A group of international development banks and foundations announced Wednesday a $10.5-billion fund to support emerging economies that have growing energy needs.
The group, called the Global Energy Alliance, hopes to attract more donors over the next few weeks. It has at the moment raised $1.5 billion from the Rockefeller Foundation and the Ikea Foundation, as well as $9 billion from international development banks like the African Development Bank or the International Finance Corporation.
This announcement was made at the United Nations Climate Summit in Glasgow. It comes as the Biden administration relies on trillions in private investment to shift global energy systems away form coal, oil, and gas.
Raj Shah, who is the president of Rockefeller Foundation and helped create the alliance, stated that the fund was necessary in order to stimulate investments in clean technology that would not otherwise attract private investors that are looking for high rates of return.
“Accelerating climate transitions in developing countries will not happen if an immediate 20 percent return on every investment is necessary,” Mr. Shah said, adding that such an initiative would require public, philanthropic and private sectors coming together to “leverage innovative finance.”
According to the alliance, it plans to raise $100 billion in private and public capital to expand access and clean energy for a billion people in developing nations, create 150 million jobs, and reduce carbon emissions caused by coal-fired power plants.
The money will be used to support initiatives such the development of mini-electricity networks in certain parts of rural IndiaHelp Indonesia close down its oldest, most polluting coal-fired power stations and develop a hydropower plant in Sierra Leone.