The Inter-American Development Bank has signed an agreement to provide financial support of up to $100 million to the International Renewable Energy Agency’s Energy Transition Accelerator Financing platform.
The IDB plans to co-finance renewable energy projects and energy transition technologies in Latin America and the Caribbean, Irena said in a statement on Wednesday.
“As the climate tipping point nears, the urgency for action on the energy transition has never been more pressing,” said Francesco La Camera, the Abu Dhabi-based agency's director general (pictured below).
“With their invaluable expertise and substantial resources, the IDB's collaboration will have a profound impact in Latin America and the Caribbean, catalysing the energy transition and driving significant progress on energy access and security.”
The Etaf platform, also supported by the UAE, has surpassed its initial target of $1 billion by the end of the decade.
With investments from the IDB and other partners, the total commitments now amount to $1.25 billion.
“As the IDB increases its climate ambition, we must mobilise more capital for low-carbon technologies,” said Ilan Goldfajn, IDB's president.
In May, Abu Dhabi clean energy company Masdar signed an initial agreement with 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 $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 the adoption of solar and wind power, the International Energy Agency said in a report last 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.
Investment in renewable energy needs to double to more than $4 trillion by the end of the decade to meet net-zero emissions targets by 2050, the agency said in its World Energy Outlook last year.
The agency's Stated Policies Scenario, which is based on the latest policy settings worldwide, expects clean energy investment to rise to slightly more than $2 trillion by 2030.
