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Advancing Energy Transition in Low and Middle Income Countries Through Innovative Partnerships

SpeakerS:

Aime Williams, Washington Correspondent, Financial Times
Ajay Banga, President, World Bank Group
Dr. Rajiv J. Shah, President, The Rockefeller Foundation

With Core Programming Partner

“I think of electricity as a human right, and I think therefore it's imperative to focus on connecting people to renewable energy.” Ajay Banga
“Scaling this up to reach 300 million people in Africa will, frankly, be the largest public-private partnership for climate or for inclusive development throughout the continent.” Dr. Rajiv J. Shah

Key takeaways:

  • Need for public-private partnerships: The transition to renewable energy in developing countries, especially in Africa, requires collaboration between governments, development banks, private investors, and philanthropic organizations. No single entity can achieve this alone. 
  • Mission 300’s ambitious goal: The World Bank and the African Development Bank have jointly committed $30 billion to promote the energy transition, aiming to electrify 300 million people in Africa by 2030. This initiative seeks to provide access to jobs, healthcare, and education while protecting the planet. 
  • Importance of technical assistance: Many countries lack the capacity to develop bankable projects. Providing technical assistance is crucial for creating high-quality, executable projects that attract private investment. Philanthropic organizations play a key role in offering this support. 
  • Role of philanthropy in collaboration: The philanthropic community is encouraged to work collectively rather than independently. By pooling resources and efforts, they can significantly contribute to large-scale initiatives like Mission 300. There’s an open invitation for more partners to join this collaborative effort.
  • Standardizing projects to attract investment: To mobilize large-scale funding from pension funds and asset managers, there is a need to create a pipeline of standardized, high-quality projects approved by rating agencies. This standardization enables investors to deploy significant capital efficiently. 
  • Developing high-quality carbon credits: Carbon credits are viewed as a vital component of long-term financing for the energy transition. Establishing rigorous frameworks for quality, measurement, and durability is essential to ensure carbon credits are investable and effectively support the shift to renewable energy. 

Action items:

  • Advocate for increased funding to IDA: Encourage governments to provide substantial funding to the International Development Association (IDA) to bolster the World Bank’s capacity to finance significant initiatives like Mission 300.
  • Philanthropic collaboration: Philanthropic organizations should join forces, contributing intellectual and operational support to large-scale projects, thereby maximizing impact and avoiding fragmented efforts. Interested parties are invited to reach out to the leaders of Mission 300. 
  • Support regulatory reforms: Assist and encourage countries to develop and sign compacts that specify regulatory policies and domestic investment reforms, facilitating a conducive environment for renewable energy projects.
  • Develop standardized investment opportunities: Work towards standardizing projects to make them appealing to institutional investors. This involves creating projects that are rated by agencies and meet the investment criteria of large funds.
  • Enhance technical assistance programs: Invest in and expand technical assistance to help countries design and execute bankable renewable energy projects, bridging the capacity gap. 
  • Establish rigorous carbon credit frameworks: Collaborate to develop high-quality carbon credit systems with robust measurement and verification processes, making them reliable instruments for financing the energy transition. 
  • Innovate financial instruments to mitigate risk: Create financial solutions like first-loss funds to protect private investors from potential losses, thereby encouraging more significant investment in renewable energy projects. 

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