Ikea and the Rockefeller Foundation promote $ 10 billion in clean energy

Ikea and the Rockefeller Foundation are making the biggest investment ever to launch a fund that they hope will fund more than $ 10 billion in small-scale renewable energy to try to lift more than $ 1 billion from energy poverty.

Each foundation will provide $ 500 million in risk and expect to attract additional $ 10 billion this year from international development agencies with a view to expanding investment in renewables in countries like India, Nigeria and Ethiopia before opening up to institutional investment.

“This can be commercially viable. There are $ 1 billion in advance to take the risk, which could unlock $ 10 billion. We’re not playing that here. We’ve seen it work in India. We know what it takes to succeed ” Rajiv Shah, President of the Rockefeller Foundation, told the Financial Times.

Per Heggenes, CEO of the Ikea Foundation, said it offers a “very significant” opportunity to address two major threats in developing countries: poverty and climate change.

Investing in renewable energy has become big business in Europe and the US, but the Ikea-Rockefeller platform wants to do something similar with smaller-scale projects in emerging markets. The aim is to develop distributed renewable energy projects “rather than centralized power plants”, mainly through mini-solar projects, but also through micro-energy plants.

The foundations have said they have already signed with the International Finance Corporation, the World Bank-linked organization and the US International Development Finance Corporation, and expressed hope that Ikea’s participation will unlock support from similar European agencies.

The goal by the end of this year is to have a $ 10 billion fund for development agencies to go along with the initial $ 1 billion and then encourage commercial investors to individual projects.

Shah said he believes the platform could eventually grow to $ 100,000 million or $ 1 billion using his “philanthropic capital as leverage to get commercial capital.”

He said he has seen “a lot of commitment and a lot of good intentions but a lot of execution but since his days as Obama’s administration official” that he has been holding conferences on climate change in Copenhagen and Paris.

“This has the potential to be the most significant investment, the most funded, which is focused on the dual goals of lifting people out of poverty, but in a climate-friendly way.”

Heggenes said it’s because of the Ikea Foundation take that support and invest in projects to address inequality – He saw energy poverty as the biggest obstacle to growth in the poorest countries.

The two foundations have aimed to reduce billions of tonnes of CO2 emissions and lift billions of people out of energy poverty by the end of the decade.

Shahr said the pandemic delayed development in the poorest countries for up to two decades, and there was a great need to encourage economic growth in those countries while respecting the environment. “Now is the time to act,” he said.