COP26 a view from the sidelines
Juliet Davenport
NED and advisor in Energy Transition and Climate related businesses
Last week in Glasgow saw the finance ministers meet and Extinction Rebellion march. And despite the wide-ranging inhabitants of the city – Glasgow seemed to take it all in its stride.?A few gathered to watch the spectacle as XR took the streets, but in reality, there were more police than demonstrators in the centre of the city and although there were few, there was a refreshingly diverse set of demonstrators with countries from round the world.?Greta definitely brought out more!
The headline of last week for energy was the announcement of the phase out of coal.?Commitments from around the world including Poland and Vietnam, who have some of the highest levels of coal in their energy mix 75% and 50% respectively, mean that we could see the end of coal, or at least new investment in coal.?With renewables the cheapest form of energy now worldwide, this seems like a no brainer.?But the challenges of closing down existing plant might be more difficult.?For countries like Vietnam where the cost of bringing inward investment into the coal plants in the first place, was to write draconian PPA’s with the investors, new coal might be a thing of the past, but existing coal could be more difficult to shift, unless investors take a different view.
The debate around bringing investment into developing countries was the key topic of conversation for the finance ministers around the world.?Encouraging what it appears to be a huge bow wave of investment into developing countries is still high on the agenda, and something with the exception of South Africa, we are yet to solve.?I caught up with Marlene Marimbe from Shireoak International to talk about developing solar in Zimbabwe, and the challenges on currency risk and power contract risk.?These are still very real, and working out the role of World Bank, IMF and Western governments in supporting investments in these more difficult to reach economies has to be a priority for the new taskforce co-chaired by the UK and Fiji.
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The taskforce launched a partnership with five ‘pioneer countries’ – Bangladesh, Fiji, Jamaica, Rwanda and Uganda – to support them and their local communities to get the finance they need for their climate plans.?Lets hope the pioneering countries can move at pace and then role out new finance to wider developing countries like Zimbabwe, who have a dire need for infrastructure investment, and for that infrastructure investment to be green.
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Delivering energy infrastructure in UK and Southern Africa
3 年Too right Juliet. A lot of very large numbers have been thrown around these past couple of weeks by both public and private sectors. However, we are yet to see how the most vulnerable and usually the most high risk countries will be able to access these funds. As you mention, a country like Zimbabwe is not perceived as a conducive investment environment, yet it is one of the most vulnerable, needing these funds desperately to ensure adaptation and a transition to being a low carbon while allowing its economy to grow. A shift is required allowing institutions such as the The World Bank, African Development Bank Group and IFC - International Finance Corporation etc to play a critical role in supporting investments into such countries by establishing guarantee funds into which developers pay a subscription to protect their investments. These funds grow over time and are able to support increasing numbers of infrastructure projects.