COP27: $1trillion required in green energy annually to achieve zero carbon
The Ministry of International Cooperation (MIC) announced that The Sharm El-Sheikh Guide to Just Financing developed a number of recommendations aimed at supporting countries' ability to expand green energy projects and efforts to mitigate and adapt to the repercussions of climate change COP27 which requires an increase in annual investments in clean energy in developing countries to $1 trillion annually.
The MIC stated during COP27 that the “Sharm El-Sheikh Guide to Just Financing” stresses the importance of developing results-based financing (RBF), on the basis of which financing is disbursed based on certain results and effects that have been achieved.
MIC : Effectiveness of the Results-Based Financing Mechanism
The MIC indicated that Guide to Just Financing contains this mechanism which has proven its effectiveness, especially in mobilizing the private sector to contribute its efforts to increase access to renewable energy at the level of the African continent.
The African continent suffers shortage of green energy with the presence of about 600 million people worldwide who do not have access to sustainable, affordable and reliable energy, therefore, the expansion of solar energy systems provides clean electricity at reasonable prices, according to the Guide to Just Financing.
Guide to Just Financing : Reducing the cost of making solar energy systems available to homes
The Guide to Just Financing clarified that results-based financing systems promote reducing the cost of making solar energy systems available to homes, which enhances universal access to energy, as the results-based financing mechanism (RBF) allows financing for the private sector to achieve specific results, stimulate newcomers to the business community and enhance investment attraction.
The Guide reviewed 18 case studies in the energy sector to finance pr
ojects in order to stimulate investments in this vital sector, 11 cases of these have used blended financing, and 7 cases have used tools other than blended financing.
Guide to Just Financing : Successful financing projects and models
The Guide to Just Financing presented some successful financing projects and models, including the project to accelerate the pace of solar energy in Uganda by financing the deployment of home solar energy systems, to compensate for the dependence of families on traditional tools such as kerosene lamps for lighting, so that home solar energy systems represent a suitable alternative, and to address high cost of the solar energy systems, as the adoption of financing systems such as lease-to-own can represent a solution to the problem of high cost.
Green energy strategies are necessary
According to this Guide, clean energy strategies and the expansion of reliance on renewable energy have become a must, especially since the sector contributes 60% of global greenhouse gas emissions, which requires an increase in annual investments in clean energy in developing countries to $1 trillion annually, 7 times the current investments, to reach low carbon development by 2050.
It is worth noting that the the Guide enhances efforts of multilateral cooperation and international partnerships, and develops an international framework for innovative financing, in light of the challenges facing developing countries and emerging economies, particularly African countries, in obtaining financing to achieve their ambitions in the climate agenda, amid the worsening of the climate finance gap, especially in the wake of the COVID-19 pandemic.
The relevant parties has a vital role in facilitating
The Guide confirms that each of the relevant parties has a vital role in facilitating the flow of capital and increasing climate investments in priority sectors, in order to bridge financing gaps, as the non-profit organizations in particular, along with the private sector, can serve, along with development partners and international institutions, as a pivotal and additional source for climate finance and green investment stimulation.
The Minister of International Cooperation has officially issued, during the Finance Day activities the "Sharm el-Sheikh Guidebook for Just Finance", which is a presidential initiative among the initiatives launched by the Egyptian state during the COP27 climate conference, with the participation of many officials and representatives of development partners, including President of the African Development Bank, Vice President of the European Investment Bank, United Nations Envoy for Climate Finance, and President of the Glasgow Financial Alliance GFANZ, Managing Director of Operations at the World Bank Group, as well as Assistant Secretary General and Director of the Regional Office for Arab States of the United Nations Development Program and Vice President of Citibank.
