National News

New initiative to foster clean energy investment

A new multi-million dollar initiative to promote clean energy investment in developing countries, Malawi inclusive, has been announced at the COP21 climate talks in Paris.

The Global Environment Facility (GEF) will provide $2 million (about K1.2 billion) in initial funding to help kick-start the formation of the Climate Aggregation Platform (CAP) in 2016.

Making the announcement during Energy Day at COP21 on Monday, Naoko Ishii, GEF CEO and Chairperson said the CAP is expected to leverage over $100 million (about K61 billion) in co-financing from different partners, including from the Inter-American Development Bank (IDB).

About 150 world leaders attended the opening of Cop21
About 150 world leaders attended the opening of Cop21

The CAP aims to help build pipelines of standardised, low-carbon energy assets in developing countries and to develop low-cost sources of financing for these assets, tapping new and diverse investor bases.

“We need to rapidly ratchet up financing support for clean energy in developing countries. I’m delighted to announce the launch of the Climate Aggregation Platform to help spur strategic and transformative investments and to accelerate energy efficiency,” Ishii said.

The United Nations Development Programme (UNDP), together with the Climate Bonds Initiative (CBI), will implement the CAP programme. The IDB will be a core partner in demonstration transactions.

UNDP administrator, Helen Clark said access to low-cost financing will be essential to bringing affordable, clean and reliable energy to citizens of developing countries.

“I welcome the CAP and I am hopeful that, in promoting financial aggregation, it can make a contribution to this important objective,” Clark said.

On the other hand, CEO for Climate Bonds Sean Kidney said CAP is an initial step in addressing the myriad of structural, financial and economic barriers that currently hinder the rapid growth of small scale climate friendly projects.

The CAP will be structured around three core activities of a global working group, to promote engagement and coordination amongst key finance and industry stakeholders and promote the standardisation essential to aggregation.

Aggregation is important to allow developing country financial institutions, from banks to micro- finance lenders so that they make the most of their limited balance sheets.

The aggregation, or bundling together, of small loans and assets aims to create investment products that meet the large-scale needs of institutional investors including global pension funds and insurance funds.

The operational launch of the CAP will take place in 2016 following further project planning and international stakeholder consultations.

Sellina Kainja

Online Editor | Social Media Expert | Earth Journalism Network Fellow | Media Trainer | Columnist

Related Articles

Back to top button