Fatih Birol, the Executive Director of the International Energy Agency, confirmed that "the agency will work to ensure that the World Bank, regional development banks, and other institutions prioritize the investment costs in clean energy in developing countries following the recent UN climate change conference COP28." Birol mentioned today, Friday, on the sidelines of an energy conference in Istanbul that "clean energy investments in emerging and developing countries have been steady since 2015, while they nearly doubled globally, with most of the growth coming from China and advanced economies."
Birol told Reuters: "For the International Energy Agency, the main story from now until Baku will be how to find mechanisms that limit risks to ensure a flow of capital to developing and emerging countries." He added that "risks mean that the cost of capital for investment in solar power plants in the developing world can be up to four times higher compared to those in advanced economies, which hinders capital flow."
He explained that "our mission will be to ensure that the World Bank, regional development banks, and the financing sector prioritize funding clean energy, mitigate risks for those investments, and provide affordable financing." He continued: "The world now has more than enough capital. If the World Bank, regional development banks, and financial institutions provide some guarantees and mechanisms to limit risks, money will flow very quickly because the potential is enormous."
Governments around the world agreed at COP28 in Dubai to triple renewable energy generation capacity by 2030 and shift away from fossil fuels, but no agreement was reached on a mechanism to finance the transition to clean energy in developing countries.
