Ikea and Rockefeller Foundations Launch $ 10 Billion Clean Energy Campaign

The Ikea and Rockefeller foundations are making their biggest investments to create a fund they hope can finance more than $ 10 billion in small-scale renewable energy projects to try to get more than a billion people out of the world. energy poverty.

Each foundation will provide $ 500 million in venture capital and hope to attract an additional $ 10 billion in funding this year from international development agencies, before opening up to institutional investors to expand investments in energies. renewable in countries like India, Nigeria and Ethiopia.

“It can be commercially viable. There is $ 1 billion in upstream risk taking, and that can unlock tens of billions of dollars. We don’t play here. We have seen it work in India. We know what it takes to be successful ”, Rajiv shah, chairman of the Rockefeller Foundation, told the Financial Times.

Per Hegges, chief executive of the Ikea Foundation, said this presented a “very important” opportunity to tackle the two biggest threats in developing countries: poverty and climate change.

Investing in renewable energy has become big business in Europe and the United States, but the Ikea-Rockefeller platform aims to do something similar with smaller-scale projects in emerging markets. It aims to develop “distributed” renewable energy projects – rather than centralized power plants – mainly in the form of mini solar projects but also micro-hydroelectricity.

The foundations said they have already signed agreements with the International Finance Corporation, an organization affiliated with the World Bank, and the American International Development Finance Corporation and hoped Ikea’s participation would unlock agency support. similar in Europe.

Their goal by the end of this year is to have $ 10 billion in funds from development agencies to top up their $ 1 billion, and then invite commercial investors to support individual projects.

Shah said he believed the platform could eventually grow to $ 100 billion, or even $ 1 billion, using its “philanthropic capital as leverage to leverage business capital.”

He said that since his days as an Obama administration official responsible for the Copenhagen and Paris climate change conferences, he had seen “a lot of commitments made and a lot of good intentions but not a lot of execution.” .

“This has the opportunity to be the largest and most funded investment, targeting the twin goals of lifting people out of poverty, but in a climate-friendly way.”

Hegges said the Ikea Foundation – created by the flatbed furniture retailer to protect it from buyouts and invest in projects to fight inequalities – saw energy poverty as the main obstacle to growth in the poorest countries.

The two foundations have set themselves the goal of reducing 1 billion tonnes of CO2 emissions and lifting 1 billion people out of fuel poverty by the end of the decade.

Shah said the pandemic had delayed development in the poorest countries for up to two decades, and that there was a great need to encourage economic growth in an environmentally friendly way in these countries. “Now is the time to act,” he said.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *