The SDG Knowledge Hub of the International Institute for Sustainable Development (IISD) provides the February update on global developments in sustainable energy finance.
Sustainable Energy Finance Update: EU Invests in Energy Infrastructure; Energy Efficiency in the Spotlight in Europe, Central Asia
During the month of February, EU countries made significant investments in energy infrastructure, solar power got a boost in Asia and Africa, while projects assessed the environmental impact of hydropower and wind energy. Various energy efficiency programmes sought to reduce demand for energy overall.
This Update brings you news on these and other efforts, which can help realize Sustainable Development Goals (SDGs) 7 (affordable and clean energy), 9 (industry innovation) and 13 (climate action).
Europe Invests in its Energy Infrastructure
The EU recently made significant investments in their energy infrastructure. EU member States agreed to a package of energy measures totaling €444 million from the Connecting Europe Facility, the EU’s funding support programme for infrastructure. Among the 18 projects selected, seven are in the electricity sector and will receive EU support of €176 million, and one project is for a smart grid, receiving €40 million. Five projects were earmarked with €350 million in financing for construction and €94 million will go to 13 studies.
Solar Power Gets a Boost in India, Zambia
Two recent investments, in India and Zambia, focused on boosting solar power capacity. India approved financial support for doubling the capacity of Solar Parks and Ultra Mega Solar Power Projects. The support will help establish at least 50 new solar parks around the country, including in the Himalayan and other rural states with hilly terrain. The project will be set up by 2019-2020 with Government support of 81 billion Indian Rupies and is expected to abate 55 million tonnes of carbon dioxide (CO2) per year over its life cycle.
Zambia signed agreements with the International Finance Corporation (IFC) under the World Bank’s Scaling Solar program, which helps developing countries procure privately-financed solar power at a low cost. This is Zambia’s second engagement with the program, after the first engagement led to auctions for two solar PV plants that attracted several renewable energy developers. Those developers who won in the auction are concluding their agreements with Zambian Government agencies, which are expected to be finalized in May 2017. The World Bank Group’s Board approved a financing and guarantee package for one of the two winning bidders and will review the same for the second winner in the coming weeks.
Hydropower in the Spotlight in West Africa and South East Asia
Hydropower is the focus of recent investment to reform São Tomé and Príncipe’s energy sector in the Power Sector Recovery Project. Reforms include rehabilitating and expanding the Contador Hydroelectric project and strengthening the national utility Empresa de Agua e Electricidade de São Tomé e Príncipe (EMAE) over a five year programme on the energy sector. The World Bank will contribute US$16 million and the European Investment Bank (EIB) will contribute US$13 million to the project.
Finance supporting sustainable energy planning in Myanmar will help develop hydropower for the future of the country’s energy sector. With support from the International Finance Corporation (IFC), recent workshops brought together over 350 people from civil society, the private sector and government to discuss environmental and social values related to hydropower as part of a strategic environmental and social assessment. The assessment is expected to be used as a planning tool to improve the sustainability of the hydropower sector.
Wind Energy’s Biodiversity Impact Assessed
Like hydropower, wind energy also comes with some environmental impacts that need to be assessed to ensure the sustainability of projects. For the first time in Eastern Europe, the Middle East and North African regions, a study will examine efforts to minimize the effects of wind power on biodiversity. The IFC-supported research hopes to help wind farms in Jordan comply with international best practices related to biodiversity, and encourage investment in sustainable energy.
Waste-to-energy projects Get a Boost in China, Benin
In China, through an public-private partnership (PPP) agreement between the Asian Development Bank (ADB), ten commercial banks and the Dynagreen Environmental Protection Group. The funds will help provide small and medium-sized cities in China with advanced waste-to-energy technologies. Such partnerships are central to SDG 17.16 (multi-stakeholder partnerships)
In Benin, a project aims to improve short and long-term picture of the energy sector. Supported by the Global Environment Facility – Least Developed Countries Fund (GEF-LDCF) and the UN Development Programme (UNDP), the project aims plans to build four biomass gasifier installations to transform agricultural residues (biomass) into energy, while also supporting long-term planning that takes into account changes to the agricultural sector.
In developments related to other sources of renewable energies, the World Bank approved a US$49 million grant that aims to facilitate investment in upstream geothermal power generation in Indonesia.
Boosting Buildings’ and Cities’ Energy Efficiency in Europe, Central Asia
Most energy efficiency-related investments are in buildings, and in February, various projects aimed at increasing the energy efficiency of buildings were approved in Europe, Central Asia and Mongolia.
In Kazakhstan, the European Bank for Reconstruction and Development (EBRD) is supporting the installation of heat meters in residential buildings with a USD 27 million loan. The project aims to promote efficient use of energy in the extreme temperatures of Kazakhstan. As featured by the GEF, schools in Kazakhstan are already improving their energy efficiency and innovating on new green ideas, such as underground greenhouses.
Focusing on commercial properties, the IFC extended a €50 million long-term loan to Grivalia Properties, a leading real estate investment company in Greece, in help support energy efficiency in the commercial property sector. The investment aims to enable renovations and other improvements in Grivalia’s commercial properties across Greece.
The IFC is also supporting energy efficiency in buildings in Mongolia through a new Memorandum of Understanding (MOU) to jointly develop mandatory regulations and voluntary policies to encourage green buildings. The project aims to improve the energy efficiency of buildings in one of the most urbanized countries in Asia, many of which rely on inefficient household stoves or coal-based heating systems contributing to poor air quality in the winter.
EBRD is involved in a uniquely structured project to help promote energy efficiency in Latvia. EBRD will provide a €4 million loan to the Latvian Baltic Energy Efficiency Facility (LABEEF) and Funding for the Future will invest €1 million to become a shareholder in the company. In turn, LABEEF will provide long-term financing to energy service companies for energy efficiency in residential and public buildings. This arrangement aims to help overcome the shortage of long-term financing available for energy efficiency in Latvia. In is more usual funding model, EBRD is providing a €30 million grant to the next phase of the Regional Energy Efficiency Programme in Albania, Bosnia and Herzegovina, Macedona, Kosovo, Montenegro, and Serbia.
Streetlights are a key intervention for energy efficiency in several new initiatives and contribute to SDG 11.6 (reduce the adverse per capita environmental impact of cities). In ten Ukrainian cities, NEFCO will provide a loan for a wide range of measures to improve energy efficiency in daycares and schools. Five cities will replace streetlights with light-emitting diode (LEDs). Albania’s capital, Tirana, will undergo a range of sustainable initiatives, including promoting more efficiency streetlighting, with support from the EBRD. Antigua and Barbuda will also see LED streetlights through support from the Caribbean Development Bank (CDB) that will replace over 14,000 streetlights.