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The Lebanon, natural gas and local political equilibria

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As can be easily foreseen, the huge amount of natural gas that is being discovered throughout the East Mediterranean region is bound to quickly change the whole economic, strategic and military system of the Middle East.

As well as the links between the Greater Middle East and the European Union.

While, before the discoveries of the East Mediterranean region, the primary theme was the network of contacts between the EU West and the Arab-Islamic universe, currently these productive transformations change the internal relations among traditionally producing countries and place  Israel in a new economic context, thus making the EU countries enter this new maritime production system as full members.

Hence it is by no mere coincidence that the first East Mediterranean Gas Forum (EMGS) was organized in Cairo last January.

The Forum participants included Egypt, Italy, the European Union, Cyprus, Greece, Jordan and the Palestinian National Authority.

However, it also included Israel and this is certainly a fact not to be overlooked.

The logic of the meeting, however, is to create – in the short term – a politically and productively cohesive group, capable of maximizing the financial and political effects of this great operation and also avoiding competitive policies by other neighbouring gas areas.

First and foremost the Persian Gulf, but also the coastal areas of the Horn of Africa and the possible exploration areas off the Yemeni coast.

The Conference was sponsored by Schlumberger and Deloitte and hosted by World Oil, Gas Processing& LNG, Hydrocarbon Processing, Petroleum Economist, Pipeline & Gas Journal and, finally, by Underground Construction.

As can be easily imagined, also the large European and North American companies of the sector were present.

It should be noted that, this year, the Forum has also been slightly brought forward, for obvious reasons of strong political and productive needs.

Two countries, namely Syria and the Lebanon, did not participate and over the last few years they have started to exploit their offshore deposits in an autonomous way.

Obviously Syria will primarily support the Russian and Iranian networks towards Central Asia and China, while the Lebanon will use its offshore deposits, which are largely independent from neighboring countries, so as to revive its economy.

Zohr, the great Egyptian gas field, was discovered in 2015. In the future, however, Egypt also wants to become the hub for all the natural gas passages in the region, both to the EU and to the rest of the world.

The Israeli Leviathan and Karish gas fields have already started production, despite some tensions between the private technical and financial managers and the State of Israel, which wants a different use of a part of extractions.

If Israel’s gas transits through the Balkan line to Vienna, or through the Greek-Albanian network and Italy, it will anyway be fundamental for the European economy and its strategic equilibria.

In all likelihood, Israel’s gas will be even more decisive in the first operational version of the Southern Corridor – the one we have called “Viennese” – than in the Greek-Italian one.

As already mentioned, the Lebanon will mainly play the game against the Israeli gas, for both political and eminently economic reasons.

So far the Lebanon has indicated two Exploration and Production Agreements (EPAs) to a consortium led by Total, with the participation of ENI and Novatek, while Norway and the Lebanon are still collaborating for technical and legal issues through the oil for development program, which will last until 2020.

The Lebanon, however, has also completed its LNG import network for domestic electricity production, a primary problem for the country.

There are also several contracts expiring or to be renewed in the small, but very important market of Lebanese gas.

Political factionalism and the many overt and covert alliances of the Lebanon do not allow to have a homogeneous market of its natural gas.

With specific reference to Cyprus, ENI has discovered Block 6, with the wide Calypso deposit inside, while Exxon-Mobil still “drills” Block 10.

It should be recalled that Turkey has recently blocked the SAIPEM 12000 drillship just a few days after Block 3 was discovered. Turkey, however, has not behaved in the same way with Exxon-Mobil Block 10, in which it does not currently show any direct interest.

The problem is well known: Turkey believes that every exploration and processing-selling activity of all Cypriot gas should benefit both island’s communities and hence not only the Greek one.

The Cypriot government is dealing with Total for Block 11 and with ENI and Total for Block 6, but its real big problem is Aphrodite, the gas field  that should be connected to Egypt with a pipeline enabling Egypt to liquefy and transport gas to end markets.

Meanwhile Israel has already started production in 70% of its Leviathan fields, while the Karish and Tamimgas fields have been fully financed and are now operational.

Egypt’s Parliament has also voted for the creation of a new national natural gas Authority and already receives the LNG extracted by ENI in Zahr.

Hence currently the interests of the various gas producing countries tend to coincide and the Conference about which we are talking is very similar to the creation of what in the past – when economy still existed – was called “cartel”.

