Abu Dhabi, United Arab Emirates, 15 May 2023 – The International Renewable Energy Agency (IRENA), in collaboration with the Indian Presidency of the G20, today presented a comprehensive report on the role of low-cost financing in accelerating the energy transition . The report, titled “Financing for Low-Cost Energy Transition”, was developed in close collaboration with the Ministry of New and Renewable Energy (MNRE) of India and offers a toolbox to increase the availability of low-cost capital in countries of the G20 and beyond.
The “Low-Cost Energy Transition Financing” report released by IRENA presents an innovative and comprehensive approach to boosting the energy transition. Recognizing the need for significant investments to achieve climate goals, the report highlights the importance of access to affordable finance. Drawing on lessons learned in renewable technologies like solar and wind power, the report proposes frameworks that lower transaction costs and facilitate foreign direct investment in critical technologies. By providing a toolbox to increase the availability of low-cost capital, the report plays a key role in enabling G20 countries and beyond to accelerate the energy transition in an efficient and sustainable way.
In his statement at the launch of the report, the Director General of IRENA, Mr. Francesco La Camera, emphasized the urgent need for access to low-cost finance for the rapid global expansion of renewable energy. He expressed pride in contributing to the work of the G20 and providing valuable input that supports the Indian Presidency in facilitating access to affordable finance in both developing and advanced economies.
According to the preview of IRENA's Global Energy Transitions Outlook Report, it is necessary to increase the share of renewable energy in the primary energy mix to around three-quarters in order to reach the climate target of 1.5 °C (Agreement from Paris).
In this context, the report highlights that country risk or political risk is often identified as the main obstacle to international institutional capital flows. Building on lessons learned from the significant cost reductions seen in solar and wind technologies in recent years, the report presents frameworks that can reduce the transaction costs of technology transfers and facilitate foreign direct investment in the technologies critical to the next phase of the transition. energy, such as hydrogen, wind energy offshore and storage in accumulators.
These innovation frameworks can drive improvements in enabling technologies, business models, market design and system operation, considering factors such as technological maturity, innovation, systems integration, increasing manufacturing capacity and reducing labor costs. In addition, low-cost financing is one of the top six priority areas set by the Indian Presidency of the G20.
