Renewables Obtain Share of $500 Million in Funding

Renewable energy installations are among 16 projects to be funded by more than half a billion dollars.

WASHINGTON, DC, US, 2001-05-16 <> The Global Environment Facility has approved a program of work that will provide $150.5 million for 16 projects. An additional $385 million in funding will come from other bodies, boosting the total value of the program to $535.5 million. The largest single project is a partnership between GEF and China in the production and use of renewable energy. The GEF Council voted $41.5 million for the first phase of ‘China: Renewable Energy Scale-up Program’ which will be developed through the World Bank to “significantly” increase the use of renewable energy in that country. This is the first time that China formally addresses the issue of greenhouse gas emissions and climate change through a new energy plan that includes projects such as CRESP. CRESP is designed to reduce barriers to the introduction of cost- effective renewable energy sources, and is expected to reduce the cost and improve the performance of small hydro, wind and biomass, while increasing market penetration of renewables. By 2010, it should increase the electricity produced from renewable sources by 1.7 GW of installed capacity, the equivalent output of two large nuclear reactors. Projects will be installed in regions with good renewable energy potential and isolated rural areas which now are not adequately served with grid power. CRESP will also support the implementation of a national policy framework that will legally require a share of the electricity supply to be met from renewable sources, and it will support improvements to the quality and performance of renewable energy equipment and strengthen the capability of renewable energy service industries in China to enabling them to respond to sharply increased market demand. “Given the many barriers to be overcome, a key to success in this venture is partnership,” explains GEF chairman and CEO Mohamed El-Ashry. “The development of CRESP was coordinated with the proposal for support by GEF and the Asian Development Bank to wind energy development in China. What happens in the energy field in China is important to the global community, so a coordinated global response is appropriate.” CRESP participation is open to any multilateral or bilateral organization or foundation, and will build on an existing partnership between GEF and China through the GEF/World Bank Renewable Energy Development Project and the GEF/UNDP Rapid Commercialization for Development of Renewable Energy Project. Other approved projects include promotion of renewable energy in Cambodia (total project cost $16.6 million) and renewable energy in Namibia (total cost $7.4 million). Other project involve conservation in India, fuel cells in China and India, energy efficiency in Croatia, and district heating in Lithuania. “Given the demand for GEF support, the work program could have been significantly larger than the $535.5 million in approved projects,” adds El-Ashry. The work program demonstrates a trend towards more strategic partnerships and a program approach that goes beyond stand-alone projects. CRESP is part of a broader Government of China initiative on renewable energy and responds to China’s energy sector and environmental objectives as outlined in its tenth Five-Year Plan. The majority of facilities developed as a result of the “mandated market share” for renewables will be supplied through commercial channels. Since GEF was established a decade ago, it has granted $3.3 billion, with co-financing pushing the total funding to $11.5 billion for 800 projects in 150 developing nations. GEF has 167 member countries and its projects are managed by the U.N. Development Programme, U.N. Environment Programme, World Bank, U.N. Food & Agriculture Organization, U.N. Industrial Development Organization, International Fund for Agricultural Development, African Development Bank, Asian Development Bank, European Bank for Reconstruction & Development, and Inter-American Development Bank.

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