A cartel that depends, however, on the future distribution networks in Europe, as well as on the possible choice of some players to play the very “American-style” game of shale gas, and on the moves of the Russian Federation, which is entering this market in many regions. A cartel that finally also depends on the reactions of the Iran-Qatar axis and, hence, of the Saudi system that organizes the Emirates’ natural gas.

A very interesting fact was the request made by all participants to create an international gas organization in the region.

A new OPEC of natural gas?

Too early to say, but the idea is still in the minds of many Forum participants.

According to many Chinese analysts, this is highly probable.

It is worth recalling that currently the Forum countries already account for 87% of all the East Mediterranean’s natural gas.

Furthermore, the logic of opening to private investment and the “mutual benefit” criterion make this new gas OPEC a powerful attraction for all the new producing countries, which will not fail to join this network in the future.

Apart from geopolitical assessments and considerations which, however, are not currently clear yet.

Neither Israel nor Palestine can export their gas without passing through Egypt. Hence, in the coming years, the reasons for achieving a lasting peace will be much stronger than usual.

Unless, as someone predicts, we are faced with a very technological and utterly ubiquitous terrorism 2.0, which could take the form of the old Palestinian or “global” jihad or, possibly, of a mass anarchic-populist rebellion, but especially in the West.

Not to mention the new relationship between Palestine and Arab or Islamic countries, which would be changed radically by the new financial autonomy of the Palestinian world.

What are the challenges that the Forum countries must face to become stable producers in such an important and geopolitically sensitive market?

A market that tends to saturation, above all because of the structural economic crisis of Western markets.

Firstly, all deposits are in deep water and offshore, which makes extraction much more expensive than usual.

We are not talking about the cost of the North American shale gas, but we are not far off.

In the minds of many Middle East decision-makers, this linkage to the US and Canadian cost cycle can be very dangerous.

This could also force some competitors, outside the East Mediterranean region, to play the geopolitical and military card of the stable price increase, so as to temporarily taking the Eastern marine deposits off the market.

The geopolitical effects are hard to imagine.

Furthermore the infrastructure to put these huge resources on the market is extremely expensive and still very scarcely developed and will probably carry a very high and currently unpredictable geopolitical risk.

In fact, the standard geopolitical risks are well-known: the war in Syria; terrorism, which would certainly find a new area of action; the ambiguity of a vacuous and aimless Europe, which does not yet know what energy it wants to use in the future, undecided between the rhapsodic purchases of US shale gas and the strong tensions between France and Germany on the Nord Stream 2 gas pipeline, with the related recent agreement on the European Directive for gas pipelines (which regards Ukraine).

The Aachen agreement, although certainly being the basis of future links between France and Germany, clashes with the short and medium-term interests of two EU countries that have different energy networks, based on different geopolitics.

Moreover France and Germany are anyway thwarting the EU common energy policy, with the very recent stop of the South Transit East Pyrenees (STEP) between France and Spain.

It is well-known that Spain is currently the country with the highest re-gasification potential in Europe and France plans to fully exploit the already existing networks on its own.

The more energy prices are competitive at the EU edges, the fewer incentives exist for a common energy policy.

Moreover, on the basis of practical calculations, it can be inferred – with some degree of accuracy – that the political risk, combined with structurally high and not yet competitive extraction costs, has left 36% of East Mediterranean’s gas potential still unexplored and untapped.

However, the structure of the East Mediterranean Gas Forum, which is already based in Cairo, will be open to everybody including European countries, which could thus escape the grip of a “German-style” energy policy – the last and definitive phase of Southern Europe’s exclusion from the EU centres of power.

For the time being Turkey will not be part of the EMGF.

And it is by no mere coincidence that also the Lebanon will not be a member.

The reason is simple. There are very old tensions between Turkey and Cyprus but, as early as 2003, Turkey has denounced the agreements on maritime borders signed by Cyprus, considering that, according to Turkey, Cyprus – as EU Member State – cannot represent the two local communities, namely the Greek and the Turkish ones, and hence has no full international legal capacity.

Secondly, Turkey believes that Cyprus’ autonomy in defining its Special Economic Zones should be reduced significantly.

Moreover Turkey still thinks that also the current Cypriot Economic Zones are often in areas which are de facto in Turkish waters.

Hence, as early as 2008, Turkey has been rejecting all oil exploration activities in Cyprus and its disputed waters.

Furthermore Turkey intends to promote only its own exploration activities, always in the maritime area attributed to Cyprus.

