CETP members came together to underline the central role of public finance to accelerate the global energy transition at a packed event during the World Leaders Climate Action Summit at COP29 in Baku.
The event, available to watch here, celebrated the publication of the CETP’s Clean Energy Action Plan, which outlines bold steps for members and the Secretariat to take forward to enhance the quantity and quality of international public finance for clean energy into emerging markets and developing economies (EMDEs).
The overwhelming message was one of collaboration across the public and private finance sphere to mobilise the capital and investment needed for the energy transition:
“Collaboration and partnership is absolutely key here. That is true across countries, and you see that in the CETP, and it’s true across players to combine the work of DFIs, public capital and private capital together” – Diana Layfield, Chair of British International Investment
Key Highlights from the Event
Progress is being made Celebrating the success of the CETP to date was a highlight of the Public Finance in Action event, with Berthold Goeke, Germany, celebrating that we must:
Start by underlining the success story we initiated with signing the [CETP] statement three years ago at Glasgow. Implementing the statement shifted the standards of many working in governments… One can see the result of our joint efforts, for example in the recently published data of E3F and in 2022 and 2023, finance for fossil fuels across the group has dropped, while the volume of climate positive transactions have been increasing” – Berthold Goeke, Director General for Climate Action, Federal Ministry for Economic Affairs and Climate Action, Germany
Furthermore, both Norway and Australia, new CETP members since COP28, are on track to deliver on their CETP commitment and implement an aligned policy by the 5 December deadline. Reflecting on how Australia will be taking forward the CETP through Australia’s hopeful COP31 Presidency and their policy to end new direct public support for the international unabated fossil fuel energy sector, Kristen Tilley, Ambassador for Climate Change in Australia said that:
“I’m really pleased that last year we were able to sign onto the CETP, and much like Norway, we’re in the very final stages of implementation development… So the CETP initiative, clean energy transition globally and the financing that supports or hinders that, would I expect be very much a relevant and complementary thing to focus on [at COP31]” – Kristen Tilley, Ambassador for Climate Change in Australia
Global Collaboration for Clean Energy Rachel Kyte emphasised the challenges ahead and how political leadership, including through flagship initiatives like the CETP and the Global Clean Power Alliance, is key to bringing countries and finance institutions together to unblock finance chains in EMDEs. She highlighted how countries are taking steps forward to accelerate the transition, including the strengthening of the UK’s NDC which commits to a 81% reduction in its emissions by 2035.
“The heart of this is collaboration to use public finance effectively; to steward it so it can produce results, so that solidarity between people is strengthened and we can leverage private sector finance” – Rachel Kyte, UK Representative for Climate Change
The Financing Gap is Stark Cecilia Tam (IEA) and panellists shared the confronting reality that clean energy investment flows are not distributed equally and highlighted how this is a fundamental challenge to transitioning the global energy system. High costs of capital in developing countries is exacerbating the divide, so increased public funding for grid investment is essential, concessional funding for clean cooking need to be deployed in the most vulnerable regions, and lending solutions for financing energy efficiency and renewable deployments must crowd in domestic capital and expertise.
“Only $280bn of the $3bn clean energy investment flows to EMDEs (excluding China), despite this part of the world accounting for 2/3rds of the global population” – Cecilia Tam, Head of Energy Investment Unit, IEA
Competition for Public Funds Panellists discussed the significant challenges to decide how limited public finance should be used. Both the EIB and Germany celebrated the value of the CETP Action Plan objectives and the MDB fund to direct public finance funds efficiently and effectively into EMDEs, in order to bolster clean energy deployment. As Hans Olav Ibrekk, Special Envoy for Climate in Norway said:
“There is huge competition for public funding, and we have to use public funds as efficiently as possible. The issue in many of these discussions is domestic resource mobilisation, in developed as well as developing countries, and we tend to forget that someone has to pay for this investment. Let’s face it, it’s us in this room. We have to get the tariffs right; we need to improve our taxation system and carbon pricing” – Hans Olav Ibrekk, Special Envoy for Climate and Security, Norwegian Ministry of Foreign Affairs
Solutions Exist What was overwhelming clear, was the consensus and support behind the CETP’s Action Plan. CETP members and the Secretariat are setting transparent and tangible deliverables in a time-bound manner that will support the delivery of the COP28 global energy transition goals and scaling up investment in emerging markets and developing economies. The CETP includes MDB members and Stephen O’Driscoll, from the European Investment Bank, highlighted the next steps MDBs are making through the CETP Action Plan and COP29 MDB joint statement to green financial systems:
“We’re all chasing the same goal. The MDBs working together as a system – bigger, bolder, better – the joint statement yesterday is about how we’re going to do that with some very significant climate finance goals out to 2030… and we’d like to make sure that the volumes we do provide have the right level of impact, so we issued a common approach paper” – Stephen O’Driscoll, Head of Environmental, Climate and Social Office, EIB
A Call to Action The event concluded with a call to action, urging stakeholders to collaborate and innovate to achieve the goals set out in the CETP Clean Energy Action Plan. As Edward Omoya from the East African Development Bank stated:
“Through collaboration, we can achieve the great points set out in the CETP’s Action Plan” – Edward Omoya, Environmental and Social Management Specialist and representative for the UNFCCC Steering Committee, East African Development Bank
The publication of the CETP Clean Energy Action Plan marks a significant step forward in the global effort to transition to clean energy. The essence of this effort is to use public finance effectively, steward it to produce results, strengthen global solidarity, and leverage private sector finance to pave the way for a sustainable future.
Event Participants
Speakers [In order of appearance]
- Rachel Kyte, Special Representative for Climate, United Kingdom
- Cecilia Tam, International Energy Agency
- Julia Beck, UK Export Finance
- Hans Olav Ibrekk, Government of Norway
- Edward Omoya, East African Development Bank
- Berthold Goeke, Government of Germany
- Stephen O’Driscoll, European Investment Bank
- Diana Layfield, British International Investment