The Government of Norway has announced it will allocate NOK10bn ($1.1bn) for a new fund that will invest in renewable energy projects in developing countries over a period of five years.
A total of NOK2bn ($227m) will be provided to the climate investment fund each year.
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By GlobalDataPrime Minister Erna Solberg said: “The climate investment fund is an essential part of Norway’s contribution to achieving the goals set out in the Paris Agreement and the [United Nations’] Sustainable Development Goals (SDGs).”
“To succeed in reducing greenhouse gas emissions, particularly in Asia, we need to mobilise more commercial capital. I urge investors to work with the climate investment fund when it is up and running.”
The funding will be allocated through the national budget and the Norwegian Investment Fund for Developing Countries (Norfund), which will also be responsible for administering the fund.
The investment’s main aim is to reduce greenhouse gas emissions in developing countries.
The investments will be made in developing countries with high emissions from coal-fired power plants. They will be in line with national climate and energy plans in the fund’s beneficiary countries.
The fund can also mobilise almost NOK100bn ($11.3bn) in future investments in renewable projects.
International Development Minister Dag-Inge Ulstein said: “The establishment of the new climate investment fund is a milestone in Norwegian development aid.
“It is part of the solution to some of the major challenges we are facing and that are having a particularly severe impact on the world’s poor.
“We know that even if all countries spend 1% of their GNI on aid, it will still not be enough to solve global challenges such as climate change.
“The new fund is a win-win initiative that will support climate action and, at the same time, increase access to renewable energy in countries that are in need of sustainable energy solutions. “