Energy investment package for emerging and developing countries

The Federal Ministry for Economic Affairs and Climate Action (BMWK) will provide an additional EUR 126 million for decarbonisation in emerging and developing countries through the International Climate Initiative (IKI). The countries are to receive support in phasing out fossil fuels and the dependence on imported energy with rising world market prices. At the same time, the subsidies make an important contribution to achieving the Paris Agreement 1.5 degree target and underline the ambitions of the German government with its current G7 leadership, to promote and speed up global decarbonisation. Based on this , 14 selected ongoing IKI projects and initiatives will receive additional financial resources.

Federal Minister for Economic Affairs and Climate Action Dr Robert Habeck: "The high world market prices for fossil energies as a result of the Russian war of aggression are having an impact not only in Germany and Europe, but also in developing and emerging countries, where they encounter significantly lower incomes. This is why it is more important than ever to drive forward the global energy transition with even greater commitment. Germany has committed itself to this within the framework of the Paris Climate Agreement. More investment in much cheaper wind and solar energy is crucial for this. To advance this, we are now increasing our funding under the International Climate Initiative."

The investment package is based on two pillars of global climate action: on one hand, the streamlined implementation of a global turnaround in energy policy towards a supply from renewable energies and higher energy savings. On the other hand, the streamlined mobilisation of investments in a sustainable and climate-friendly infrastructure. Both pillars strengthen the existing activities towards CO² reduction in central emerging economies to create the basis there for successful decarbonisation by the middle of the century.

Global turnaround in energy policy for CO² reduction and reliability of supply

The current ongoing war also sees Germany and the global community faced with tremendous challenges in terms of energy supply. Both the reliability of supply and the turnaround in energy policy must be ensured and promoted. With these additional funds, the BMWK wants to contribute to ensuring that the partner countries of the IKI can also set the stage for a successful turnaround in energy policy. With an increase of EUR 51 million in the fields of renewable energies, energy efficiency, cooling and green hydrogen, there are measures funded that make specific contributions towards this goal. The increases in the energy sector are distributed among developing andemerging countries in Asia and the MENA region as well as in Africa and Latin America.

Mobilising financial resources for sustainable infrastructure

The second part of the increase package promotes the mobilisation of further private and public funds as well as investments in renewable energies and the transport, industrial and building sectors. In recent years, the IKI has strongly expanded its portfolio in the financial sector with new projects and funds. Now, the additional total of EUR 75 million will serve to further mobilise large-scale investments and likewise  establish mechanisms for carbon pricing. Carbon markets are created when market-based climate change mitigation instruments take effect and carbon certificates are traded on a national, regional or global basis. Market-based climate change mitigation instruments levy charges on the emission of climate-damaging greenhouse gases and contribute to anchoring climate action more quickly in the relevant sectors.

Additional fundings of project in the area of energy

Topic block 1 - Renewable energies

Two further projects with a total funding amount of 55.75 million euros are in preparation. They will be dedicated to the ambitious expansion of renewable energies and efficient sector coupling in the MENA region and to Thai-German cooperation on energy, transport and climate protection. The project information will follow here.

 

Topic block 2 - Energy efficiency

Topic block 3 - Market ramp-up of green hydrogen

Additional funding in fund deposits with a focus on mobilising investments

Selected articles on the projects

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Energy transition in Indonesia - lessons learned from Germany and Australia

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