The World Economic Forum (WEF)has launched its Playbook of Solutions, an innovative digital platform that outlines 100 policy measures, financial mechanisms, and de-risking strategies from the past two decades. These initiatives have effectively mobilized capital for clean energy investments in 47 emerging and developing economies.
Investment requirements for clean energy transition
To accelerate the clean energy transition and achieve a threefold increase in renewable energy by 2030, significant scaling of investments is essential. This entails increasing annual investments in renewable energy five to seven times, reaching at least $1.7 trillion by 2030. Emerging markets and developing economies (EMDEs) are projected to account for 90 percent of the increase in global energy demand by 2035, while also hosting a substantial portion of the world’s population. However, they currently receive less than 20 percent of global clean energy investments, primarily due to risk profiles and regulatory frameworks that may deter many investors.
Challenging misconceptions
Samaila Zubairu, president and CEO of the Africa Finance Corporation (AFC) and co-chair of the Network, noted that the Playbook aims to challenge misconceptions about the developing world and to show that innovative solutions specifically designed for emerging markets and developing economies (EMDEs) are already available. He emphasized that strategic collaborations led by reputable institutions like the AFC are essential for closing the clean energy investment gap in the Global South. According to him, such partnerships will support a global shift toward clean energy, bolster economic resilience, and meet the pressing energy demands of emerging markets.
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Success stories and integrated approaches
In addition to outlining 100 solutions from 47 countries and emphasizing that success typically arises from a combination of strategies, the WEF digital platform also presents four integrated national approaches with in-depth analyses of successful initiatives in Brazil, Chile, Egypt, and India. These case studies illustrate how these nations have mobilized billions for clean energy projects through a comprehensive mix of strategies, including innovative policy measures and financial platforms. Key elements include government commitments supported by stable and attractive policies, such as tax incentives and competitive auctions; guarantees and currency hedging to mitigate investment risks; and innovative structures like debt swaps to enhance financing.
Guidance for stakeholders
The Playbook of Solutions is designed to assist governments, development finance institutions, and private sector players in energy and finance as they navigate project financing for energy transitions in emerging markets. It underscores that a combination of policy initiatives, de-risking tools, and creative financing mechanisms is essential to unlocking the $1.7 trillion needed in the Global South, emphasizing that collaborative efforts are vital for success.
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