IFC Partners with IRENA; Pledges $1 Billion to Scale Up Renewable Energy Projects

The International Finance Corporation (IFC) recently signed a partnership agreement with the International Renewable Energy Agency (IRENA) and pledged $1 billion to accelerate the transition to clean energy in emerging markets.

With this partnership, IFC joins the Energy Transition Accelerator Financing Platform (ETAF), a climate finance mechanism managed by IRENA that advances the global energy transition in IRENA member countries. IFC will bring its expertise to ETAF, increasing the flow of private capital towards ETAF projects, while IRENA will leverage its membership to attract project proposals through the platform.

“We are excited to collaborate with IRENA and other development partners as we bring IFC’s expertise in project financing, blended finance, and energy transition to ETAF,” said Mohamed Gouled, IFC’s Vice President of Industries. “As a leading financier of low-cost renewable energy with a strong track record in supporting the energy transition globally, we are confident that today’s $1 billion pledge will play a critical role in improving access to sustainable and affordable energy across emerging markets.”

Over the past decade, IFC invested and mobilized more than $32 billion in the energy sector, helping to accelerate the clean energy transition and increasing access to electricity for millions of people around the globe through on- and off-grid solutions. IFC has financed more than 8GW of hydropower, 8GW of solar, and 6GW of wind projects to date. IFC also finances battery and other energy storage solutions, as well as transmission and distribution infrastructure, to support network resilience and further renewable energy integration.

“As governments rally behind a renewables-based energy transition to address climate change and foster socio-economic development, we must ensure that the developing world is not left behind,” said IRENA Director-General Francesco La Camera. “With IFC’s strategic alliance and their substantial $1 billion pledge to the ETAF platform, IRENA is now better equipped than ever to drive climate action and contribute to narrowing the energy access gap between its member countries.”

A recent IFC-IEA report, Scaling Up Private Finance for Clean Energy in Emerging and Developing Economies, stresses that public investments alone are insufficient to deliver universal energy access and tackle climate change. To fulfill the climate objectives outlined in the Paris Agreement and meet the increasing energy demands of emerging and developing economies, investments in clean energy in these countries must surpass the $770 billion channeled in 2022 to reach nearly $2.8 trillion by the early 2030s. The report further notes that increased public funding, together with policies and technical assistance, can be used effectively in partnership with private sector capital to reduce project risks and unlock the potential for clean energy in these countries.  

ETAF will source projects on an ongoing basis and act as facilitator, coordinator, and knowledge hub, providing technical support, mobilizing resources, and fostering collaboration. It will support feasible projects and mitigate investment risks through innovative financing solutions, matchmaking of project partners, technical assistance, and project facilitation. ETAF has a current pipeline of projects in Latin America, small island developing states (SIDS), Africa, and Asia.

In a tandem signing today, IFC’s sister agency, the Multilateral Investment Guarantee Agency (MIGA), signed its own partnership agreement with IRENA. Under this agreement, MIGA will contribute its guarantee and insurance instruments to help de-risk energy transition projects in emerging markets.

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