NEW YORK: In a move to kickstart the energy transition globally, the Ikea Foundation and the Rockefeller Foundation said they will each donate $500 million to support distributed renewable energy generation projects in developing nations.
Roughly 2.8 billion people worldwide don’t have access to reliable power, according to the United Nations, but the two philanthropies estimate these funds will bring energy to a billion of them over the next decade. Further, since the partnership will target communities that might otherwise rely on fossil fuels for power generation either now or in the future, they expect that the combined gift will reduce carbon emissions by a billion metric tones, report agencies.“Really nothing has ever been attempted even close to this kind of scale when it comes to bringing renewable energy to the world’s poor,” Rajiv Shah, president of the Rockefeller Foundation, said.
The two foundations said their money will be used to “de-risk” the kind of projects private capital has tended to shy away from and will be shared through a new third public charity. This, Mr Shah said, will help increase their leverage through private corporations and international development agencies.
The announcement comes as rich countries are under growing pressure to deliver on a decade-old climate finance pledge. In 2009, wealthy nations promised to mobilise $100bn a year by 2020 to help developing countries deal with the worst impacts of climate change and invest in green technologies.
But a meeting of Group of Seven leaders last week merely reiterated a promise to reach the milestone, even though it was supposed to have been achieved last year. They reached $78.9bn in 2018, far short of the $100bn agreed, according to the latest data from the Organisation for Economic Co-Operation and Development.
The question of who pays to tackle climate change is essential to ramping up efforts to rein in temperatures. Poor countries say they need funding if they’re to step up their carbon-cutting ambitions and invest in the technologies needed to wean themselves off fossil fuels. The investment divide is particularly stark in the wake of the Covid-19 pandemic, with rich countries investing trillions in recovery while poor nations struggle to recover.
China has been investing heavily in energy generation in developing nations for well over a decade. In 2019 and 2020 alone – an anaemic period due to the pandemic – China pumped over $20bn into energy projects in developing nations, according to information gathered by The American Enterprise Institute, a Washington-based think tank.This included coal projects and renewable projects such as solar, hydro and nuclear, as well as grid investments.
“We need to be honest and recognise that the current approach is not delivering the impact the world needs in the time that we have,” Per Heggenes, chief executive of the Ikea Foundation, said. “This is all about acceleration.”