16 June 2022| Articles
With a mandate from countries around the world to support them in their transition to a sustainable energy future, the International Renewable Energy Agency (IRENA) is driving the acceleration of the energy transition through practical tools, policy advice and knowledge exchange. Despite progress, the transition needs to keep up with the worsening climate crisis and the limited timeline to achieve the climate and sustainable development goals.
As members are increasing their focus on investment and project development in the midst of a global urgency to enhance the scale and speed of renewable energy deployment, IRENA enhances its project-oriented activities. The Agency responds to the members’ needs by creating a dedicated institutional space for project facilitation, which led to the Project Facilitation and Support (PFS) division. PFS is tasked to lead the Agency’s ‘groundwork’ in providing members with access to finance and investment in support of the implementation of their Nationally Determined Contributions (NDCs).
“Through PFS, IRENA is consolidating project facilitation works which include project-based capacity building and technical assistance to enable frameworks and establish a pipeline of investment-ready projects,” said Ahmed Badr, IRENA Director of PFS. In that respect, collaboration becomes increasingly crucial for IRENA’s work. Robust multi-dimensional partnerships are currently growing among IRENA, members and states in accession, as well as relevant stakeholders along renewable project-based value chain.
But projects need financing. This is also an area that PFS is supporting members with. To ensure that the energy transition investment needs are met to reach a global, inclusive net zero future, PFS established a partnership that builds on the strong relationship with the United Arab Emirates (UAE) via the IRENA-Abu Dhabi Fund for Development (IRENA-ADFD) Facility. The partnership gave birth to an inclusive, multi-stakeholder climate finance platform, which was launched on the sidelines of the COP 26 United Nations Climate Summit in Glasgow last year. With the aim to fund a total deployment of 1.5 GW renewable power by 2030, the Energy Transition Accelerator Financing (ETAF) Platform has secured USD 400 million anchor funding from ADFD out of the USD 1 billion target.
As the first global climate finance partnership from the Middle East to the world, ETAF will facilitate capital mobilisation to scale up the implementation of renewable projects and decarbonisation technologies in developing countries and emerging markets. Today, ETAF has entered a new phase with Masdar joining as another partner. This brings ETAF closer to its target and more resources for its technical assistance works.
Serving as the platform’s secretariat, IRENA will channel and recommend a robust pipeline of renewable projects for funding consideration by ETAF partners. IRENA through ETAF is managing matchmaking activities between potential projects and funding partners. Susana Vivares, IRENA Senior Programme Officer – Renewable Energy Markets explained what IRENA does in this regard, “In this matchmaking process, IRENA is taking on the role of facilitator that ensures the renewable projects are compliant with the funding partners’ procedures, due diligence and in line with their credit financing or investment criteria to increase bankability and attractiveness to investors.”
It is a relatively new role for IRENA, but as Ahmed Badr explained, “It is also an exciting time for the Agency. This role leads us to put more emphasis on investments to bring concrete renewable projects into fruition on the ground.” As such, IRENA contributes to the multiple goals of its members at once; the implementation of their ambitious NDCs and the achievement of their Paris Agreement targets, while serving strategic national objectives such as energy access and security, economic diversification and sustainable impact.