Turkey’s relations with Greece are certainly not performing better. For years Erdogan has been claiming many Greek islands in the Aegean Sea. Not to mention the air crash, caused by an attack of Turkish fighters, which cost the life of a Greek pilot in April 2018.

As early as his visit to Greece in 2017, Erdogan has been constantly calling for the reform of the 1923 Treaty of Lausanne.

This refers to Turkey’s taking possession of the border areas with Greece that – according to the long-standing Turkish polemic in this regard -were “taken away” by Westerners to be given to Greece.

Erdogan strongly argues against Greece’s right of oil and gas extraction in certain sea areas, again on the border between the two countries, albeit  outside the Cypriot region, that he believes are part of a new finally legitimate border between Turkey and the Greek islands.

Turkey does not even agree on the current relations between Greece and Libya, given that Turkey repeatedly argues with Greece for its direct oil operations on the Libyan continental shelf, which it believes it can claim for a greater share.

However, there is also a further dispute between Turkey and Egypt.

Erdogan, in fact, has never fully accepted the coup of the Egyptian military services that in 2013 – in eleven days only -overthrew Mohammed Morsi and his Muslim Brotherhood’s government in Cairo.

Moreover, at the time, Erdogan -who has still many links with the Ikhwan – even asked the UN Security Council to impose specific sanctions on  Egypt and its internal operations against a government that certainly toppled Morsi’s democratically elected government, which anyway resulted from a great but obscure media, political and strategic operation, namely the Arab springs.

It is worth recalling that a deputy-director of CIA, Michael Morell, wrote in one of his memoirs, that the “Arab springs” were orchestrated and engineered by the Agency to foster popular uprisings “against Al Qaeda”.

The results of this crazy reasoning is before us to be seen. Erdogan, however, does not give up and often demands the release of all political prisoners held in Egyptian jails.

Yet the tension of this true mad card of the East Mediterranean region, namely Turkey, mounts even with Israel, which was once its best ally throughout the Middle East, when Turkey still was the heir of the old “secular” Republic of Atatűrk, with the young Turks who trained to seize power in the many Lodges of the Grand Orient of Italy scattered throughout the Ottoman Empire.

We can also recall the tension between Israel and Turkey during the Operation “Cast Lead” of 2008-2009 or the issue of the Marmara ships in 2010.

The situation between the two countries has never returned to normalcy, despite Israel’s apologies to Turkey, quickly organized by the United States in 2013 and the subsequent normalization of 2016, partly justified by the new energy scenario emerging in the East Mediterranean region.

Then there was the expulsion of the Israeli Ambassador from Ankara in 2018and Erdogan accusing Israel of “genocide”. Finally the choice, which Turkey considers strongly prompted and desired by Israel, to move the US Embassy to Jerusalem.

Hence, on the one hand, the East Mediterranean’s oil and gas extraction requires a very high degree of collaboration between all the parties involved, while, on the other, it is the exactly the new Eastern wealth to create new rifts and fuel old tensions.

In fact the perception of an “aggressive” Turkish behavior is currently extremely widespread among all the participants in the Cairo Forum (but obviously not in Italy).

This tension, however, also affects the Lebanon, where many leaders still believe that the Forum is primarily targeted against their country.

In short, especially with this new and recent government led by Saad Hariri, the Lebanon believes it can manage, on its own, to effectively extract and monetize its maritime gas resources.

In fact, some Ministers of this Hariri-Hezbollah’s government maintain that the Lebanon could be connected to Europe through Northern Turkey (and this is another temptation for Turkey) via the Arab Gas Pipeline, although obviously, the expansion of this network with the pipeline in Syria is to be completed yet.

However, there would also be the line through Egypt, again using the Arab Gas Pipeline.

In short, the Lebanon thinks it has been thrown out, but it will soon realize that there is the possibility – also and especially with a Forum in which there is also Israel – to use at best and, above all, soon the distribution systems put in place by the Forum.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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Energy transition is a global challenge that needs an urgent global response

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COP26 showed that green energy is not yet appealing enough for the world to reach a consensus on coal phase-out. The priority now should be creating affordable and viable alternatives 

Many were hoping that COP26 would be the moment the world agreed to phase out coal. Instead, we received a much-needed reality check when the pledge to “phase out” coal was weakened to “phase down”. 

 This change was reportedly pushed by India and China whose economies are still largely reliant on coal. The decision proved that the world is not yet ready to live without the most polluting fossil fuels. 

