Asian Infrastructure Investment Bank (AIIB) and the International Renewable Energy Agency (IRENA) have signed a memorandum of understanding (MoU) committing to work together to support Asia’s energy transition and mobilise greater private capital for renewable energy. Under the terms of the AIIB-IRENA MoU, both the Bank and IRENA agreed to scale-up their efforts to unlock capital and accelerate the uptake of renewable energy by AIIB members. La Camera highlighted this agreement bolsters IRENA’s efforts to facilitate the flow of low-carbon capital into the energy transition where it is needed most, including through the Climate Investment Platform, a multi-stakeholder initiative designed to mobilise climate capital, of which IRENA is a founding member.
The energy transition is the centrepiece of global efforts to achieve sustainable development, address climate change, and accelerate a new age of inclusive, low-carbon growth. Asia is home to about 60% of the world’s population and contributes to almost 50% of global energy-related greenhouse gas (GHG) emissions. The region accounts for nearly half of global renewable-energy capacity, according to IRENA, up from less than one-third a decade ago. However, relative to its size, Asia still lags, with renewables accounting for less than 15% of total primary energy consumption in 2020. Furthermore, developing countries in Asia are expected to account for about two-thirds of global energy growth by 2040. With its vast wealth of affordable and sustainable energy resources, such as hydropower, wind, and solar, it is essential that this growth is met by renewable energy capacity. The Bank is partnering with IRENA to support AIIB’s green mandate and help the Bank achieve its ambitious climate finance targets. AIIB is already playing an important role in increasing private sector investment in the renewable energy sector. Over the last five years, AIIB has invested in 12 renewable energy projects, amounting to US$1.25 billion in Egypt, India, Kazakhstan, Maldives, Oman, Pakistan, Tajikistan, Turkey, and Nepal.