Middle East: – Ahead of the 2023 United Nations Climate Change Conference (COP28), taking place in Dubai (30 November – 12 December 2023), the globally leading professional services firm, Deloitte, released a report titled Financing the Green Energy Transition, showcasing that new cost-reducing finance instruments can help de-risk green projects in developing economies while making investing in these projects more attractive, helping to fuel a global just energy transition.
Achieving net-zero greenhouse gas emissions by 2050 will require an annual global investment in the energy sector ranging from US$5 trillion to US$7 trillion. However, the world currently invests less than US$2 trillion each year into the transition, which is far short of the financing needed to help put the world on course to meet our collective climate goals.
The report found that green projects currently suffer from underinvestment and high required return rates because private investors tend to see green technologies as riskier than alternative investments. The report highlights the need for governments, financial institutions, and investors to jointly develop mechanisms to help mitigate risk from green projects by developing blended, low-cost finance solutions to mobilize private investment and help achieve economic growth and climate neutrality—especially in emerging economies. It also highlights the benefits of taking action—the projected savings of US$50 trillion through 2050 could reduce the annual investment needed by over 25%. The report goes beyond finance to provide a holistic overview, employing analysis and modeling to consider the technology landscape, policy environment, and a matrixed vision of financing challenges.
“Just as we are continually developing solutions and technology to rapidly decarbonize, we must take definitive steps to remove financial barriers in order to accelerate a just energy transition, especially in developing economies,” says Jennifer Steinmann, Deloitte Global Sustainability and Climate practice leader. “Decisive and coordinated policy support and hand-in-hand action across the global finance ecosystem are critical to guiding investments toward green projects and supporting the growth of sustainable economies.” To win the race to net-zero, the world must invest wisely and identify areas for cost reduction. For instance, less than half of green investments are currently made in developing economies mostly due to greater risks and stricter public budget constraints for energy transition projects. However, to reach net-zero, nearly three-quarters of green investments (70%) would need to be made in developing economies by 2030 as these nations look to new, sustainable infrastructures and technologies.
“To further lighten the financial burden on the Global South, governments, financial institutions and international organizations must implement concessional finance—a loan made on more favorable terms than the borrower could obtain in the market—through innovative financing structures that mobilize private capital for climate action,” says Hans-Juergen Walter, Global Financial Services Industry Sustainability and Climate leader. “Major financial institutions, such as development banks and multilateral funds, play a pivotal role in this context.”
To learn more about Deloitte’s 2023 Financing the Green Energy Transition report, visit: https://www.deloitte.com/global/en/issues/climate/financing-the-green-energy-transition.html
– Ends –
© 2023 Deloitte & Touche (M.E.). All rights reserved.
In this press release references to “Deloitte” are references to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”) a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see deloitte.com/about for a detailed description of the legal structure of DTTL and its member firms. The information contained in this press release is correct at the time of going to press.
About Deloitte & Touche (M.E.) LLP:
Deloitte & Touche (M.E.) LLP (“DME”) is the affiliate for the territories of the Middle East and Cyprus of Deloitte NSE LLP (“NSE”), a UK limited liability partnership and member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”).
DME is a leading professional services firm established in the Middle East region with uninterrupted presence since 1926. DME’s presence in the Middle East region is established through its affiliated independent legal entities, which are licensed to operate and to provide services under the applicable laws and regulations of the relevant country. DME’s affiliates and related entities cannot oblige each other and/or DME, and when providing services, each affiliate and related entity engages directly and independently with its own clients and shall only be liable for its own acts or omissions and not those of any other affiliate.
DME provides audit and assurance, consulting, financial advisory, risk advisory and tax, services through 29 offices in 15 countries with more than 5,900 partners, directors and staff.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL, NSE and DME do not provide services to clients. Please see www.deloitte.com/about to learn more.
Deloitte provides industry-leading audit and assurance, tax and legal, consulting, financial advisory, and risk advisory services to nearly 90% of the Fortune Global 500® and thousands of private companies. Our professionals deliver measurable and lasting results that help reinforce public trust in capital markets, enable clients to transform and thrive, and lead the way toward a stronger economy, a more equitable society and a sustainable world. Building on its 175-plus year history, Deloitte spans more than 150 countries and territories. Learn how Deloitte’s approximately 415,000 people worldwide make an impact that matters at www.deloitte.com.
The information contained in this press release is correct at the time of going to press.
External Communications |PR and Media Lead
Deloitte & Touche (M.E.)
firstname.lastname@example.org | www.deloitte.com