IRENA and OPEC to Promote Environmentally Responsible Financing in Emerging Countries

Published on: 25 June 2022
by KnowESG
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The International Renewable Energy Agency (IRENA) and the OPEC Fund for International Development have signed a Memorandum of Understanding (MoU) to mobilise funds, unlock investment, and provide on-the-ground project development support for the energy transition.

The alliance was announced to improve access to sustainable finance in emerging and developing economies.

The Memorandum of Understanding (MoU) was signed by IRENA's Director-General Francesco La Camera and Dr Abdulhamid Alkhalifa, Director-General of the OPEC Fund, formalising the relationship.

IRENA and OPEC will collaborate to give technical assistance and capacity-building to project developers, resulting in a pipeline of bankable projects ready for financing.

They will also seek new investors and explore collaboration opportunities through the IRENA-managed Energy Transition Accelerator Financing (ETAF) Platform, the Climate Investment Platform (CIP), and OPEC Fund initiatives such as the planned Energy Access and Transition Trust Fund.

La Camera commented on the partnership, “The global energy transition must dramatically accelerate. To achieve net-zero and universal energy access, our World Energy Transitions Outlook shows that we must nearly treble the speed of deployment of renewables and massively redirect investment towards transition.

“Our cooperation with the OPEC Fund will help unlock much-needed capital in developing countries to bring economic growth, sustainable prosperity, and jobs to people through renewable energy projects on the ground.”

Alkhalifa added to this, stating the necessity of an inclusive and just transition: “Our cooperation with IRENA will help to provide the necessary funds and facilitate access to innovative financing solutions, knowledge and technologies, as well as technical assistance for project development and capacity building to support the energy transition in our partner countries, particularly in Africa.”

Both parties agreed to work together in the future to ensure a just, inclusive, and equitable energy transition by the 2030 Agenda for Sustainable Development and the Paris Agreement.

Following the publication of IRENA's World Energy Outlook 2022, recognition of the significance of bringing the energy transition to emerging countries and economies is becoming increasingly prominent.

Furthermore, the two major players have stated that they intend to work closely together at the United Nations Climate Conferences, COP27 in Egypt in November 2022 and COP28 in the United Arab Emirates in November 2023.

Neither IRENA nor OPEC have mentioned which nations will benefit from their relationship.

Source: Smart Energy International

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