The Opec Fund for International Development has signed an agreement to provide financial support of up to $250 million until 2030 to the International Renewable Energy Agency (Irena)’s Energy Transition Accelerator Financing platform.
The platform is designed to back new renewable energy projects in developing countries.
The partnership between the Opec Fund and Irena also expands the platform's global reach and ability to attract interest from other international financing institutions, multilateral development banks, development financial institutions, donors and corporate sector entities, the fund said in a statement on Monday.
“This collaboration marks an important milestone in our joint efforts to tackle the twin challenges of climate change and energy poverty by this innovative platform,” said Abdulhamid Alkhalifa, Opec Fund's director-general.
“It will help to progress an inclusive and just energy transition that leaves no one behind with investments, new technologies and knowledge sharing.”
The Etaf platform, supported by the UAE and Abu Dhabi-based Irena, has surpassed its initial target of $1 billion by the end of the decade.
With investments from the Opec Fund and other partners, the total commitments now amount to $1.15 billion.
“Accelerating a renewables-based energy transition is imperative in the fight against climate change, as it enables us to simultaneously tackle pressing energy challenges and alleviate persistent social inequalities,” said Francesco La Camera, director-general of Irena.
Last month, Abu Dhabi’s clean energy company Masdar signed an initial agreement with the Irena to co-operate on a research project that will lead to the tripling of global renewable energy capacity by 2030.
The agreement is expected to provide a global baseline for renewable energy with a focus on solar, wind, hydropower, geothermal and other technology including battery storage.
Investments in renewable energy technology reached a record of $1.3 trillion last year but that figure must rise to about $5 trillion annually to meet the Paris Accord target of limiting temperature increases to 1.5 °C above pre-industrial levels, Irena said in its World Energy Transitions Outlook 2023 preview.
Renewable capacity must grow from about 3,000 gigawatts now to more than 10,000 gigawatts in 2030, at an average rate of 1,000 gigawatts annually, it said.
Global additions of renewable power capacity are expected to increase by a third this year as growing policy momentum, higher fossil fuel prices and energy security concerns drive adoption of solar and wind power, the International Energy Agency said in a report this month.
The growth will continue next year, with the world’s total renewable electricity capacity rising to 4,500 gigawatts, equivalent to the total power output of China and the US combined, the Paris-based agency said.