New WEF Alliance Targets Clean Energy Needs in Developing Countries

solar panel field clean energy alliance for developing countries World Economic Forum

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by | Jan 19, 2024

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The World Economic Forum has formed a new alliance that aims to raise awareness about the clean energy needs in developing countries.

Dubbed the Network to Mobilize Clean Energy Investment for the Global South, the alliance includes more than 20 CEOs and government ministers, including from across Colombia, Egypt, India, Japan, Malaysia, Morocco, Namibia, Nigeria, Norway, Kenya and South Africa. Members of the alliance will collaborate to accelerate clean energy capital solutions in emerging market contexts, tackling policies, new business models, de-risking tools, and finance mechanisms.

The launch of the alliance comes as the overall annual investment in clean energy in the Global South needs to triple from $770 billion currently to $2.2 trillion to 2.8 trillion by the early 2030s, according to a World Economic Forum report, Building Trust through an Equitable and Inclusive Energy Transition.

Spending in clean energy has increased, but it is mostly concentrated in a few countries and sectors. In fact, since 2021 more than 90% of investment growth has occurred in advanced economies and China.

“Accelerating the clean energy transition is imperative to address the climate emergency, but current investment levels remain far below the scale and pace of change needed,” Roberto Bocca, head of the World Economic Forum’s Centre for Energy and Materials, said in a statement. “Unlocking this financing today is not only a key first step towards a secure and equitable energy system tomorrow, but represents a clear opportunity for businesses, as emerging economies account for the lion’s share of the global population.”

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The alliance will seek to break down financial barriers to expand clean energy in developing countries. Rania A. Al-Mashat, minister of international cooperation of Egypt, and Samaila Zubairu, president and CEO of the Africa Finance Corporation, will chair the network.

The focus of the network also aims to unlock economic potential in developing countries and emerging markets. The dual opportunity could help mitigate risks in emerging markets while ensuring sustainable growth.

“The perception of high risk has deterred investments in emerging markets, particularly in Africa, over the years; yet, from where I sit, there is no shortage of de-risking instruments and bankable projects that not only deliver profitable returns but also accelerate development impact,” Zubairu said in a statement. “Mobilizing investment for the energy transition is now more urgent. It is time for us to shift the narrative surrounding the financing of clean energy in the Global South from an aid case to a viable investment opportunity, without which we will not reach global net zero.”

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