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The World Economic Forum has launched a Playbook of Solutions. The novel digital platform breaks down 100 policy measures, finance mechanisms and de-risking solutions from the past two decades. The platform lists policies that have successfully helped unlock capital for clean energy investment in 47 emerging and developing economies.
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Accelerating the clean energy transition and tripling renewables by 2030 will require a vast scale-up of investment and finance. Building the global financial architecture needed to support these transformations is critical. The annual average investment in renewable energy will need to be multiplied by five to seven to reach at least $1.7 trillion by 2030.
Emerging markets and developing economies (EMDEs) are set to represent 90% of the growth in global energy demand by 2035. They will also host the lion’s share of the global population. Yet, they account for less than one-fifth of global clean energy investments. This is in part due to risk profiles and regulatory environments that may not align with the preferences of many investors.
“Public-private partnerships and international cooperation will be key to ensuring an equitable and sustainable clean energy future for emerging economies,” said Roberto Bocca, Head of the World Economic Forum’s Centre for Energy and Materials. “As the Playbook demonstrates, governments can create favourable investment conditions, multilateral development banks can bridge capital gaps and private investors can drive growth through innovative de-risking and financial strategies. All stakeholders have a critical role to play in applying this at scale.”
Approaches for energy transition project financing
Initially developed to help inform the 2024 G20 Energy Transition Working Group, the Playbook of Solutions aims to guide governments, development finance institutions and private sector energy and finance players as they approach energy transition project financing in emerging markets. Clean energy finance is one of three main themes for the 2024 G20 Energy Transition Working Group.
The Playbook of Solutions highlights that the combination of policy action, de-risking tools and innovative financing mechanisms is the key to unlocking the $1.7 trillion needed in the Global South. This clearly demonstrates that no single actor can accomplish this alone.
It is against this backdrop that the Network to Mobilize Investment for Clean Energy in the Global South – a Forum-led coalition of 47 governments and private sector industry leaders – has identified an actionable series of good practices to de-risk and increase finance for clean energy in the Global South. Each solution is illustrated by a real-life case study, selected for its replicability potential as well as its concrete impact on unlocking clean energy finance in an EMDE context.
“The Playbook aims to debunk some of the myths surrounding the developing world and demonstrate that innovative solutions for EMDEs by EMDEs already exist,” said Samaila Zubairu, President & CEO of the Africa Finance Corporation (AFC), and Co-chair of the Network. “Strategic partnerships led by reputable institutions like the AFC are essential to bridge the clean energy investment gap in the Global South. This is so because they will accelerate the global shift to clean energy, strengthen economic resilience, and meet the urgent energy needs of emerging markets.”
On top of detailing 100 solutions from 47 countries – and acknowledging that success often stems from a combination of strategies – the Playbook also highlights four integrated national approaches with a detailed analysis of Brazil, Chile, Egypt and India’s success stories. These analyses demonstrate how countries have raised billions in clean energy capital. Most importantly, by deploying a comprehensive blend of strategies, including innovative policy measures and finance platforms. These include government commitments backed by attractive and stable policies, such as tax benefits and auctions. Others are guarantees and currency hedging to alleviate investment risks; and innovative structures, such as debt swaps, to scale finance.
“Country-led commitment reforms and platforms are critical to align sustainable development efforts in a way that prioritizes national objectives and accelerates progress towards a just, green transition,” said Rania A. Al-Mashat, Minister of Planning, Economic Development and International Cooperation of Egypt and Co-Chair of the Network “The Network serves as an important South-South cooperation platform, whereas the Playbook provides an effective way to exchange best practices and lessons learned between peer countries, thus unlocking just financing solutions that accelerate progress towards a just energy transition.”
