The IKEA and Rockefeller foundations have set up a $1 billion initiative aimed at fighting climate change and providing clean energy in developing economies, the foundations announced Monday.
The initiative, which seeks to reduce 1 billion tons of carbon emissions and provide clean energy to 1 billion people, is set to launch later this year, the foundations said in a statement Monday. The plan aims to avoid centralized sources of energy such as power plants and instead use “mini-grid” and “off-grid” solutions such as wind power, solar power, and hydropower.
“We need to be honest and recognize that the current approach is not delivering the impact the world needs in the time that we have,” said Per Heggenes, CEO of the IKEA Foundation, in the statement. “We need to replace polluting sources of energy with renewable ones, provide access to energy to communities and unlock further funding for sustainable models.”
The foundations hope their initial $1 billion investment will attract $10 billion of additional funds by the end of the year from international development agencies, the Financial Times reported. The initiative seeks to create renewable energy projects that are appealing targets for institutional investors, using philanthropic capital to develop the projects until they can deliver a return.
Find out how below ⤵️#EnergyEmpowers
— The Rockefeller Foundation (@RockefellerFdn) June 21, 2021
“This can be commercially viable. There’s $1 billion taking risk upfront, and that can unlock tens of billions of dollars,” Rockefeller Foundation president Rajiv Shah told the Financial Times.
Moreover, the foundations believe that the initiative could strengthen relationships between philanthropic organizations and government agencies, leading to future collaborations. (RELATED: Biden Admin Investing More Than $260 Million To Help Coal Country ‘Create Jobs And Revitalize Land’)
“Big, bold, and pioneering collaboration and investment is required not only for the short term, but also the long term, to galvanize a better future,” Shah said in the statement.
“Our partnership will unlock the financing and resources that are essential to provide clean, reliable electricity that improves the lives and livelihoods of people everywhere,” he continued.
The foundations are already working with a number of global development organizations, such as the International Finance Corporation and the U.S. International Development Finance Corporation (DFC), the Financial Times reports. The DFC offers loans and equity investments in low-income countries, and is an important tool advancing U.S. foreign policy interests, according to the Center for Strategic and International Studies.
The foundations hope to attract more interest, especially from European development agencies, as their initiative progresses, according to the Financial Times.
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