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LEADERSHIP SPEAK
Financing the frontier of energy storage Mafalda Duerte, CEO of Climate Investment Funds talks to Ashok Thakur, Chief Editor of ETN, about CIF’s financial support programs for energy storage projects in developing countries, future investment plans, and commitment to a climate-smart future through storage technologies. What is Climate Investment Funds? At the height of the global financial crisis in 2008, global leaders established the $8 billion Climate Investment Funds (CIF) to provide scaled-up financing for the demonstration, deployment, and transfer of low-carbon and resilient climate solutions with a significant potential for long-term transformational change. Twelve years on, CIF is a pioneer in global climate finance; mobilizing partners, opening markets, and catalyzing transformational change in more than 70 developing countries. We are proud to be the largest source of climate finance in developing countries. Our business model works through six multilateral development banks (The World Bank, International Finance Corporation and four regional MDBs Multilateral Development Banks) in a programmatic way across
more than 300 projects. CIF aims to test new business models, build track records in unproven markets, lay the foundation for evidencebased learning to enhance climate investments and boost investor confidence to unlock additional sources of finance. We have proven that these models work even in the most challenging economic environments, such as those found at CIF’s inception and today, in the wake of the global COVID-19 pandemic. CIF-backed investments are attracting $60 billion in expected co-financing and delivering impressive results on the ground. They are contributing to the generation of 25.3GW of new clean power capacity, improved energy access for 8.8 million people and over 300,000 businesses, greater climate resilience for 45.2 million people and the sustainable management of 30 million hectares of forests.
What is your financing strategy? CIF’s strategy has been to deploy flexible, predictable and programmatic concessional capital at scale, but targeted in ways that tackle market and institutional failures and other barriers to climate action. Our business model delivers this capital by bringing together our key financiers, the MDBs. By lowering investment costs and risks, and by providing a collaborative platform for strategic and operational coordination, we have enabled MDBs to address prevailing barriers to the commercialization of new technologies, engage private investors in first-of-their kind projects and contribute to transformational change. Further, by enabling recipient countries to draw on MDBs’ varied skill sets, CIF’s business model has demonstrated its relevance in helping to identify and address the root causes determining the need for concessional financing. So, you can see the potential for this business model to accelerate the deployment of energy storage in developing countries to ensure that clean and reliable energy are the solutions of choice for developing countries. Why is CIF investing in energy storage now? The world has ambitious targets on renewable energy to deliver if we are to achieve the goals set in the Paris Climate Agreement and the UN’s Sustainable Development Goals. By financing energy storage, the CIF is directly contributing to those targets by ensuring that renewable energy generated can be absorbed into the grid. The International Renewable Energy Agency (IRENA) estimates that we will need to invest $20 billion per year in batteries alone from now
Mafalda Duerte | September-October 2020
