The Asian Infrastructure Investment Bank (AIIB) and the International Renewable Energy Agency (IRENA) have signed a Memorandum of Understanding (MOU) committing to work together to support energy transition and promote renewable energy.
The MOU was signed recently by AIIB President, Jin Liqun, and IRENA Director-General, Francesco La Camera, at a virtual ceremony to mark the new partnership.
Under the terms of the MOU, both AIIB and IRENA jointly decide to scale-up their efforts to unlock capital and accelerate the uptake of renewable energy by their members. La Camera highlighted that this Memorandum bolsters IRENA’s efforts to facilitate the flow of low-carbon capital into the energy transition where it is needed most, including through the Climate Investment Platform, a multi-stakeholder initiative designed to mobilise climate capital, of which IRENA is a founding member.
“The energy transition is the centrepiece of global efforts to achieve sustainable development, address climate change and accelerate a new age of inclusive, low-carbon growth,” said IRENA Director-General Francesco La Camera. “Through partnerships like this, we can catalyse the flow of capital towards renewables and energy transition related infrastructure in order to build a more resilient and sustainable energy system that delivers significant socioeconomic benefits to people and achieves global climate objectives.”
The Bank is partnering with IRENA to support AIIB’s mandate and help the Bank achieve its ambitious climate finance targets. AIIB is already playing an important role in increasing private sector investment in the renewable energy sector. Over the last five years, AIIB has invested in 12 renewable energy projects, amounting to $1.25 billion in Oman, Egypt, India, Kazakhstan, Maldives, Pakistan, Tajikistan, Turkey and Nepal.
Today, Asia is home to about 60 percent of the world’s population and contributes to almost 50 per cent of global energy-related greenhouse gas emissions. The region accounts for nearly half of global renewable-energy capacity, according to IRENA, up from less than one-third a decade ago. However, relative to its size, Asia still lags behind, with renewables accounting for less than 15 per cent of total primary energy consumption in 2020.
Furthermore, developing countries in Asia are expected to account for about two-thirds of global energy growth by 2040. With its vast wealth of affordable and sustainable energy resources, such as hydropower, wind and solar, it is essential that this growth is met by renewable energy capacity.
Under its Corporate Strategy, AIIB aims at reaching or surpassing by 2025 a 50 percent share of climate finance in its actual financing approvals, reflecting its commitment to support the Paris Agreement. Its Sustainable Energy for Asia Strategy (2017) also sets out a clear framework for how the Bank will invest in energy projects that increase access to clean, safe, affordable and reliable energy for millions of people across Asia.
The Climate Investment Platform (CIP) was launched at the United Nations Secretary General’s Climate Action Summit in 2019, as an inclusive partnership to scale-up climate action and translate ambitious national climate targets into concrete investments on the ground. The founding partners include IRENA, SEforALL and the United Nations Development Programme in coordination with the Green Climate Fund.
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