Fund to provide up to US$ 110 million for investments in green energy
The Green Climate Fund (GCF) has approved an allocation of up to US$ 110 million to the EBRD’s Kazakhstan Renewables Framework, an innovative plan to finance the construction and operation of renewable energy projects in the Central Asian country.
The framework was approved by the EBRD Board of Directors in December 2016 for a total volume of € 200 million. It will support investments in solar, wind, small hydropower and biogas energy sources and the modernisation and strengthening of the electricity grid in order to enhance the integration of renewable energy sources.
The GCF contribution comprises US$ 106 million in concessional finance and US$ 4 million in technical assistance grants. It was approved during the current meeting of the GCF Board in Cairo. The Fund’s governing body has 24 members from developed and developing countries and is the highest decision-making authority.
Kanat Bozumbayev, Minister of Energy of the Republic of Kazakhstan said: “Kazakhstan has recognised the need for transition to a green economy. We are contributing to global efforts under the Paris Agreement to address climate change. The country has set an ambitious Nationally Determined Contribution, under the agreement, with an emissions reduction target of 15 per cent below 1990 levels by 2030. With the support of the GCF and the EBRD we look forward to scaling up investments in renewable energy and delivering on the country’s green economy transition strategy.”
Aida Sitdikova, EBRD Director, Energy and Natural Resources Russia, Central Asia and Caucasus, said: “The framework builds on eight years of policy and investment work in Kazakhstan. lt makes a profound contribution to the scaling up of renewable energy in the country, combined with a strong focus on gender and inclusion and a drive to lay the regulatory foundations for a sustainable renewable energy market in the country. “
The Fund was established in 2010 by the 194 countries who are parties to the United Nations Framework Convention on Climate Change (UNFCCC) as part of the convention’s financial mechanism. It aims to deliver equal amounts of funding to mitigation and adaptation, while being guided by the convention’s principles and provisions.
The EBRD as a leading multilateral development bank in the field of green investments and the GCF signed an agreement on cooperation in April 2017 that underscores the EBRD’s position as the largest single recipient of GCF resources and paves the way for more joint projects aimed at combating climate change in the Bank’s regions.
Under its Green Energy Transition (GET) approach launched in 2015 the EBRD seeks to increase the volume of green financing from an average of 24 per cent of its Annual Business Investment in the 10 years up to 2016 to 40 per cent by 2020. As early as September 2015 the EBRD’s engagement in sustainable energy passed a milestone when for the first time the Bank’s investments in renewables overtook those for thermal power generation.
Kazakhstan is rich in natural resources, but remains heavily dependent on fossil fuels for power generation. Coal-fired plants account for 72 per cent of total power generation, despite the country’s vast potential for renewables. To reach its goals for the reduction of greenhouse gas emissions and reduce the burden on the environment the country needs to invest in green technology. The EBRD has supported these efforts with, among others, investments in the Burnoye solar park.
To date, the Bank has invested €7.3 billion in Kazakhstan, of which €1.7 billion is invested in sustainable energy and resources. In 2016 Kazakhstan became the EBRD’s second-largest country of operations by volume. Investment is expected to continue at a high level in 2017.