Unlocking energy finance for high-impact areas

During the SEforAll forum on a session which  was moderated by Steve Kukoda, International Copper Alliance,who called finance the single largest barrier to deploying energy efficiency at the scale needed to achieve the Paris Agreement goals. The panelists were: Lily Riahi, UN Environment; ArielYepez, Inter-American Development Bank; Mark Lister, Head of the Copenhagen Centre on Energy Efficiency; and Amadou Thierno Diallo, Islamic Development Bank.Lamenting that the vast majority of developing countries lack efficiency standards for products, Kukoda opined that financial institutions should make such standards a prerequisite for receiving energy financing. He called for speaking the “right language” to the finance community, shifting the response to traditionally non-bankable projects from “no” to “not that way,”and getting creative to make them financeable.

Panelists described how two SEforALL initiatives, District Energy in Cities and the Copenhagen Centre on Energy Efficiency, are working to make projects bankable. The former is closing the gap in project identification and creating enabling policy environments, while the latter is working to scale projects to reduce transaction costs, such as by aggregating 40 Argentinian cities that want efficient LED street lighting.Representatives from development banks described efforts to finance energy efficiency projects, noting that even when money is available, it is often left on the table, sometimes due to risk perception by those who are eligible to adopt new technologies. They emphasized standardization through governance structures so that developing countries do not endup with rejected appliances that fail to meet other countries’standards.

Participants discussed resources for project preparation, ways to promote energy efficiency through the “sexier” lenses ofenergy access and clean energy, and the importance of national governments. One panelist noted that energy subsidies have negative impacts on efficiency, and that while many governmentssupport energy efficiency in theory, efforts to remove market distortions are often thwarted by political implications.