Paris - The Global Environment Facility (GEF) on Monday pledged $2 million initial funding to kick start the formation of an initiative to promote clean energy investment in developing countries expected to leverage over $100 million in co-financing from partners.
The initiative, Climate Aggregation Platform (CAP), which was launched on Monday, aims to help build pipelines of standardised, low-carbon energy assets in developing countries and to develop low-cost sources of financing, tapping new and diverse investor bases.
Aggregation allows developing country financial institutions, from banks to micro-finance lenders, to make the most of their limited balance sheets.
Speaking during the Energy Day at the 21st Conference of Parties (COP21) to United Nations Framework Convention on Climate Change (UNFCCC) GEF chief executive and chairman, Naoko Ishii, said there is a need to invest in clean energy.
He said they would provide an initial funding of $2 million. “We need to rapidly ratchet up financing support for clean energy in developing countries.
“I'm delighted to announce the launch of the Climate Aggregation Platform to help spur strategic and transformative investments and to accelerate energy efficiency,” Ishii said.
The United Nations Development Programme (UNDP) and Climate Bonds Initiative will implement the programme while the Inter-America Development Bank would be a core partner in demonstration transactions.
UNDP administrator Helen Clark said: “Access to low-cost financing will be essential to the goal of bringing affordable, clean and reliable energy to the citizens of developing countries”.
She added: “I welcome the CAP and am hopeful that, in promoting financial aggregation, it can make a contribution to this important objective”.
Climate Bonds chief executive, Sean Kidney, said CAP was an initial step in addressing the myriad of structural, financial and economic barriers that were hindering the rapid growth of small scale climate friendly projects.
CAP would be launched in 2016 following further project planning and international stakeholder consultations.
The GEF was established in 1992 to help tackle our planet's most pressing environmental problems and has since then provided $14.5 billion in grants and mobilised $75.4 billion in additional financing for almost 4 000 projects.
AFRICAN NEWS AGENCY