IEA drives global financial support for clean energy in developing nations post-COP28, tackling investment challenges.
In a recent development, the International Energy Agency (IEA) has committed to a significant goal. They aim to guide major financial institutions like the World Bank. Their focus is on investing in clean energy in developing countries. This initiative follows the COP28 summit held last week. Fatih Birol, the Executive Director of IEA, emphasized this commitment.
A landmark decision was made at the COP28 United Nations climate conference in Dubai. World governments agreed to a bold objective. They plan to triple renewable energy capacity by 2030. This also includes moving away from fossil fuels. However, a key challenge emerged. There was no agreed method to fund clean energy transitions in developing nations.
Birol, addressing Reuters, shed light on IEA's upcoming focus. The agency will explore ways to lower investment risks. This is crucial for capital flow to developing and emerging countries. The next climate summit in Baku next year will be a focal point for these efforts.
Investing in solar plants in the developing world faces significant hurdles. The cost of capital is up to four times higher than in advanced economies. This disparity hinders capital flow, as noted by Birol.
Birol outlined IEA's key role. The agency will work towards financing clean energy efficiently. This includes reducing investment risks and providing concessional funding. Such steps are vital for the World Bank and regional development banks. The finance sector's involvement is also crucial.
Birol remains optimistic about global capital availability. He believes that with appropriate guarantees and risk-reducing measures, investment will surge. The potential for growth in this sector is immense, he added.
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