 This is an enormous problem. Coal is the planet’s largest source of carbon dioxide emissions, but also a major source of energy, producing over one-third of global electricity generation. Furthermore, global coal-fired electricity generation could reach an all-time high in 2022, according to the International Energy Agency (IEA).

 Given the continued demand for coal, especially in the emerging markets, we need to accelerate the use of alternative energy sources, but also ensure their equal distribution around the world.

 There are a number of steps policymakers and business leaders are taking to tackle this challenge, but all of them need to be accelerated if we are to incentivise as rapid shift away from coal as the world needs. 

 The first action to be stepped up is public and private investment in renewable energy. This investment can help on three fronts: improve efficiency and increase output of existing technologies, and help develop new technologies. For green alternatives to coal to become more economically viable, especially, for poorer countries, we need more supply and lower costs.

 There are some reasons to be hopeful. During COP26 more than 450 firms representing a ground-breaking $130 trillion of assets pledged investment to meet the goals set out in the Paris climate agreement. 

 The benefits of existing investment are also becoming clearer. Global hydrogen initiatives, for example, are accelerating rapidly, and if investment is kept up, the Hydrogen Council expects it to become a competitive low-carbon solution in long haul trucking, shipping, and steel production.

 However, the challenge remains enormous. The IEA warned in October 2021 that investment in renewable energy needs to triple by the end of this decade to effectively combat climate change. Momentum must be kept up.

 This is especially important for countries like India where coal is arguably the main driver for the country’s economic growth and supports “as many as 10-15 million people … through ancillary employment and social programs near the mines”, according to Brookings Institute.  

This leads us to the second step which must be accelerated: support for developing countries to incentivise energy transition in a way which does not compromise their growth. 

Again, there is activity on this front, but it is insufficient. Twelve years ago, richer countries pledged to channel US$100 billion a year to less wealthy nations by 2020, to help them adapt to climate change. 

The Organization for Economic Cooperation and Development estimates that the financial assistance failed to reach $80 billion in 2019, and likely fell substantially short in 2020. Governments say they will reach the promised amount by 2023. If anything, they should aim to reach it sooner.

There are huge structural costs in adapting electricity grids to be powered at a large scale by renewable energy rather than fossil fuels. Businesses will also need to adapt and millions of employees across the world will need to be re-skilled. To incentivise making these difficult but necessary changes, developing countries should be provided with the financial support promised them over a decade ago.

The third step to be developed further is regulation. Only governments are in a position to pass legislation which encourages a faster energy transition. To take just one example, the European Commission’s Green Deal, proposes introduction of new CO2 emission performance standards for cars and vans, incentivising the electrification of vehicles. 

This kind of simple, direct legislation can reduce consumption of fossil fuels and encourage industry to tackle climate change.

Widespread legislative change won’t be straightforward. Governments should closely involve industry in the consultative process to ensure changes drive innovation rather than add unnecessary bureaucracy, which has already delayed development of renewable assets in countries including Germany and Italy. Still, regardless of the challenges, stronger regulation will be key to turning corporate and sovereign pledges into concrete achievements. 

COP26 showed that we are not ready as a globe to phase out coal. The priority for the global leaders must now be to do everything they can to drive the shift towards green energy and reach the global consensus needed to save our planet.

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Pakistan–Russia Gas Stream: Opportunities and Risks of New Flagship Energy Project

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source: twitter

Russia’s Yekaterinburg hosted the 7th meeting of the Russian-Pakistani Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation on November 24–26, 2021. Chaired by Omar Ayub Khan, Pakistan’s Minister for Economic Affairs, and Nikolai Shulginov, Russia’s Minister of Energy, the meeting was attended by around 70 policy makers, heads of key industrial companies and businessmen from both sides, marking a significant change in the bilateral relations between Moscow and Islamabad.

Three pillars of bilateral relations

Among the most important questions raised by the Commission were collaboration in trade, investment and the energy sector.

According to the Russian Federal Customs Service, the Russian-Pakistani trade turnover increased in 2020 by 45.8% compared to 2019, totaling 789.8 million U.S. dollars. Yet, there is still huge potential for increasing the trade volume for the two countries, including textiles and agricultural products of Pakistan and Russian products of machinery, technical expertise as well as transfer of knowledge and R&D.

