Renewables are not just gathering political momentum, but the financial sector too is ready to make the shift in allocations, Dr. Gauri Singh, Deputy Director General of the Dubai headquartered International Renewable Energy Agency (IRENA). 

In an interview with Zawya Projects on the sidelines of the Singapore International Energy Week (SIEW) conference [Read Part 1 of the interview here], Singh pointed out that 100 substantial banks’ boards have decided to get out of fossil fuel assets clearly signaling a shift, which is expected to support investments required for energy transition. 

The IRENA Deputy DG said that apart from the $98 trillion required between now and 2050 to execute the pledges announced by governments, an additional $33 trillion would be required to reach 1.5 degrees, which translates to nearly $4.4 trillion in annual investments from now, a high target but achievable when seen in the context of $200 trillion of annual global capital flow. 

“[Currently], almost 85-86 percent of renewable energy investments are from the private sector and nearly half of this is from equity and about 22-23 percent is from commercial financial institutions. A critical 14 percent comes from the public sector – from governments, development banks, and that is important because it serves to draw in private investment into the country,” she said.  

Singh also underlined the funding disparity, with developing countries receiving only 15 percent of the renewable energy investments between 2013 and 2018. 

“That has to change,” she said. On the other hand, she noted, with renewables becoming not just the cheapest but the most reliable power resource last year, there was a 50 percent increase in renewables capacity installed in 2020 compared to 2019, while 260 gigawatts of renewable energy were operationalised, which was another record. 

(Reporting by Sowmya Sunder; Editing by Anoop Menon) 

(anoop.menon@refinitiv.com) 

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