According to the Intergovernmental Panel on Climate Change (IPCC), the energy sector is the largest contributor to global greenhouse gas emissions. Accelerating the deployment of renewables and decarbonizing the energy sector can lead to significant emissions reduction. However, to scale up deployment for expanding access, bolstering energy security, and keeping global temperature rise below 1.5 °C, as set out in the Paris Agreement, investments in renewables must triple to $1.3 trillion annually by 2030, according to the International Energy Agency (IEA). In addition, increasing the share of renewable energy sources in global electricity production is currently hindered by inadequate public funding and significant disparities among countries and regions. Therefore, mobilizing private investments in renewable energy is essential for achieving energy transition and meeting global climate objectives.
ESMAP, which focuses on achieving decarbonization across the energy sector in support of international commitments on climate change, manages several renewable energy initiatives, including SRMI. SRMI aims to support governments in developing and implementing sustainable renewable energy programs by creating an enabling environment for privately led renewable energy projects. By combining technical assistance, public investments, and risk mitigation instruments, SRMI provides a comprehensive framework, which includes a series of important steps to mitigate the critical risks perceived by the private sector while reducing the risks for the public sector.
World Bank’s Climate Change Action Plan (CCAP) for 2021-2025 aims to integrate climate and development to maximize the climate impact of its projects. The Energy Sector Management Assistance Program’s (ESMAP) Sustainable Renewables Risk Mitigation Initiative (SRMI) uses climate finance for mitigation activities that reduce emissions and increase climate resilience in the energy sector. SRMI supports countries accelerate the deployment of renewables and decarbonize the power sector with (i) technical assistance and (ii) private investments and climate finance mobilization. SRMI has supported more than 60 countries, which led to enabling 4.4 gigawatts of new renewable energy projects in 14 countries and 2 regional projects, catalyzing over $5.5 billion in private capital, securing $4 billion in public infrastructure funding and guarantees, and mobilizing $1.2 billion in climate finance.
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