Another prospective project discussed at the intergovernmental level is initiating a common trade corridor between Russia, the Central Asia and Pakistan. Based on the One-Belt-One-Road concept, launched by China, the Pakistan Road project is supposed to create a free flow of goods between Russia and Pakistan through building necessary economic and transport infrastructure, including railway construction and special customs conditions. During the Commission meeting, both countries expressed their intention to collaborate on renewal of the railway machines fleet and facilities in Pakistan, including supplies of mechanized track maintenance and renewal machines; supplies of 50 shunting (2400HP or less) and 100 mainline (over 3000HP) diesel locomotives; joint R&D of the technical and economic feasibility of locomotives production based in the Locomotive Factory Risalpur and other. The proposed contractors of the project might be the Russian Sinara Transport Machines, Uralvagonzavod JSC that stand ready to supply Pakistan Railway with freight wagons, locomotives and passenger coaches. In order to engage import and export activities between Russian and Pakistani businessmen, the Federation of Pakistan Chamber of Commerce signed a memorandum with Ural Chamber of Commerce and Industry, marking a new step in bilateral relations. Similar memorandums have already been signed with other Chambers of Commerce in Russian regions.

— Today, the ties between Russia and Pakistan are objectively strengthening in all areas including economic, political and military collaboration. But we, as businessmen, are primarily interested in the development of trade relations and new transit corridors for export-import activities. For example, the prospective pathways of the Pakistan-Central Asia-Russia trade and economic corridor project are now being actively discussed at the intergovernmental level, — said Mohsin Sheikh, Director of the Pakistan Russia Business Council of the Federation of Pakistan Chambers of Commerce and Industry. — For Islamabad, this issue is one of the most important. Based on a similar experience of trade with China, we see great prospects for this direction. That is why representatives of Pakistan’s government, customs officers, diplomats and businessmen gathered in Yekaterinburg today.

However, the flagship project of the new era of the Pakistan-Russia relations is likely to be the Pakistan Gas Stream. Previously known as the North-South Gas Pipeline, this mega-project (1,100 kilometers in length) is expected to cost up to USD 2,5 billion and is claimed to be highly beneficial for Pakistan. Being a net importer of energy, Pakistan will be able to develop and integrate new sources of natural gas and transport it to the densely populated industrialized north. At the same time, the project will enable Pakistan—whose main industries are still dependent on the coal consumption—to take a major step forward gradually replacing coal with relatively more ecologically sustainable natural gas. To enable this significant development in the Pakistan’s energy sector, Moscow and Islamabad have made preliminary agreements to carry on the research of Pakistan’s mineral resource sector including copper, gold, iron, lead and zinc ores of Baluchistan, Khyber Pukhtunkhwa and Punjab Provinces.

A lot opportunities but a lot more risks?

The Pakistan Stream Gas Pipe Project undoubtedly opens major investment opportunities for Pakistan. Among them are establishment of new refineries; the launch of virtual LNG pipelines; building of LNG onshore storages of LNG; investing in strategic oil and gas storages. Yet, it seems that Pakistan is likely to win more from the Project than Russia. And here’s why. The current version of the agreement signed by Moscow and Islamabad has been essentially reworked. According to it, Russia will likely to receive only 26 percent in the project stake instead of 85 percent as it was previously planned, while the Pakistani side will retain a controlling stake (74 percent) in the project.

Another stranding factor for Russia is although Moscow will be entitled to provide all the necessary facilities and equipment for the building of the pipeline, the entire construction process will be supervised by an independent Pakistani-based company, which will substantially boost Pakistan’s influence at each development. Finally, the vast bulk of the gas transported via the pipeline will likely come from Qatar, which will further strengthen Qatar’s role in the Pakistani energy sector.

Big strategy but safety first

The Pakistan Stream Gas Pipeline will surely become an important strategic tool for Russia to reactivate the South Asian vector of its foreign policy. Even though the project’s aim is not to gain a fast investment return and economic benefits, it follows significant strategic goals for both countries. As Russia-India political and economic relations are cooling down, Moscow is likely to boost ties with Pakistan, including cooperation in economy, military, safety and potentially nuclear energy, that was highlighted by Russian Foreign Minister Sergey Lavrov during visit to Islamabad earlier this year. Such an expansion of relations with Pakistan will allow Russia to gain a more solid foothold in the South Asian part of China’s BRI, thus opening up a range of new lucrative opportunities for Moscow.

