This blog contains articles and commentary on Climate Change / Global Warming. These changes will have an affect on the entire planet and all of us who reside therein.
Life as we know it will change drastically. There is also the view that there is a high likelihood of climate change being a precursor of conflits triggered by resource shortges.
Thursday, July 7, 2016
Sustainable Energy Finance Update: World Bank and India Team Up on Solar, US$1 Billion Pledged for Sustainable Energy in Pacific
1 July 2016: The New Energy Outlook 2016, a long-term forecast published in June by Bloomberg New Energy Finance
(BNEF), predicts that coal and gas prices will remain lower than expected. However, with wind and solar costs anticipated to dip relatively lower, the Outlook assures that a fundamental transformation toward renewables is still in the works, with US$7.8 trillion in clean energy investments projected from 2016-2040.
With much of this investment being channeled through international finance institutions such as the multilateral development banks (MDBs), these institutions are significantly contributing to Sustainable Development Goal (SDG) 7 (Ensure access to affordable, reliable, sustainable and modern energy for all) and, consequently, SDG 13 (Take urgent action to combat climate change and its impacts), as well as the objectives of the Paris Agreement on climate change, which was adopted in December 2015.
Nonetheless, according to BNEF, it will require trillions more to rein in emissions enough to stay within the Paris Agreement's 2°C limit. This month's Sustainable Energy Finance Update provides a snapshot of the types and extent of emissions-reducing renewable energy projects receiving international public support, as well as those projects aimed at “turning the light on” for those lacking electricity access. [BNEF Press Release] [New Energy Outlook 2016]
Diverse Renewable Energy Technologies Supported Worldwide
A good mix of renewable energy technologies – biomass, hydropower, geothermal, solar, wind, etc. – can both increase the reliability of the power system and decrease risk in an investment portfolio. Much of the finance news this month mixed technologies this way, with many announcements combining support for two or more renewable technologies. In addition, even where investments focused on one specific project type, there were a wide variety of technologies surfacing to the headlines.
A seven-year tranche of a US$130 million loan from the World Bank's International Finance Corporation (IFC) to Banco Galicia, for example, is aimed at financing various sustainable energy projects in Argentina. The projects, ranging from solar, wind, biomass and geothermal to energy and water efficiency projects, will take advantage of Argentina's unique wind and solar resources, grid structure and current energy sector reform process. [IFC Press Release]
During the Pacific Energy Conference hosted by the Government of New Zealand and the EU on 7 June, US$1 billion was committed for sustainable energy projects in the Pacific, representing the potential for every type of renewable energy project imaginable to receive support. Those making pledges included the Asian Development Bank (ADB), Australia, the EU, Japan, New Zealand, the United Arab Emirates (UAE) and the World Bank. [Government of New Zealand Press Release] [Pacific Energy Conference 2016 Website]
Cambodia's investment plan under the World Bank's Climate Investment Funds (CIF) Scaling Up Renewable Energy in Low-Income Countries Program (SREP) was endorsed on 17 June at the CIF governing bodies' meetings. The approved US$30 million is anticipated to leverage US$135 million from other sources, while supporting both solar and biomass energy development, including solar home systems, rooftop solar, mini-grids, utility-scale solar plants and a biomass power project. [CIF Press Release]
IFC is taking its first equity stake in Viet Nam's power sector, investing in a 16% share in Gia Lai Electricity Joint Stock Company to help it expand its hydropower portfolio, as well as invest in wind and solar. With 84.4 megawatts (MW) of installed capacity in small-scale run-of-the-river systems, the company is one of the largest private hydropower developers in Viet Nam. [IFC Press Release]
IFC is also becoming a shareholder of Akfen Energy in Turkey, with a 16.7% stake that will help the company almost triple its renewable energy production. Its current portfolio consists of solar and hydropower operations, and the company is expanding into wind. [IFC Press Release]
With India planning to reach 100 gigawatts (GW) of installed solar capacity by 2022, the World Bank announced it is planning to support the country's efforts with US$1 billion in lending over the course of fiscal year 2017. India is also leading the International Solar Alliance (ISA) of 121 countries, which aims to mobilize US$1 trillion in investments by 2030. The World Bank signed an agreement with ISA in June, under which it will develop a roadmap for mobilizing financing and developing financial instruments for solar. [World Bank Feature Story] [World Bank Press Release]
The Inter-American Investment Corporation (IIC) of the Inter-American Development Bank (IDB), has mobilized financing of US$44.7 million for Los Loros solar photovoltaic (PV) plant in Chile, which will have a total capacity of 54 MW and sell its electricity to the spot market of Chile's Central Interconnected System. The French Development Agency is also lending US$19.7 million to the project. [IDB Press Release]
IIC has also announced the financing for El Salvador's first-ever utility scale solar PV plant, to total 100 MW when finished. Loans from IIC come to US$87.7 million, while additional lending of US$30 million will be provided by the French Development Agency. [IDB Press Release]
A solar auction run by Zambia's Industrial Development Corporation, with assistance from IFC as part of the World Bank's Scaling Solar programme, attracted the lowest solar power tariffs seen in Africa to date. The winning bidders submitted proposals at 6.02¢/kilowatt-hour (kWh) (Neoen S.A.S. and First Solar Inc.) and 7.84¢/kWh (Enel S.A). Over the next year, Neoen and First Solar will build a 45 MW plant and Enel will build a 28 MW plant, which will reduce stress on Zambia's hydropower facilities after two years of drought greatly reduced water levels. [IFC Press Release] More