According to the Intergovernmental Panel on Climate Change (IPCC), the energy sector is the largest contributor to global greenhouse gas emissions. Accelerating the deployment of renewables and decarbonizing the energy sector can lead to significant emissions reduction. However, to scale up deployment for expanding access, bolstering energy security, and keeping global temperature rise below 1.5 °C, as set out in the Paris Agreement, investments in renewables must triple to $ 1.3 trillion annually by 2030, according to the International Energy Agency (IEA). In addition, increasing the share of renewable energy sources in global electricity production is currently hindered by inadequate public funding and significant disparities among countries and regions. Therefore, mobilizing private investments in renewable energy is essential for achieving energy transition and meeting global climate objectives.
Approach
ESMAP, which focuses on achieving decarbonization across the energy sector in support of international commitments on climate change, manages several renewable energy initiatives, including SRMI. SRMI aims to support governments in developing and implementing sustainable renewable energy programs by creating an enabling environment for privately led renewable energy projects. By combining technical assistance, public investments, and risk mitigation instruments, SRMI provides a comprehensive framework, which includes a series of important steps to mitigate the critical risks perceived by the private sector while reducing the risks for the public sector.
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“Despite being 100% electrified, the Maldives still rely on imported fossil fuels with high and fluctuating power costs. These high fuel costs have often led to a massive drain of hard currency from the economy and made electricity unaffordable for households and businesses. Utilizing SRMI has helped our country engage a tremendous amount of much-needed private-sector investment in renewable projects. This has helped reduce the fiscal deficit burden on the government and consumers, set us on a path to energy security, and supported our sustainable economic development goals.”
Ali Majid
Deputy Minister Ministry of Environment, Climate Change and Technology,
Government of Maldives
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