Apart from its economic and political aspects, the Pakistan Stream Project also has clear geopolitical implications. It marks Russia’s growing influence in South Asia and points to some remarkable transformations that are currently taking place in this region. The ongoing geopolitical game within the India-Russia-Pakistan triangle is yet less favorable for New Delhi much because of the Pakistan Stream Project. Even though the project is not directly aimed to jeopardize the India’s role in the region, it is considered the first dangerous signal for New Delhi. For instance, the International “Extended troika” Conference on Afghanistan, which was held in Moscow last spring united representatives from the United States, Russia, China and Pakistan but left India aside (even though the latter has important strategic interests in Afghanistan).

With the recent withdrawal of the U.S. military forces from Afghanistan, Moscow has become literally the only warden of Central Asia’s security. As Russia is worried about the possibility of Islamist militants infiltrating the Central Asia, the main defensive buffer in the South for Moscow, the recent decision of Vladimir Putin to equip its military base in Tajikistan, which neighbors Afghanistan, seems to be just on time. Obviously, Islamabad that faces major risks amidst the Afghanistan crisis sees Moscow as a prospective strategic partner who will help Imran Khan strengthen the Pakistani efforts in fighting the terrorism threat.

From our partner RIAC

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How wind power is transforming communities in Viet Nam

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In two provinces of Viet Nam, a quiet transformation is taking place, driven by the power of renewable energy.

Thien Nghiep Commune, a few hundred kilometres from Ho Chi Min City, is a community of just over 6,000 people – where for years, people relied largely on farming, fishing and seasonal labour to make ends meet.

Now, thanks to a wind farm backed by the Seed Capital Assistance Facility (SCAF) – a multi-donor trust fund, led by the United Nations Environment Programme (UNEP) – people in the Thien Nghiep Commune are accessing new jobs, infrastructure and – soon – cheap, clean energy. The 40MW Dai Phong project, one of two wind farms run by SCAF partner company the Blue Circle, has brought new hope to the community.

For the 759 million people in the world who lack access to electricity, the introduction of clean energy solutions can bring improved healthcare, better education and affordable broadband, creating new jobs, livelihoods and sustainable economic value to reduce poverty.

“It’s not only about the technology and the big spinning wheel for me. It’s more about making investment decisions for the planet and at the same time not compromising on the necessity that we call electricity,” said Nguyen Thi Hoai Thuong, who works as a community liaison. “The interesting part is I work for the project, but I actually work for the community and with the community.”

While the wind farm is not yet online, a focus on local hiring and paying fair prices for land has already made a big difference to the community.

“I used the money from the land sale to the Dai Phong project to repair my house and invest in my cattle. Currently, my life is stable and I have not encountered any difficulties since selling the land,” said Ms. Le Thi Doan.

Powering change

The energy sector accounts for approximately 75 per cent of total global greenhouse gas emissions (GHGs). UNEP research shows that these need to be reduced dramatically and eventually eliminated to meet the goals of the Paris Agreement.

Renewable energy, in all its forms, is one of humanity’s greatest assets in the fight to limit climate change. Capacity across the globe continues to grow every year, lowering both GHGs and air pollution, but the pace of action must accelerate to hold global temperature rise to 1.5 °C this century.

“To boost growth in renewables, however, companies need to access finance,” said Rakesh  Shejwal, a Programme Management Officer at SCAF. “This is where SCAF comes in. SCAF works through private equity funds and development companies to mobilize early-stage investment low-carbon projects in developing countries.”

The 176 projects it seed financed have mobilized US $3.47 billion to build over one gigawatt of generation capacity, avoiding emissions of 4.68 million tons of carbon dioxide (CO2) equivalent each year.

But SCAF’s work isn’t just about cutting emissions. It is bringing huge benefits across the sustainable development agenda: increasing access to clean and reliable electricity and boosting communities across Asia and Africa. SCAF will be potentially creating 17,000 jobs.

This is evident in Ninh Thuan province, where the Blue Circle created both the first commercial wind power project and the first to be commissioned by a foreign private investor in Viet Nam.

Here, the Dam Nai wind farm has delivered fifteen 2.625 MW turbines, the largest in the country at the time. These will generate approximately 100 GWh per year. They will avoid over 68,000 tCO2e annually and create more than an estimated 302 temporary construction and 13 permanent operation and maintenance jobs for the local community.

Students from the local high school in Ninh Thuan Province were also given the opportunity to meet with engineers and technicians on the project, increasing their knowledge about how renewable energy works and opening up new career paths.

SCAF, through its partners, is supporting clean energy project development in the Southeast Asian region and African region. SCAF has more than a decade of experience in decarbonization and is currently poised to run till 2026.

UNEP

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