is a milestone that we are proud to celebrate. Kids can’t learn much in the dark. School books have to be put down when the sun sets. Life-saving vaccines can’t be preserved. Nurses and mid-wives have to deliver babies using lanterns or torches”, said Wale Shonibare, the Bank’s acting Vice–President for power, energy, climate change, and green growth.
“Turkana’s launch proves that we are determined to continue to work relentlessly to close Africa’s energy gap. Our efforts will be felt in hundreds of thousands of Kenyan households and beyond”, Shonibare added.
The site is Kenya’s largest renewable energy project and its biggest single private sector investment. The plant is expected to reduce power shortages by 12.5% and cut the cost of electricity in Kenya by up to 10%. It is proof of Kenya’s commitment to pursue clean sources of energy and provides a major boost to the country’s international commitments to lower greenhouse gas emissions.
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