Mahmoud Mohieldin, UN Climate Change High Level Champion for Egypt and UN Special Envoy on Financing 2030 Sustainable Development Agenda, said that initiatives of just energy transition focused on by COP27 in Sharm El Sheikh, as well as some recent reports, proved the need to mobilize more funding and investments to achieve this transition in a just and organized way.
This came during his participation in Singapore – International Renewable Energy Agency High Level Forum, with the participation of Tan See Leng, Minister of Manpower and Second Minister of Trade and Industry of the Republic of Singapore, Francesco La Camera, Director General of the International Renewable Energy Agency (IRENA), and Christoph Inglin, Vice Chairman of Sustainable Energy Association of Singapore.
Mohieldin stated that climate finance is development finance, explaining that financing the transition in the energy sector with the aim of reducing emissions and investing in renewables is financing for the seventh goal of the SDGs related to the transition to clean energy and providing energy to all people.
Mohieldin emphasized that mobilizing finance is vital to bringing climate action and other SDGs back on track, and to achieve the goals of the Paris Agreement and the 2030 Sustainable Development Agenda.
Mohieldin explained that the “Breakthroughs Agenda” report for 2023, which was recently launched by the HLCs in cooperation with the IRENA and the IEA, demonstrated the need to mobilize finance from public and private resources as well as from MDBs and IFIs with the aim of reducing the cost of capital in developing countries and promoting green finance in these countries.
According to Mohieldin, the report also recommended the need for cooperation and knowledge sharing between various parties, and activating mechanisms to de-risk financing and investing in energy projects in developing countries.
Mohieldin noted the need for developed countries to fulfill their pledges to finance climate action as a whole in developing countries, saying that the delivery of the annual $100 billion to finance climate action in developing countries, if it is done, will not be enough given the need of developing countries for about $2.4 trillion a year to finance their climate action until 2030, but it will open the door to fulfill more pledges.
Mohieldin stressed the urgent need to double the rates of energy efficiency improvement by 2030, to switch to clean energy sources such as hydrogen and biofuels to generate electricity instead of using fossil fuels, and to work on reducing methane emissions.
The climate champion said that it is important to put in place clear mechanisms to implement JET initiatives and projects, including phasing out fossil fuel, investing in renewables, and taking into account the socioeconomic impacts of the transition, explaining that this process requires scaling partnerships with private sector, reducing the cost of capital and de-risking finance especially in developing countries by activating credit guarantee and credit enhancement mechanisms.
He pointed out the important role of IFIs and MDBs in financing JET in developing countries through adopting new concessional finance policies that include low interest rates and long-term grace and repayment periods, and contributing to de-risking finance and thus incentivize private sector to participate.
Mohieldin explained that HLCs are working with different actors including private sector, philanthropies and MDBs with the aim of increasing investment in renewable energy by about threefold, doubling energy efficiency improvements, and increasing the share of electricity in energy consumption from 20% to 30% by 2030 while reducing the use of coal and fossil fuels.