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AfrElec INVESTMENT AfrElec

IRENA calls for $2 trillion of

annual green investment

GLOBAL THE International Renewable Energy Agency resilient energy sources throughout the current
(IRENA) has called on governments and corpo- crisis,” said Francesco La Camera, director-gen-
rations to double spending on energy transition eral of IRENA.
projects to $2 trillion per year over the next three “This evidence should allow governments to
years in a bid to drive decarbonisation and the take immediate investment decisions and policy
wider energy transition. responses to overcome the crisis,” he added.
The agency said this week that post- La Camera added that these investment levels
COVID-19, governments could harmonise were needed to achieve the 100% decarbonisa-
immediate economic stimulus needs with tion of the world’s energy systems by 2050.
medium to long-term sustainable development In terms of technology, the IRENA report
by pursuing green policies. highlighted renewable power generation as the
These include reforming fossil fuel prices, key to decarbonisation, alongside battery stor-
retiring fossil fuel assets, driving green financing age, improved energy efficiency, electric vehi-
and bailouts, and strategically investing in the cles (EVs), smart grids and new fuels such as
energy transition. hydrogen.
The report finds annual investment of $2 tril- The report views that “recovery plans rooted
lion and effective policies will leverage further in the energy transition represent a far-sighted
private sector investments by a factor of 3-4, investment” that will improve the resilience of
thereby scaling up combined private and public the world’s energy systems and economies as a
investment to an average of $4.5 trillion per year whole.
over the next decade. The report stressed that green investment
This would boost the world economy by can benefit both developed and developing
an additional 1.3%, creating 19mn additional economies.
energy transition-related jobs by 2030. In Africa and Asia, the coronavirus (COVID-
In the first three years to 2024, the annual $2 19) crisis has exposed massive gaps in energy
trillion invested would boost GDP by 1% and access, which in turn affect healthcare, water
create additional 5.5mn transition-related jobs. supply, information and communication tech-
By comparison, in 2019 renewables and other nologies and other vital services in regions of the
transition-related technologies attracted invest- world where they are most needed.
ments worth $824bn. IRENA said that institutional investment and
Crucially, every million dollars invested in green bonds will be vital, along with dedicated
renewables would create three times more jobs credit, investment and funding programmes.
than in fossil fuels. Since the pandemic appeared, investor inter-
That this capital spending would mean est in sustainable assets has sharpened. Insti-
that it would be possible to link the short-term tutional investors may opt to focus more on
recovery to medium and long-term strategies is renewables in the recovery and beyond.
paramount to achieving the Sustainable Devel- By aligning their investment portfolios to a
opment Goals (SDGs) and the Paris Agreement climate-safe future, investors can also be better
on Climate Change. prepared to anticipate new regulatory demand
“Renewables have proven to be the most and evolving fiduciary standards.™

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