The comprehensive toolbox aims to increase the availability of affordable capital for renewable energy projects
The International Renewable Energy Agency (IRENA) and the Indian G20 Presidency joined forces today to launch a groundbreaking report, titled “Low-Cost Energy Transition Finance,” outlining strategies to expedite the global energy transition through accessible financing.
Developed in close collaboration with India’s Ministry of New and Renewable Energy (MNRE), the report provides a comprehensive toolbox designed to boost the availability of low-cost capital in G20 countries and beyond.
The report was officially introduced during a side-event held at the G20’s 3rd Energy Transition Working Group (ETWG) in Mumbai.
Distinguished speakers at the event included IRENA’s Deputy Director-General, Ms. Gauri Singh, MNRE Secretary, Bhupinder S Bhalla, and India’s Power Ministry Secretary, Alok Kumar.
IRENA’s Director-General, Francesco La Camera, emphasized the urgent need for affordable finance to scale up renewable energy deployment globally in pursuit of the 1.5°C climate goal.
La Camera expressed pride in contributing to the G20’s efforts and providing valuable insights that support India’s Presidency in facilitating access to affordable finance across developing and advanced economies.
According to IRENA’s Preview of the World Energy Transitions Outlook, achieving the desired renewable energy share of about three-quarters in the primary energy mix by 2030 necessitates annual investments averaging over USD 5 trillion.
However, access to funding in emerging and low-income economies remains inadequate and cost-prohibitive, impeding the energy transition’s acceleration.
The report identifies country risk or policy risk as the primary barrier to international institutional capital flows, highlighting the need for enabling frameworks to reduce transaction costs and facilitate technology transfers and foreign direct investments.
By drawing on the success of recent cost reductions in solar and wind power, the report focuses on innovation frameworks that can expedite the scale-up of critical technologies such as hydrogen, offshore wind, and battery storage.
These frameworks encompass technological advancements, business model innovations, market design improvements, and enhanced system operation, driven by factors such as technological maturity, innovation, system integration, increased manufacturing capacity, and reduced labor costs.
Low-cost financing emerges as one of the six key priority areas established by India’s G20 Presidency. In addition to this collaboration, IRENA is working closely with the Presidency on other priority initiatives, including resource efficiency and circular economy strategies in the steel sector.
The launch of the “Low-Cost Energy Transition Finance” report marks a significant milestone in the global effort to accelerate the energy transition, providing valuable guidance and actionable recommendations to enable affordable financing for renewable energy projects worldwide.
As countries strive to meet climate targets, the report’s insights are poised to pave the way for transformative change in the renewable energy landscape.