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In October 2013, together with the United Nations Development Programme (UNDP) we co-hosted a 4-day Hearing for Parliamentarians, focusing on the challenges and opportunities for financing renewable energy around the world. The Hearing brought together legislators from developing countries which all have vast renewable energy potential, and which are all severely threatened by climate change. The MPs were joined by experts on renewable energy technology, policy, and investment, for a productive discussion on how legislators can attract significant investment to renewable energy in their countries.
A full Summary Report, containing a detailed overview of the discussions and presentations, can be downloaded here.
The discussions explored four requirements:
Stop financing fossil fuels. The International Monetary Fund estimates that governments commit at least $1.9 trillion a year (around 8% of government expenditure) to prop up the fossil fuel industry. Who wants to invest in an enterprise when the competition is massively subsidised? We need to find better ways to support access to energy for the poorest citizens.
Share the risk. National governments and multilateral development agencies must address the technical, regulatory, financial and administrative barriers that currently impact the competitiveness of renewable energy investments in developing countries. These risks can be addressed through policies designed to dismantle the barriers; financial instruments through which investor risk is shared by public institutions such as development banks; or direct financial incentives.
Ensure grid connection. Investors in renewable electricity must be able to deliver their power to their market – whether it is through a village mini-grid, through the national grid, or through long-distance interconnectors to neighbouring countries.
Guarantee a good price. Investors cannot know if they will make a profit or loss unless they are working within stable, transparent pricing frameworks that allow them to estimate future income from their investments in renewables. Clear and well-designed regulatory regimes, consistent pricing policies, and tools such as feed-in tariffs can contribute to stable prices.
Keynote addresses were delivered by the Vice Speaker of the Moroccan Parliament, the Hon. Karim Ghellab, the UNDP's Deputy Resident Representative for Morocco, Ms Ayshanie Medagangoda-Labe, and the Indian State Minister for Finance, Mr J.D. Seelam. The Hearing also featured expert presentations from the International Monetary Fund, the World Bank, Swiss Development Cooperation, the Desertec University Network, the World Future Council, and Paradigm Change Capital Partners.
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