Financing the energy transition in emerging and developing economies - Cecilia Tam
•
0 likes•65 views
OECD workshop on blended finance guidance for clean energy, 7 April 2022, Paris, OECD
Recommended
Recommended
More Related Content
Similar to Financing the energy transition in emerging and developing economies - Cecilia Tam
Similar to Financing the energy transition in emerging and developing economies - Cecilia Tam (20)
More from OECD Environment
More from OECD Environment (20)
Recently uploaded
Recently uploaded (20)
Financing the energy transition in emerging and developing economies - Cecilia Tam
- 1. Financing the energy transition in emerging and developing economies 7 April 2022
- 2. 2 Meeting a net zero emission pathway will require a surge in clean energy investments to USD 4 trillion per year by 2030 Source: OECD/IEA (2021) The global energy transition is an unprecedented opportunity to rebalance economies through sustainable growth and jobs. A massively scale up in finance from all sources is needed to realise this potential. The majority of the increase will need to come from the private sector NZE: Net-zero emission Scenario 0 1000 2000 3000 4000 2016-2020 NZE 2026-2030 Clean electricity Efficiency and end use Low emission fuels billion USD/yr 2016-2020 NZE 2026-2030 Private Public Investments Financing
- 3. But public finance needs to more effectively mobilise commercial finance 3 Source: OECD (2021) Public finance can play a catalytic role by de-risking investments, supporting reforms to improve enabling environments, and supporting project preparation. The international architecture and instruments exist, but need to be improved and scaled rapidly with additional concessional finance to meet the huge investment needs in clean energy.
- 4. Crowding-in commercial finance requires concerted efforts by governments to de-risk and direct investment, whilst continuing to tackle wider barriers to infrastructure investment. 4 A wide range of financial instruments to raise green finance and de-risk investment exist But they need to be scaled rapidly and combined with concerted public sector strategies to crowd-in commercial finance USD 1 trillion cumulative green bond issuance (2020) – use of proceeds Sectoral distribution of de-risking instruments in select countries (USD million) Source: Climate Bonds Initiative 2021 0 20 40 60 80 100 120 140 160 180 200 Biomass & Waste Energy Efficiency Geothermal Hydro Solar Wind Co-investment (equity) Concessional loans Cornerstone stake (fund level) Revenue guarantee Co-financing Other Source:, OECD/IEA 2021 Note:: The above figures provides only a limited set of data and is not intended to represent global totals.
- 5. More effective private capital mobilisation will require the scaling and more effective use of blended finance 5 Blended finance is being used by donors to leverage greater quantities of private capital, but remains small as a share of total ODA disbursements. Best practice guidance on the use of blended finance can support the scaling of instruments; but more public concessional finance, and better coordination between governments, donors, and private finance, is needed to tap into the increasing stocks private finance now committed to net zero. 0 2000 4000 6000 8000 10000 12000 2016 2017 2018 2019 Private finance mobilised towards renewable energy by instrument, USD million Syndicated loans Simple co-financing Shares in CIVs Guarantees Direct investment in companies and SPVs Credit lines Source: OECD (2021)