Stockholm (NordSIP) – While funding to support the energy transition has increased at a global level, finding viable, investment-ready projects remains a difficult hurdle to overcome, trapping many emerging economies with unreliable and polluting energy sources.
To help address this bottleneck, the IKEA Foundation and The Rockefeller Foundation partnered to set up a US$1 billion global platform to fight climate change and energy poverty. The platform will launch this year and aims to reduce 1 billion tons of greenhouse gas emissions and to empower 1 billion people with distributed renewable energy (DRE). The ability of such a platform to deploy catalytic capital at a scale that supports the expansion of local renewable energy projects may allow governments to better achieve renewable electrification and development targets. To facilitate the joint investment, The Rockefeller Foundation will incubate the platform in RF Catalytic Capital Inc., which the foundation launched in 2020.
“If global energy consumption doesn’t change from fossil fuels to renewable energy, we will not meet the Paris Agreement ambitions and millions of families will be left behind in poverty. We need to be honest and recognize that the current approach is not delivering the impact the world needs in the time that we have,” said Per Heggenes, CEO IKEA Foundation.
“Our collective ambition is to create a platform that supports renewable energy programmes which can deliver greenhouse gas reductions fast and efficiently and accelerate the energy transition. We need to replace polluting sources of energy with renewable ones, provide access to energy to communities and unlock further funding for sustainable models. Ultimately, we aim to unite countries and communities in urgent action to tackle the climate crisis, reduce 1 billion tons of greenhouse gas emissions and, by doing so, we hope to positively impact the lives of 1 billion people,” Heggenes added.
The platform will focus on renewable energy generated by mini-grid and off-grid solutions, which are located near the point of use, rather than centralised sources like power plants. The new global platform will oversee the organizations’ combined matching funds. It aims to deliver clean and reliable power to the 800 million people worldwide who lack electricity, and a further 2.8 billion who have unreliable access. It will be run as a public charity to manage a concerted effort to rapidly channel development funds to life-changing projects on the ground.
“Millions of lives and trillions of dollars have been lost to Covid 19, forcing people back into poverty after decades of progress. The effects of the climate crisis will make this even worse, which is why we must invest now to reverse this downward spiral,” said Dr. Rajiv J. Shah, President of The Rockefeller Foundation.
He added: “Big, bold, and pioneering collaboration and investment is required not only for the short term, but also the long term, to galvanize a better future. That is why we are announcing our largest commitment to date and joining forces with IKEA Foundation to double that investment. Our partnership will unlock the financing and resources that are essential to provide clean, reliable electricity that improves the lives and livelihoods of people everywhere.”