At the same time that the pandemic highlighted the urgency of fulfilling the SDGs, mobilising public funds became vastly more difficult. However, the OPEC Fund is stepping in, financing projects that enhance access to clean energy and improve people’s lives
Energy, the life force for social and economic development, has always been at the heart of OPEC Fund’s work. From investing in renewable energy projects to supporting transmission infrastructure or trade of strategic commodities for increased access, we have focused on energy since our foundation in 1976, long before Sustainable Development Goal 7 was adopted as part of the 2030 Agenda. We launched our Energy for the Poor initiative in 2008, and have since been an integral part of United Nations efforts in the field, including the Sustainable Energy For All (SEforAll) coalition.
All around the world, governments and leaders are acknowledging the urgent need to address climate change and decarbonising economies. All of the OPEC Fund’s member countries are signatories of the Paris Agreement, and each are working to diversify their energy economies. Saudi Arabia launched two initiatives to collectively plant 50 billion trees as well as to propel the Middle East region towards achieving more than 10% of the global target to reduce carbon emissions. Additionally, the UAE is bidding to host the COP28.
SDG 7 promises “access to affordable, reliable, sustainable and modern energy for all”. The challenge today is to find the right balance: How can we meet people’s basic needs and improve access to energy and how can we do this sustainably? While some countries and economies that are lagging behind in energy access are working to find the right energy mix for themselves, others are boosting their efforts for an ambitious transition to renewable and clean energy.
The OPEC Fund has been at the forefront of advocating for access to affordable clean energy for many years and is participating in landmark projects that exemplify cooperation among governments, development finance institutions and private sector actors. Despite accelerated progress on some aspects of SDG 7, greater efforts are essential to scale up energy-related investments in developing economies.
We have committed around $3.3 billion to projects that enhance access to energy services. Our projects have generated 1.3GW electricity capacity and supported 18.8GW of total generation capacity. Currently, energy is our second-largest sector of investment in terms of government-led initiatives. We are also supporting many private sector-led projects, which play a vital role in achieving a clean and inclusive energy transition.
The targets linked to SDG 7 provide a clear road map on how to find that balance. The OPEC Fund continues to work with governments, partners, the international development finance community and the private sector on all five of the defined targets.
With public funds allocated to more urgent needs, such as the COVID-19 pandemic, public resources are scarcer than ever. Mobilising private capital for investments is not an easy task due to the perceived risks and challenges involved. However, the private sector can play a leading role to fill the funding gap. We, the development finance community, must support countries in their bid to increase renewable energy penetration, in line with SDG 7.
The COVID-19 pandemic has demonstrated that the SDGs are more relevant than ever, providing the vision and guidance for achieving resilient economies and inclusive societies. We have focused our initial efforts on immediate recovery, and have fully deployed our $1 billion COVID-19 response financing facility to help our partner countries sustain jobs, meet urgent healthcare needs, support SMEs and promote international trade. The time has come to collectively address the core underlying issues and ensure that we are better prepared to meet emerging challenges.