The SDG Knowledge Hub of the International Institute for Sustainable Development (IISD) provides the November update on global developments in climate mitigation finance.
Climate Mitigation Finance Update: Progress in Mapping and Financing Wind Power; Financing Call for Renewable Energy Projects
The latest updates in climate mitigation finance include financing for projects in solar, wind, and geothermal energy in several countries in Latin America and the Caribbean, Europe, India and Afghanistan. Other notable developments include initiatives to improve enabling conditions for renewable energy deployment through the launch of a global tool for mapping wind power potential and a US$50 million call for developing country funding applications from the International Renewable Energy Agency (IRENA) and Abu Dhabi Fund for Development (ADFD).
Call for Renewable Energy Financing Applications from Developing Countries
In partnership with ADFD, IRENA has launched a US$50 million call for applications for renewable energy projects in developing countries, in the sixth of seven annual funding cycles under a US$350 million project facility. Speaking about the facility’s aim to provide stable funding for “one of the most economic choices for new power generation around the globe,” IRENA Director-General Adnan Z. Amin highlighted that renewable energy deployment expands energy access, improves health and welfare, creates jobs and drives economic growth. Projects financed in the previous rounds under the facility are estimated to have added 100 MW in renewable energy capacity, providing improved energy access to more than 1 million people in Asia, Latin America and Small Island Developing States (SIDS).
Wind Power Mapping Tool and Project Financing Agreed
A web-based tool to help policymakers and investors locate areas with high potential for generating wind power was launched by the World Bank and the Technical University of Denmark (DTU). Titled ‘Global Wind Atlas,’ the free publication is expected to be used by governments and commercial developers, and will avoid the need for often costly wind mapping exercises and enable comparison between different areas.
In the first of two financing packages in Argentina for wind power this month, the Inter-American Investment Corporation (IIC), acting on behalf of the Inter-American Development Bank (IDB) Group, has signed a US$104 million deal with Greenwind S.A., an affiliate of Pampa Energía S.A. and Castlelake L.P., for the construction, operation and maintenance of the Corti Wind Farm in Bahía Blanca in the province of Buenos Aires. During its lifetime, the wind farm is expected to avoid 212,931 tonnes of CO2 emissions per year. A second investment involves a US$36 million loan to Central Puerto S.A. (CPSA), signed by IDB Group member IDB Invest, towards the construction, operation and maintenance of a 99 MW wind farm. Expected to avoid a total of 4,548,922 tonnes of CO2 emissions in Argentina over 20 years, the La Castellana project will be co-financed with US$64 million loan from the International Finance Corporation (IFC), and US$5 million loan from the Canadian Climate Fund for the Private Sector of the Americas (C2F).
In other wind power financing news, the European Investment Bank (EIB) has signed a €180 million financing agreement towards the largest onshore wind farm in Europe to date. Sponsored by General Electric and Green Investment Group Limited, the project will see the construction and operation of 179 wind turbines in Piteå in the north of Sweden. In Mexico, a US$100 million loan between EIB and Mexican Government-owned development bank Nacional Financiera (NAFIN) will support the development of wind energy projects in Mexico, including a 200 MW wind farm in Coahuila and a 130 MW installation in Zacatecas.
Solar Power Shines a Light on India and Afghanistan
In solar power project financing, the World Bank and the government of India have signed a US$98 million loan agreement and a US$2 million grant agreement for financing large-scale solar parks in India. The Rewa and Mandsaur districts of Madhya Pradesh will see the first two solar parks to be supported under the project, which aims to provide a significant contribution to India’s objective of installing 100 gigawatts (GW) of solar power by 2022. Solar energy in Afghanistan also received a boost, with a US$44.76 million grant from the Asian Development Bank (ADB) approved, marking the country’s first 20 MW on-grid solar plant. With an estimated 300,000 MW untapped potential within the country, renewable energy in Afghanistan promises to contribute to providing power to the 68% of the population that currently lacks access to grid-connected electricity.
Geothermal Financing in the Caribbean
In geothermal energy project funding, the EU has signed a €12 million grant contribution with the Caribbean Development Bank (CDB) for its Geothermal Risk Mitigation Programme for the Eastern Caribbean. Focusing on Dominica, Grenada, St. Kitts and Nevis, Saint Lucia and St. Vincent and the Grenadines, the Programme aims to enable the development of geothermal energy capacity of up to 60 MW in the region.]
European Investments in Renewable Energy, Energy Efficiency and Forestry
A loan agreement for €150 million has been signed between the EIB and Swedish saw mill company Svenska Cellulosa Aktiebolaget (SCA). Focused primarily on the forestry sector, the project will include measures to support renewable energy and energy efficiency measures in the company’s pulp mill in Timrå, Sweden and the regeneration and replanting of 68 000 hectares of forest. In addition to the climate mitigation benefits, the project is expected to create over 650 new jobs in the rural economy around the Timrå mill.
Linking Northern and Eastern Europe, the Ministry for Foreign Affairs of Finland and Nordic Environment Finance Corporation (NEFCO) have signed a €6 million trust fund agreement, known as the ‘Finland Ukraine Trust Fund.’ the find will provide financial support in the Ukraine, including for energy-efficiency and renewable energy projects in the fields of power and heat generation and district heating networks.