The UK’s International Development Secretary Andrew Mitchell announced a major private investment drive to help tackle climate change at the World Economic Forum in Davos last week.
Developing nations suffer from a chronic lack of clean, reliable energy infrastructure, which is holding back economic growth.
To address that issue, the government plans to back two new commercial investment funds with an initial equity investment of £110 million, along with £30 million for a technical support facility.
The investment is part of the UK’s commitment to contribute to the $100 billion fast-start climate change fund agreed at the Copenhagen summit in 2009.
The Climate Public Private Partnership is expected to attract at least £30 of additional private investment for every £1 of public money to support the development of clean, renewable and efficient energy, advanced technologies and the protection of natural resources in developing countries.
The investment funds, which will be run on a strictly commercial basis by professional fund managers, are expected to support the development of up to 7 GW of new solar, wind and hydroelectric capacity, avoiding the emission of at least 265 million tonnes of CO2 of the lifetime of the projects.
“For too long the power of the private sector has been forgotten in the fight against global challenges,” Mitchell said. “We need to engage and harness the power of the private investors.”
Mitchell added that it is in Britain’s economic interest to open up new markets for British goods in the fastest growing economies.
“Developing countries do not need to sacrifice economic growth in the interests of going green. We will support investments that deliver green growth for those who need it,” he added.
The scheme has been developed in collaboration with the International Finance Corporation and the Asian Development Bank.
For further information:
EU proposes shipping and aviation pay for $100 billion climate fund (20-May 2011)
Finding $100 billion a year for climate action in developing world feasible, says EC (11-Apr 2011)
COP15: Climate change talks end in Brokenhagen (22-Dec 2009)
COP15: US and Japan pledge donations to developing world fund (15-Dec 2009)
31 January 2012